Following the financial markets meltdown, banks are under increasing pressure to act more responsibly whilst rebuilding confidence in the financial systems and rebuilding their financial strength.
However, with many of the apparently easier ways to make money now gone, banks are resorting to ever more clever ways of earning fees.
Savings rates (linked to Reserve Rates) are at record lows. Real savings rates are negative, as inflation runs at much higher rates. Careful savers are being penalised by seeing the purchasing power of their money reduced over time.
Banks respond by using term savings products that encourage savers to fix savings into one, two or up to five year terms, meaning that they lose ready access to their money and have to take a risk on where future money cost rates will go.
Banks have increased both the frequency and amount of fees being charged. Now it is common place to have administration fees for services that were once free. Application fees, for example, are also being charged for loans or mortgages.
Obtaining a credit card has also become much harder. Even the number of balance transfers deals that were once common have reduced. But for the customer with a good credit history, this can be an excellent way of reducing the very high charges levied by banks on debt balances.