Do banks make a profit from debit card transactions?

GingerFurball_2

dlk wrote: »

A bank won't close your account just because it's unprofitable. They will however potentially close it if it goes dormant for a long period of time. Dormancy isn't a month or two, you're usually talking about at least 2 years of no credits to the account at all.

Try 15 years.

agrinnall

GingerFurball wrote: »

Try 15 years.

Yes, this is what Barclays say (my bolding).

"We participate in the Unclaimed Assets scheme established under the Dormant Bank and Building Society Accounts Act 2008. The purpose of the scheme is to enable money in dormant accounts (ie balances in accounts that have been inactive or dormant for 15 years or more) to be distributed for the benefit of the community while protecting the rights of customers to reclaim their money."

deadendwaterfall

I know this is old, however I was wondering if this would cause a bank to close your account, paying money in over a year but only withdrawing money of very small amount every four or five weeks on the grounds of misusing a current account as a savings account?

Westie983

deadendwaterfall wrote: »

I know this is old, however I was wondering if this would cause a bank to close your account, paying money in over a year but only withdrawing money of very small amount every four or five weeks on the grounds of misusing a current account as a savings account?

The short answer is no...

Westie983

jonesMUFCforever

Banks make a lot of money lending overnight your account balances and paying you a pittance in return.
So the higher the balance you have the more money they make out of you , never mind their cut of visa transactions.

jonnygee2

Do banks make a profit from debit card transactions?

Yes, they earn a small fee.

I've just opened an account with Tesco and I know banks have a habit of closing ones that cost them money/don't make them money.

I don't think they do. Just having a normal bank account . More than anything, most banks probably don't even have the tracking that would allow them to calculate which accounts are profit / loss making if it's just day-day activity.

There was a thread not long ago about an account being suddenly closed.

There are lots of reasons this can happen. Most often it's probably suspected financial crime or attempts at first party fraud (falsely claiming debit card fraud etc). Most of the time when a bank closes an account it ends up becoming a complaint which then goes to the FCA, the whole process is expensive and they wouldn't do it without reason.

Of course, by their own account everyone who has posted about their account being closed here has been completely innocent of any financial crime or wrongdoing. I guess some people just get bad luck? ;-)

Zanderman

jonnygee2 wrote: »

Yes, they earn a small fee.

Jonnygee, you're answering a question that was asked 2 years ago.

The thread was resurrected in the last day or so by someone asking another question, but I doubt there's a need to answer the original one anymore.

Thrugelmir

jonesMUFCforever wrote: »

Banks make a lot of money lending overnight your account balances and paying you a pittance in return.

Lending overnight to who ?

jonesMUFCforever

Thrugelmir wrote: »

Lending overnight to who ?

The Bank of England and other banks.

Some banks have a daily surplus of cash others might be a bit short so they lend to each other.

Thrugelmir

jonesMUFCforever wrote: »

The Bank of England and other banks.

Some banks have a daily surplus of cash others might be a bit short so they lend to other.

At base rate hardly profitable lending on an overnight basis. Cheaper probably not to service the account at all. Provide debit cards, cheque books and mail out statements etc.