Capital One recently announced they’re getting rid of overdraft fees! Banks made billions in 2020 on these fees alone – this new change could save Capital One customers hundreds each year.
Why, after all this time, did they make this change?
Overdraft fees are those expensive charges you receive every time a transaction comes out of an overdrawn account. These fees punish customers for not having enough money!
Removing these fees seems like it’ll cost Capital One a lot of money, so why would it do this? Is it because it cares about its customers?
Not exactly. Unbanked people – people who don’t have a checking account or credit card – cite high fees as a major reason they don’t use banks. This new change will bring in tons of customers for Capital One – making them the real winner!
Other banks, who still charge overdraft fees, might argue the company is in for a huge economic loss.
This is true – Capital One is anticipating an annual $150 million loss, but it’ll make more in the long run. The move makes it seem consumer-friendly, and more people and their money will flock to bank there.
Eliminating fees is great for customers, and offers the opportunity to experience more financial security. But we shouldn’t imagine they’re doing it for us – like every corporation, profit comes first!