Yes, occasionally our banks do some bonehead lending or waste a bunch of money expanding into markets they didn’t take the time to figure out. But the money they make off the fees and interest they charge us are astounding. And you know what? You’re contributing in no small way to that profitability with your penchant for using credit and your apathy towards fees.
First up are all the idiots who pay ATM fees. I’ve looked through bank statements showing a $20 withdrawal holding hands with a $3 fee. Lord love a duck! That’s a 15% fee. Iffin you’re usin’ an ATM like a wallet, what’s wrong with you? That’s money you could be saving that’s doing nothing for you other than feeding your Lazy Habit.
Then there are the dopes that think living in overdraft is a good idea. Heavens to Betsy! I put this down to ignorance because I can’t believe a person with even half a brain thinks it’s okay to always have their bank account in a negative position. It’s not just the monthly fee (if you even have a plan, ‘cos I’ve seen some folks paying $5 a day for every day they’re in overdraft), there’s the interest charge too. No, that’s not 1.75% a year… that’s a MONTH, which translates into 21% a year.
Overdraft was never meant as a cash flow supplement. It was always meant for emergencies. If you are always in overdraft it’s because you haven’t made friends with a budget. Do it.
I’ve saved my fave for last. A special shout out to the people who have to trick themselves into saving by using one of those “round up” accounts that transfers a little money after every debit card transaction to a tied-in savings account paying a pathetic return. Do you know you could double your interest if you just shopped around for a better savings account? But because so many people have been convinced that there’s some mystery involved in finding the money to save, these products have become increasingly popular.
Only a total money moron thinks being tricked into savings is better than planning to save. And then when all those debits have bled dollars a day into savings (oh, see it works!) and the auto debit for a car payment or other pre-authorized payment bounces to high heaven because there isn’t enough money in the account, it takes all the money “saved” and then some to cover the extra fees. Well done!