Why Do Banks(BOA) send Checks Monthly?

[DI]

If banks stop sending unsolicited checks and other mailers it would save them money.  The money saved can go back to its cardholders by reducing the interest rates.  BOA haven't missed a month, since reopening my account, sending me checks.  Just my opinion. 

Message Edited by DI on 11-21-2009 02:26 PM

[Anonymous]

Banks don't have members (except those like USAA).  They have shareholders.  They don't pass savings onto customers, they pass it on to shareholders.  The only reason a bank reduces rates is to stay competitive or to become more competitive (promos).  This is the distinguishing factor between not-for-profit CU's and private/public banks....not-for-profit pass along to "members" in the form of better rates of return and better rates for loans.  The for-profit pass it along as shareholder dividends, executive and employee bonuses and as profit to the corporation for capitalization and expansion.

They send the checks as a form of advertisement and solicitation.  It is built into their ad budget. 

One thing I don't want to imply is that I am demonizing the for-profit companies.  Where would all the IRA/401k, investments, etc. go if not into for-profit businesses?

I just wanted to distinguish the difference.

[Anonymous]

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DI wrote:
If banks stop sending unsolicited checks and other mailers it would save them money.  The money saved can go back to its members by reducing the interest rates.  BOA haven't missed a month, since reopening my account, sending me checks.  Just my opinion. 

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Yeah, they do that with just about everybody and certainly do it if you have any kind of open BT offer. It's all figured into their profit equation and the fees generated by the use of those checks more than foots the bill. You might be able to get them to stop sending checks to you if you called and asked. Then again you would have to call BofA and ask them for something which might be dangerous!

[DI]

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@Anonymous wrote:

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DI wrote:
If banks stop sending unsolicited checks and other mailers it would save them money.  The money saved can go back to its members by reducing the interest rates.  BOA haven't missed a month, since reopening my account, sending me checks.  Just my opinion. 

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Yeah, they do that with just about everybody and certainly do it if you have any kind of open BT offer. It's all figured into their profit equation and the fees generated by the use of those checks more than foots the bill. You might be able to get them to stop sending checks to you if you called and asked. Then again you would have to call BofA and ask them for something which might be dangerous!

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LOL. I think I may endure some type of AA  if I call BOA to interrupt its marketing plan.  

[Anonymous]

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DI wrote:
If banks stop sending unsolicited checks and other mailers it would save them money.  The money saved can go back to its members by reducing the interest rates.  BOA haven't missed a month, since reopening my account, sending me checks.  Just my opinion. 

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It's very simple, actually. Because it pays off. The profits gained far outweigh any losses. Billions of dollars are spent, yearly, on market research & marketing/advertising. They know what influences customers, when, and how. That kind of money isn't spent because it doesn't work. BoA doesn't eat the cost of printing, check paper or postage, repeatedly, because it doesn't work. Plenty of people have, and plenty more WILL use those check, or buy whatever it is that BoA is selling.

I've been getting those monthly checks and other offers every month for a year now. I've not bitten yet. But, I'm just one customer out of... how many? And, from the bank's perpspective, statistically, I'm far more likely to (eventually) use their products than I am to keep declining. So are you.

BoA is a for profit business. They're just hedging their bets to drum up business. We're just the outliers. For the most part, what they're doing works.

[wmarat]

BOA charges 4% BT fee. One BT of $1000, covers approximately 30-40 letters.

[Duke-of-Earl]

Call and tell them they are exposing you to identity theft and fraud by letting those things lie in your mailbox.  Say you want them to stop sending any unsolicited offers of credit.  I think they are required to honor this kind of request, but not sure.  Worked for me, anyway.

[Anonymous]

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@wmarat wrote:
BOA charges 4% BT fee. One BT of $1000, covers approximately 30-40 letters.

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Discover charges 5%

Discover keeps sending checks and offers for a 1.99% BT, but it has the 5% fee....no thanks!

[CHARGE_IT]

I know our government has raised the bar by no longer seeing fit to spend in the "billions" and moving on to the great fun of spending "trillions". (and they criticized the big banks)

However, in fairness I have to point out a huge exaggeration; no bank is spending "billions" yearly in ad/marketing/customer research.

I think this is the result of our situation. We are beginning to think in inflated terms and we should resist that. Lets please not become accustomed to our government throwing around "trillions". It is not right or necessary. Keep focused.

CI

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@Anonymous wrote:

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@DI wrote:
If banks stop sending unsolicited checks and other mailers it would save them money.  The money saved can go back to its members by reducing the interest rates.  BOA haven't missed a month, since reopening my account, sending me checks.  Just my opinion. 

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It's very simple, actually. Because it pays off. The profits gained far outweigh any losses. Billions of dollars are spent, yearly, on market research & marketing/advertising. They know what influences customers, when, and how. That kind of money isn't spent because it doesn't work. BoA doesn't eat the cost of printing, check paper or postage, repeatedly, because it doesn't work. Plenty of people have, and plenty more WILL use those check, or buy whatever it is that BoA is selling.

I've been getting those monthly checks and other offers every month for a year now. I've not bitten yet. But, I'm just one customer out of... how many? And, from the bank's perpspective, statistically, I'm far more likely to (eventually) use their products than I am to keep declining. So are you.

BoA is a for profit business. They're just hedging their bets to drum up business. We're just the outliers. For the most part, what they're doing works.

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[Anonymous]

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@Anonymous wrote:

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@wmarat wrote:
BOA charges 4% BT fee. One BT of $1000, covers approximately 30-40 letters.

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Discover charges 5%

Discover keeps sending checks and offers for a 1.99% BT, but it has the 5% fee....no thanks!

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The Discover BT offers are a joke at 5%. My Citi offers (I have have three currently) are all at 3%. BT fees are a major factor in evaluating BT offers. That along with the length of the BT. Knowing those things you can pretty much figure out how much the money is really costing you. If the BT fee is not zero or the APR is not zero the money isn't free.