Surprising Secrets Your Banker Wishes You Knew
If your banker could talk, what would they say? Of course your banker can, in all likelihood, talk. But what we mean is really talk — divulge secrets about the financial industry that could be valuable to you as a consumer. We all keep some secrets when it comes to money. Whether it has to do with hiding purchases from our families or hiding salaries from our co-workers, people tend to clam up when it comes to money.
That’s because the world of finance is rife with sensitive information. And it’s not all about balances and security measures. The entire industry is rather secretive in the way it operates. Why, you ask? If more people found out what was really going on behind the scenes — even if you didn’t count the endless scandals — banks would face serious backlash.
The point is there are secrets — or at least unacknowledged truths — that banks don’t want to get into. It might have to do with the fact that they screw things up or nickel and dime you at every turn. It might be that their company engages in sketchy and embarrassing behavior in an effort to boost profits. Or it might just be as simple as that you, as a small customer, are completely unimportant to them.
So if your banker could talk, what would they tell you? The following things would probably be on the docket.
‘Our fees are much higher than other banks’
- In 2016, the three biggest banks made $6.4 billion in ATM fees.
Banks make an insane amount of money from fees. They’ll hit you with a fee for pretty much anything these days — foreign transactions, having a debit card, or even accessing your own money through one of their machines. But you can make some noise if you’re unhappy. For example, in 2011 Bank of America announced a new fee for having a debit card but dropped the plan after customer backlash. You’re probably always going to get stuck paying fees in some form, but shop around to minimize the damage.
Next: On the topic of shopping around, that’s something else your banker would rather not get into.
‘Our competitors will refund fees’
- More and more banks are refunding fees these days.
If you are paying fees and aren’t having any success getting your bank to refund them, it might be time to move on. One thing bankers don’t want to tell you is many of their competitors will refund those fees. They’re betting you won’t go through the hassle of switching banks. If you’re really serious about dodging fees, look into credit unions. A recent survey found 84% of them don’t have any fees for a checking account.
Next: Why go to the bank when you don’t have to?
‘You don’t need to come into the bank anymore’
- Online banks attracted 12% of all new accounts in 2016.
If you’re old school, you probably like going to the bank to make deposits or withdraw money. It might be an opportunity to get out of the house or office, or perhaps you just really like free Dum-Dums. Either way, it’s an outdated model. You don’t need to go into a bank anymore, and bankers know it. But getting you in allows a teller to give you a quick sales pitch.
You can sign up for online banks, which are gaining popularity, or simply work through an app or website. This will save you time and allow you to dodge marauding sales people. There are numerous choices out there.
Next: Another secret? You could probably get a better rate at a competitor.
‘Our interest rates are way overpriced’
- As of August 2017, the average checking account accrues 0.04% APY.
This is another area in which your bank is banking on your propensity for laziness. If you need financing or a loan, you’ll probably start with your bank. And it’ll probably hit you with high-interest fees, assuming it can get away with that. There’s no way your bank will tell you a competitor or credit union can get you a better deal. You’ll have to go figure it out on your own. Remember that the next time you need a mortgage, car loan, or credit card.
Next: Perhaps most importantly, you’ll want to remember whose team the bankers are on. Hint: It’s not yours.
‘We’re acting in our best interest, not yours’
- Since 2008, the biggest banks have paid $321 billion in fines.
This, right here, is the crux of this entire article. The one thing a banker will never say to you is they are looking out for themselves, not you. Banks, after all, are out to make money (with some exceptions). They aren’t there to help you, necessarily, but instead to extract as much revenue from you as they can. Sometimes, they go out of their way to screw you over and pad their own stats. And why wouldn’t they, when there’s often little consequence?
Next: If you’re hoping for privacy, most banks won’t oblige.
‘We can and will sell your personal information’
- Your user profile — data collected about you — can sell for as little as $0.005.
If you’re not aware by now, here’s the ugly truth: Companies sell your information. This is the foundation of Google and Facebook’s business model, and it’s quite lucrative. Although there are some protections for consumers, be aware that someone is bidding for your information. And when it gets sold, you’re going to be targeted for advertisements. Unfortunately, there isn’t much you can do about it without going full hermit.
Next: Finally, it’s your biggest fear realized: getting ripped off.
‘We can and will sell you products you don’t need’
- In 2010, right after the financial crisis, only 18% of Americans trusted their banks.
People are wary of auto mechanics because they feel they might get ripped off or sold services or products they don’t need, and they wouldn’t really know. The same is true in the financial world. People are becoming more wary of bankers and financial advisers for the same exact reason. The reason is, as you might have guessed, to push up revenues. That’s one more thing to be aware of. And it all comes back to the fact that your bank is looking out for itself, not you.