Banks make money from fees. In 2015, banks made $34.6 billion from fees. That equals about $107 per American. Credit card fees are part of banks’ profits too. Paying your balance in full monthly reduces these profits. About 80.5 million Americans use paid preparers for electronic tax returns. Banks also profit from interest and service fees. Good money management reduces these bank profits.
Ways Banks Profit
- Interest
- Fees for bank accounts and transactions
- Overdraft charges
- Credit card interest and fees
Monitoring your account balance avoids overdraft fees. Online banks can reduce or eliminate some fees since they have lower costs without physical branches. Carefully choosing a bank and account helps avoid paying unnecessary bank fees and profits.