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November 12, 2007
 Never doubt whose side the banks are on... its not your's.
Their commercials and advertisements are honed to a razors edge. They cut with the skill and precision of a surgeon with a scalpel to reach inside the average person and make them believe that being in debt is normal, that you "deserve" a credit card, a new car, and a house with a mortgage you'll never be able to manage. Or how a second mortgage will let you live your dreams.
If you've been through any tough financial times, then you know how fast the smiling faces and friendly voices that you see in the commercials, or in person when making a loan, are replaced by constant, auto-dialed harassing phone calls, letters, and less-than-nice people. Make the mistake of giving them your checking account information to allow them to make an electronic payment and you may find that they use that information later to help themselves to another payment when you're behind again: no matter to them what your circumstances are, or that the little money you had in your checking account was to buy gas, food, or even medicine for your family.
But what if you've managed to whittle away your debt or maybe you don't any debt to speak of. What bad things can a bank do to you then? If you don't have much money and really time your checks and debit card purchases to match your deposits (called living paycheck to paycheck in the real world), they have a trick or two up their sleeve to screw you and put more money in their pockets. I just read in the October 26, 2007 edition of USA Today (it was laying around an this article just caught my eye), that, according to a 2006 USA today survey, 8 of the 10 largest banks paid checks from the largest to the smallest amount instead of the order they were received. What does this do? This makes people with low balances bounce more checks and bounce them faster. Why do they do this? Because by forcing more bounced checks they can charge more overdraft fees.
This same article also confirms that banks have sped up the processing of checks but have not done so with deposits, which again, translates into more bounced checks. What's more, if you use a debit card, the article says that they no longer block a transaction if you don't have enough money in your account, instead they'll approve the transaction and then hit you with an overdraft charge.
Those overdraft charges now are yielding record amounts for banks: $17.5 billion. Yes, you read that correctly: $17.5 billion a year.
One more method to get your money into their pockets: credit cards are constantly shortening their grace periods. 30 day grace periods used to be the norm, now, 20 day grace periods are common. You may not even receive your statement before the grace period is over, much less allowing time to mail in a payment.
Like an evil clown in a horror movie, the smiling faces and friendly people in bank and credit card commercials and advertisements are only facades covering the evil lurking within. If you've never experienced hard financial times, then you've missed the dark side of banking, but if you've gotten in over your head in debt then you know full well what I'm talking about.
Avoid debt like you would a deadly virus. Start working your way out if you're in debt. Sign up for my mailing list using the red outlined form below (I'm pointing to it, just look for my picture) and I'll give you, yes give you, my online course that shows you step by step how to start an Internet business.
Until next time,
Fred
About the Author
Fred Black is an experienced programmer, web site developer, online business operator, systems integrator, father, husband, musician, and songwriter. Visit his Internet Business Blog at: http://www.pqInternet.com.
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Posted by Fred on November 12, 2007 | Printer-Friendly
TrackBack: http://www.pqInternet.com/Blog/mt-tb.cgi/94
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Truth and Freedom
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Comments:
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Hear! Hear! Banks - the epitome of the rip-off culture.
I once had two incomimg bank wires. Both sender bank and receiver bank assured me that funds would be in my account by date "x". So, stupid me, I took them at their word and withdrew some on date "x+1" with a debit card. The amount I withdrew was more than one but less than two of the deposits.
You can guess what happened. My account was not credited until two, three days later. Now, you would think they would decline the withdrawal since the deposits were not yet received/processed, as that would have put me into DEBIT on a DEBIT card. But no, they allowed the withdrawal and then hit me with a penalty.
When I complained, their response was, "Well you should have checked your balance, first." (Meaning, you can't trust us not to take any excuse to rip you off, can you?)
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That is pretty shocking to actually read even though I know banks are in it for themselves (after all it is a business) but the part about them cashing the biggest checks first to make more bounce is disgusting. Enlightening read
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I agree with you 100% Fred.
I was in debt back before I started my online business...and it was a nightmare what they do to you. I'll even add another aspect. When I was trying to "consolidate" debts all those non-profit companies refused to help because I didn't earn enough. I eventually found out those "non-profit" companies who claim to help you with your debts get their income from the banks themselves (since they help them collect on money they're not getting).
My advice...look at and treat debt like a disease. It's not normal to be in debt. If you can't pay for something with cash, you don't need it (the exception being a house because you're pay the same for your rent). Even on the house, I paid off the mortgage as fast as possible as well.
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Such non profit companies never help. All they do is make money via banks in your name. I never thought that is was so deep... It was truely shocking.
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From Fred...
