Wednesday Wow: Banking in 2022

Giving any bank my money is what I’m not gonna do! No way Hosea. I have learned so much over the last two years and the heavily bailed-out banking system will not profit from me in 2022! I have a few strategies to ensure this from happening

So let’s just start at the beginning, Banks make money, using your money- I bank at Suntrust. Have been so for over a decade. Now, to be honest, I have had enough NSF’s for anybody over the years. It kinda just happen. Kids, gas, food, unstable income- life…… it just happens. But I always pay it back timely. COVID came along just when I was stalling my income, and my banking life went into mild turbulence. Yep, I got a couple of NSF hits but to my defense, it was the banks’ fault as I began checking my morning emails, that posted my most recent balance. before spending each day. Yet I would get fined. Talk about upset! I could not believe it! How in the world do they do make it make sense? So I called them and after hours of conversing, it’s refunded. Now fast forward almost two years later. This began around Thanksgiving. My financial life is coasting along pretty well before this. I have funds deposited inside online banks as well as inside brick and mortar institutions. In this revelation, PayPal was the activator. I purchased a vacation package for my doula practice and it overdraft in my Suntrust account. I pulled the money from my Paypal account but it went to my CashApp instead of my Suntrust account.

They couldn’t reverse it. Cashapp couldn’t forward it and Suntrust call volume was so high I timed out 6 times on five different days. Needless to say the fees added up because nothing made sense to me. The time I did speak to a Suntrust agent, she gave me the run around. I asked for an escalation and she said that I would be placed on hold again…….. “I kid you not”. Mind you, I’m still homeschooling, working, keeping up my home, dealing with my sister’s transition, and trying to keep up with my loved ones.

Thanks to Paypal and others, along with a plethora of back and forth, I was left holding the bill for $360 in NSF fees. It was paid and will be written off on my taxes, but going forward, none of these accounts will benefit from my account. I will not leave more than $20 in any of them. What I have learned is banks make money with fees.

Fees

Checking account fees make up a large portion of the bank’s income, bringing in $6 million in 2015 just from ATM and overdraft fees. If you’re smart with your money, you may never have to pay one of these fees, but some may be unavoidable. Fees associated with checking accounts include:

  • Application fees. Whenever you apply for a loan, most banks require an application fee. Additionally, banks can include this fee in your loan’s principal and you’ll have to pay interest on it.
  • Lost or stolen card fees. If you need a new debit card, a new one will have to be mailed to you at your expense.
  • ATM fees. In certain situations, such as being on vacation in an unfamiliar place, you may not be able to find an ATM owned by your bank. Using a different one will cost you a small fee, both from your bank and the bank who owns the ATM.
  • Account fees. While free checking accounts are still more common, some banks may charge a “maintenance” fee just for owning a checking account.
  • Overdraft fees. A credit card payment late by even two minutes can land you with an overdraft penalty. It happens to everyone, but doing it often can be very costly. The average charge for having your account balance in the negative is $35 a day, but may be higher depending on your bank.
  • Paper statement fees. If you opt to have your billing statements mailed to you instead of checking them online, you can expect to pay a small fee for this service.
  • Inactivity fees. Banks can charge you if you haven’t made any deposits or withdrawals on your account for an extended period of time.
  • Late loan payment fees. If you miss a payment on your loan, you’ll usually have to pay anywhere from $10-$100 depending on your bank’s policy.
  • Loan prepayment fees. Paying off a loan early is not always a good thing, especially for your bank. It causes them to lose money in interest, so they will often charge you a fee to make up for it. The higher the interest rate on your loan, the higher this penalty will be.

When you take these factors into account, your free checking account is not actually “free.” Recent spikes in interest rates and the introduction of more fees may seem unfair to the bank’s loyal customers. However, banks are the safest place to store your money, and the peace of mind this brings is well worth the price of a few small charges. The way I figure it, if I don’t use these features. they won’t be getting my coins. I will not use them for loans. I don’t use my ATM card. I have a paperless account. There is no activity fee…So there’s that!…. I think I’ll get them in the end.

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