Banks are still on the hunt for prey
Many major banks have been making the news more recently; this is due to their bad gambling predictions regarding mortgages and their overall poor mismanagement. It would be a very bad generalization and inaccurate to blame all banks for their wrongdoing. The larger banks have been predators preying on innocent consumers for a very long time, while constantly advertising that they care about their consumers. Banks are typically vague about mentioning anything that might harm their reputation as financial institutions.
Four things that your bank neglects to tell you about.
#1. Debt Cancellation Services
While debt cancellation is not regulated as credit insurance, this product is extremely overpriced, but it usually serves the same exact purpose of insurance. When you are unemployed, debt cancellation will pay off your balance. This product is sold and advertised as a “point of sale”. This kind of insurance is risky, and debt cancellation should be cheap for people.
#2. Fees per Month
Banks have made it easier to identify the types of consumers they want by how much they charge for their monthly fees. Many people live essentially paycheck to paycheck, and can barely afford transaction fees, ATM fees, and minimum balances out of pocket to a traditional bank. Some banks have lower fee structures for services are out there.
#3. Overdraft Fee Protection/Lines of Credit
Do not be so quick to fall for the double talk that banks use very frequently about overdraft fee protection. You have to read your contract thoroughly. The larger banks are becoming more liberal in regards to their check payments, authorization of debit transactions, and overdraft policies. The larger banks do this so you don’t have enough to cover the expenses in your account.
Banks are practically robbing customers and they profit from it. Customers get higher overdraft fees, illegally authorized, and banks offer a line of credit to finance those overdrafts. This is a very clever strategy created by many financial institutions across the country. Customers are stuck with high interest rates ranging from 16% to 29%. You have to monitor your account balances because the bank is not going to monitor it for you.
#4. Teller Fees
Almost all banks have this philosophy; if you do not have a minimum of five figures in your bank account, you are useless to them. Banks have created this type of fee structure for the consumers that they want. If you must use a teller, don’t pay to do so. Banks don’t care – some will charge as much as $ 3.00 per transaction or more for teller services.
You must read all of the brochures your bank has given to you about their services. You have to be aware of overdraft fees, fees per check, fees per teller transaction, and requirements for minimum balances. Many consumers do not take the time to read all of the fine print in their contract, but you do not want to be charged ridiculous fees or be sucked by the bank to take out a loan you did not have take out at all. The customer is (or should be) always right and you are their customer. The banks are supposed to serve you, not the other way around.
The alternative of credit unions
If you want to avoid all of these fees completely, you have to go to a financial institution that is more about the customers and not about profiting from the customers. Credit unions are a great solution. Credit unions have lower fees and better rates than banks. Credit unions were designed to focus on the customer aspect of banking and not on the profitability aspect that many banks obsess over today. Generally, credit unions have similar financial services to banks.
The majority of Americans can qualify to become a member of a credit union and, depending on the union, the membership is free. The minimum deposit required by credit unions is small, some up to about $ 25.00, but it is definitely worth it. Many Americans have not heard or seen anything about credit unions and that is why many of them are not aware of what they offer. Credit unions don’t need to advertise or profit from media exposure as banks do.
