The current financial crisis has exposed a number of faults in our system as the status quo was thrown out of the window and new rules had to be invented to cope with a the financial meltdown. The mortgages we thought were “innovative” turned out to be time bombs and our available credit card debt became an embarrassment instead of something we could use to buy all the toys we didn’t need. But there is one thing that has stood out like a sore thumb in these unusual times – your bank is not your friend.
Does anyone remember the days when we used to go down to the local bank branch to have a chat with the manager about getting a loan for one thing or another? How the bank employees used to greet you by your name and ask how the rest of the family was doing? Whatever happened to the concept of personal service? Now if you go to your local branch it is difficult to get to talk to the manager and instead you are passed on to a “Personal Banker”, a young trainee who has no power to take any decisions and who changes every three months as they get promoted. But there is one thing which has emerged out of this deep recession – the banks are not there to help you!
I have always thought that banks are non-productive entities. They do not manufacture anything so they don’t really have a tangible product except the thing they call “service”. What is this “service”? Well, they take your money and pay you a measly interest rate, and then only if you are a big customer. They then charge you fees for all sorts of services which you need to access your own money. They take your money and use that to make loans to other “qualified” customers and charge then anything from 5%-20% interest. Not a bad service, for the banks. But then they made sure the government didn’t come in and regulate what they were doing by “investing” these insane profits by bribing lawmakers with their lobbying efforts. So now over time the banks have created the license to systematically rob America.
Checking accounts that were originally “free” were suddenly being charged monthly service fees. To reduce their costs at the branch they encouraged you to go online. Then one day a $10 “online fee” appeared. If you want to use your money online to pay bills, that is possible – another $10 fee. Do you remember the days when ATM access to your money was free? That became a thing of the past some time ago as banks started with a $1 “processing fee”. This has gradually been increasing every year and now, if you go to an ATM of a competing bank, you are charged twice – once by that bank and again by your own bank! So now getting $20 instant cash will cost you a minimum of $3, which is 15% of the $20 withdrawal. All to access your own money.
But the biggest ripoff has occurred with late charges on your credit card and overdraft payments on your bank account. The bank’s misuse of credit card rules is rampant. They change their conditions on credit cards at will. You may have an interest rate of 9% today but they can, and do, change that at a moment’s notice. Because you missed your on time payment by one day, your rate will change from 9% to 29%, or more, overnight. In many cases, even if you pay on time, they will up your rate because the credit rating of the people in your zip code exceeds their own guidelines, which they adjust at will. They will also cut off your access to the old credit limit you had.
To cap it all, they introduced a couple of years ago, an extra charge to your bank account if it ever goes negative. This is the biggest scandal of them all. Years ago I tried to get an overdraft amount on my bank account but was refused many times, even though my credit rating was decent. Then one day I saw a $39 fee appear on my bank statement. On my inquiry at the bank they explained that this was an “overdraft charge”. I explained that I don’t have any overdraft facility on my account. They explained, “but now you do.” I tried to have this “overdraft facility” removed but the bank said this was not possible. I now know why. The banking industry rakes in $38 billion every year in these fees. This is $38 billion they are sucking out of the US economy and lining the pockets of their management with huge bonuses at the cost of the average consumer who is now struggling to survive anyway.
So how can you take back the power (and your own money) from the banks? Apply for a debit card from a non-bank entity and get your income deposited on that account instead of the bank. This will also wean you off the credit card disease. Learn how to live from the money you have and not the debt you can incur. These days you can pay for everything with a debit card. Did you know that paying at the gas station with a debit card is like paying cash and is 5 – 14 cents cheaper per gallon than paying with a credit card? There are also no overdraft fees. If you don’t have the money on the account it will just decline the purchase. This will avoid you being charged an overdraft fee of $30 – $50 for a $1.75 cup of coffee at Starbucks!
The banks will continue to suck money out of consumers until consumers say, “enough is enough”. Go back and calculate how much the banks have charged you in fees for this past year, including increased credit card interest and fees. This they have charged you for the privilege of keeping your money in their own vaults. It is time to understand that the banks no longer have the attitude of helping the community. Their sole purpose is to milk it for every dime they can get. It is no wonder that consumers are now asking the question; why did the government use the taxpayers’ money to bail out these crooks?