Do banks have your best interest in mind?

Only if your making your interest payments. The sole purpose of the retail banking industry is to take your money from you. This purpose has caused the failures of some banks. They became greedy and over extended themselves with creative bookkeeping. Other banks such as Wachovia, Wells Fargo, US Bank and Bank of America have been more subtle with their approach to taking your money.

The marketing will always say just how much these banks care about you and your finances. I have personally witnessed many horrendous acts of the banks stealing from their customers in the name of convenience. All kinds of people such as the elderly and single mothers working very hard just to survive have had excessive overdraft fees applied to their account. This is the bread and butter of the retail banking industry.

What is excessive? How about the fees incurred when the available balance goes below zero, then when the actual balance goes below zero these fees are applied again. The banks hope you will not notice and if you do they may refund a portion of those fees.

The fees are applied per transaction, for instance if you went below zero by $10.00 but it was $2.00 at a time you could be charges upwards of $175.00 and that could equal $350.00 with the double overdraft fee accounting system in place. If you complain the banker will do you a favor by refunding half the fees because after it was your fault for over drafting your account. So that $2.00 cup of coffee actually cost you $2.00 plus $35.00 for the privilege of banking with you friendly retail bank.

Bonuses are paid to bank managers for retaining fees. The skill required to work as a branch manager is to be able to look someone in the eye and tell them, “Your money is now our money.” Bonus money paid from excessive fees. The banks are raking in our dollars by the bucket loads. This is a main reason why a retail bank can boast a profit while the rest of the economy is falling apart.

If you complain about these excessive fees, well you could apply for overdraft protection. It sounds like extortion to me. Overdraft protection is a line of credit that charges 21-29% interest for your balance. The fee for the transfer can run anywhere from $2.00-$10.00 depending on the bank. That is the selling point. The transfer is always an excessive amount. If you overdraft $50.00, well you will get $100.00-$200.00 advance. If you keep a balance on your overdraft line of credit for one year then you will have paid the bank $23.00 at the minimum. This is the protection offered from banks to protect you from their creative bookkeeping.

The creative ways in which the deposits are credited against the debits generally favor the likelihood that you will be charged an overdraft fee. The ways the debits and credits are applied are not uniform across the board. If you are in a “Metro” market the debits are removed before the deposits are credited. However a “community” market will credit the deposit before applying debits. It’s nice to know that these banks are looking out for our best interest.