We all know that banks are not on our side. They offer us products and services to make our lives more convenient and pull us through financial jams, but we end up paying for them through interest charges…and bank fees…and late payment fees…and overdraft charges…and NSF check fees…the list goes on.
Banks have no shame in trying to squeeze as many cents and dollars from their clients. Financial institutions have many games and tactics, but their only power over you is your ignorance to them. Here are 6 tips that banks will never outright tell you but that will keep your hard earned cash in your pocket.
Some credit card companies will send bills out late in the billing cycle, reducing the amount of time you have to actually pay the thing — sometimes with only a couple days. They’re legally required to send your bill at least 14 days before payment is due, but with mail eating up to three days each way, you have an eight day window to send in your payment. Online banking can shave three days off that time. But remember that sometimes your payment won’t go through the same day depending on which bank you’re using, so it’s just best to pay up the day you get the statement or set up automatic checking account withdrawals. But be careful if you choose that option, always make sure you have enough cash in the account. But, making only minimum payments is gonna cost you dearly in interest fees, so it’s best to just discipline yourself to pay right away.
2. Accidental Overdraft
You can ask your bank to monitor your checking account so that if you happen to overdraw your account, they’ll call you right away. Number one, you stop spending – and number two, you can request that they give you until the end of the day to replenish your account and avoid the $15-$25 overdraft penalty and the inconvenience of a bounced check.
3. Loan Insurance – Just Say No
Additional life or disability insurance on a loan only protects the bank in the event you die or cannot work anymore and can’t make your payments. You’re paying their premiums for them, plus they’re getting a commission on the insurance policy that originates from an insurance company. Bad, bad, bad. Life and disability insurance is fine, just get it from an insurance agency yourself and make sure the policy benefits YOU.
4. You Can Have Loan Fees Waived
Your mortgage loan or home equity loan is a great source of revenue for the bank. To save you from going elsewhere, the bank can stand to relieve you of a few hundred dollars worth of fees to keep your business – but you have to ask.
5. Interest Rates are Always Negotiable
“The rate for this type of loan is X%.” Wrong! There is always room for negotiation, and don’t be fooled by the banker’s tactics of not mentioning the rate at all and just filling it in on the note, or suggesting that because you need the money immediately you should take X% and you’ll negotiate it later.
6. Low Interest Credit Cards Could Cost You More
There are two common ways banks make up for the lower rate: annual fees and no grace period. If you’re paying $35-$50 for the privilege of a few percentage points less, that’s still a type of interest – a lot of interest if you don’t normally carry a balance anyway. And if the conditions of the lower rate involves no grace period, you will pay interest even if you pay faithfully in-full each month.