Customer Bank Fees: Mint.com Takes on Wells Fargo

From what I understand, that is how banks/CUs make most of their money. I find it hard to believe that FI fees will ever completely go away.

I am kind of with Peltz, I dont see CUs or Banks giving up fee income but I would liek to see a shift to more retail products and services. Instead of slipping in the fees “behind my back” make me want to give you some money for some really cool services.

Tony,

I think that’s a fantastic response. I’d like to see what kind of products/services banks & CUs come up with that would make me want to pay for it. But you know, they’ve already started rewards programs that track your spending and reward you with gift cards at those types of establishments. However, as cool as that program is to me, it costs money (not much, though), and I’ve not signed up for that.

Just because I’ve decided not to pay for it doesn’t mean that many, many other customers haven’t enrolled in the program. I think programs like this are a really good start to moving away from fee-based revenue.

I actually bank with Wells Fargo, and I decided to look a little more into the rewards program they’ve offered me time and time again in the drive-thru, and I wasn’t impressed at all.

The program is only $12/yr, but I only get 1 point for ever $4 that I spend with my check card. The lowest value rewards you can get start at 650 points, and they’re generally $5 gift cards to places like Panera, Applebees, etc. I’m sorry, but having to spend $2600 (+$12 annual fee) to get $5 in rewards is not a program that’s worth my money.

I hope that FIs work to implement better programs that might actually be worth spending money on, because this one isn’t cutting it.

The unfortunate part is that so few banks or credit unions want to wage the risk of innovating new products and services.

Any successful business (and credit unions and banks are businesses) have an R&D budget where they invest part of their money to try new things.

Credit union leagues might want to facilitate a “bond” type program to develop new products, systems or services so there is mitigated financial liability for the CUs but a collective benefit in the advancement of the services CUs provide. That could create incredible ROIs for the participating credit unions and really springboard the industry into new and exciting areas.

Just a thought.

My question to you Lisa is how long have you been with Wells Fargo and just now look into the ‘rewards’? My point is, that most customers, don’t care to look either bc they aren’t being marketed properly by the FI or just don’t care. Did you look into the rewards program because you are not working the industry and if you weren’t, do you think you ever would?

Brad,

I’ve banked with Wells Fargo since Fall 2003 (started college). They’ve been marketing the rewards program to me for over a year or so at least. Maybe 1 in 3 trips to the drive-thru I get approached about it. I was somewhat interested in the program before when the teller was telling me about it because I personally spend way too much money – I thought, “hey, why not be rewarded for this stuff?” But then I heard there was an annual fee, and I decided against it.

I actually didn’t do research into the program until I made my comment to this article. I think I would have eventually looked into the program on a whim because it’s never a bad idea to look for rewards when you spend money, but this program was just not worth it at all.

Fees, whether you agree with them or not, will always be charged by banks and credit unions. The issue then becomes why are the fees being charged, who benefits from the fees, and are they reasonable in relation to the services rendered. (I sound like Oliver Stone in JFK :)

I work at a credit union and we charge fees. We, as well as other credit unions, charge fees that by in large cover the cost of doing business vs. fees to drive income and profits.

Some fees (that we charge) are preventative but most are to cover the cost of doing business. Take for example a member that consistently places stop payments on personal checks to avoid paying bills. If there is not a preventative cost, the member will continue to abuse stop payments and the time required to complete and process the requests cyclically continues. The cost for time spent by the employees processing the request and the costs incurred by placing the stop on the core system and with applicable vendors continues as well. For members that are using stop payments responsibly, the fee is often waived or cut in half. How many banks do you know that do this?

A giant corporation such as Wells Fargo exists to make money, nothing more nothing less. Customer service is the means to an end. If you believe that you are truly money and fee savvy I challenge you to look into joining a credit union. We exist to serve our members and the large majority of fees that we charge goes back to the credit union not the Wells Fargo elite and share holders.

I’ve been a Wells Fargo customer for about 4 years, and last month was the first time I noticed a piece of marketing promoting reward programs. Maybe I just blocked out previous marketing? I ended up tearing up that particular piece of marketing literature because the details seemed obfuscated and I had to do some quick algebra in my head to figure out how much I would have to spend to get $50 in rewards. Because it wasn’t clear and straight forward, I felt like it was a shady deal.