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Time to Divorce Your Bank?

Steps You Can Take To Help Beat Your Bank at Its Own Game

By William J. Lynott

Is it time for you to divorce your bank? Has the relationship been strained by your bank’s ingenuity in creating hidden fees designed to bolster its bottom line at your expense? Were you troubled by the most recent attempt by some banks to impose new and oppressive debit-card fees?

If so, you may be thinking that it’s time for you to change banks. The public’s furious reaction to the new debit-card fees may have caused some banks to reconsider that ill-advised move, but it’s unlikely that those same banks will abandon their crafty attempts to separate you from your money.

The problem is that changing banks these days is no walk-in-the-park, especially for those of us who do our banking and bill paying online. The thought of learning a new system and reentering all that payee information is enough to put a damper on the whole idea. The task is compounded further for consumers who have automatic deposits to their accounts such as pensions or Social Security payments, or automatic deductions for such things as utility bills.

And don’t think that the banks aren’t well aware of the quandary facing customers who want to make a change. Despite increasing dissatisfaction with the banking industry, only a small percentage of customers switch banks each year. Perhaps because of the nagging thought that the whole process may simply be jumping from the frying pan into the fire.

If you’ve come to the conclusion that the devil you know is better than the devil you don’t know, here are a few steps you can take to help beat your bank at its own game:

 Monitor your bank statement closely

Monthly bank statements may not make for exciting reading, but they could make for profitable reading. You need to make sure that you’re not being hit with incorrect charges, especially in this age of new and often “hidden” charges. It will only take a few minutes to examine each entry on your monthly statement.

 Don’t opt out of paper statements

You’ve probably noticed those inviting suggestions from your bank that you opt-out of receiving paper statements each month. It’s a great idea for the bank because it saves them time and money, but it may not be a good idea for you.

It’s much easier to spot irregularities when you examine your paper statement each month than it would be on a web page. Failing to carefully examine paper statements each month is one of the most common and potentially costly banking mistakes.

 Ditch that ATM card

Make no mistake, the banks sold the ATM idea as a “convenience” for customers, but the whole purpose was to boost profits. By getting you to bypass the teller’s cage, the industry is saving billions of dollars.

If you’re paying anything at all for using an ATM card, stop using it. Simply resume that old-fashioned practice of stepping inside the bank to transact your business.

Is this an unthinkable step backwards? Not at all. Dumping your ATM card can be a liberating experience. Once you arrange your schedule to visit your bank only during banking hours, you’ve won the battle. With the extended banking hours offered by most banks these days, the whole process is a non-event. In fact, you may find that the line waiting to use the ATM machine is often longer than the line inside the bank. And, of course, using an ATM, especially at night, greatly increases the chances of you being assaulted or robbed.

 Never allow a CD to roll over automatically

Don’t think that your bank will give you the best available rate when you allow a CD to roll over automatically. It almost surely won’t. You should always call or visit the bank and ask to review all current interest rates for CDs, including any promotional rates that might be available. Banks often run special promotions offering interest rates higher than their regular rates. They are often not advertised and you can be dead certain that an automatic renewal won’t get that rate unless you ask.

It is likely that your bank will do a dependable job of sending you a reminder when each CD approaches its maturity date. The notice will dutifully explain that you don’t have to do anything at maturity if you don’t want to. If the bank doesn’t hear from you, they’ll just roll it over. That is, they’ll renew it for the same period as the original and pay you their current interest rate.

That sounds fair enough, so millions of today’s busy consumers take that easy road. The banks love people like that, but those people are making a mistake that you should avoid.

 Always shop around for the best interest rate if you need a loan

When you need a loan, it’s only natural to look first to your own bank, but you shouldn’t stop there. The banking industry has become very competitive in these difficult times. The result is a wide variance in such things as interest rates on loans. There are many places, especially online, that offer attractive deals whether you are saving or borrowing.

Your bank may not be the scoundrel that current events would portray, but it’s not your kind old uncle, either. That’s why it’s best to keep a sharp eye peeled for these or any other shenanigans if you decide to stick with it. HBM

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