These days, it seems like the banks themselves are the world’s biggest bank robbers. Don’t let ’em stick you with unfair banking fees
With all these clever new banking fees that keep popping up nowadays, it almost seems more profitable to hide your money in your mattress. This is a sad state of affairs, not least because it completely goes against the entire concept of banking your money with a financial institution.
Most people just see banks as safe places to put your money, which they generally are. But as originally constituted, modern banks were supposed to make money by investing your money and keeping the lion’s share of the resulting interest, not by sticking you with fees.
Any fees they charged were supposed to be either convenience fees (e.g., for letting you hold one of their credit cards) or punitive fees to pay for things like returned checks, which cost them money. That seems reasonable, right?
Banks have started charging and overcharging for even the most basic services, for two primary reasons: new laws that prohibit them from imposing fees in sneaky ways, like for overdrafts; and because they can’t make enough money through investing.
Plus, despite all the billions in bailouts, they’re still paying for all those bad loans they made in years past.
None of this is your fault, but they’re making you pay anyway. Rather than cut shareholder dividends, they’re gutting customer service and teller staffs, raising existing fees, and instituting fees for things they used to do for free.
Some banks lure you in with promises of free checking accounts, but all it takes to renege on that promise is a letter from them in the mail, and too bad for you: suddenly, you have to pay a “maintenance fee.” Some banks have extended this practice to their free savings account as well.
That $5-15 a month may seem minimal, but it wipes out the interest earned in all but the largest accounts. This makes the mattress method of saving look better and better.
Even banks that still offer so-called free accounts often charge an “inactivity fee” if you don’t use your account enough, a tactic that the credit card industry has already gotten slammed for by the government. Needless to say, this can really hurt your savings efforts.
What You Can Do About It
There are a few options available to you if your bank is trying to bleed you with fees, and they all waste your valuable time. But unless you want to stuff your mattress with dollars, you’ll have to hie yourself downtown and wait in line to talk to a customer service drone.
Sadly, we’ve run out of space for now… so join us in Part II to learn your options for avoiding killer banking fees.