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While banks provide valuable services, they are ultimately profit-seeking entities with priorities beyond customer care. Behind thetellers’ smiles, banks employ various tactics aimed at benefiting their bottom line. From hidden fees to selling your data, some practices happen without the customer’s knowledge or true consent. Here are 15 insider secrets your bank would probably prefer you didn’t uncover.
Using the Float
Banks benefit from “the float” – holding onto your money for a period before transactions clear. This provides banks with interest-free short-term funding.
Lobbying Against Regulations
Banks spend millions lobbying politicians to influence financial regulations in their favor, sometimes at the expense of protecting consumers.
Hidden Fees Everywhere
Many banks charge fees for services you might assume are free, like account maintenance, paper statements, or even teller interactions. Always read the fine print.
Low-Interest Rates on Savings
The interest rate on your savings account is often much lower than the rate of inflation, meaning your money loses value over time.
High-Interest Rates on Loans
While they give minimal interest on your savings, they charge significantly higher rates on loans and credit cards.
Some banks offer promotional interest rates that look appealing but jump significantly after the promotional period ends.
While it sounds helpful, this service often comes with hefty fees each time it’s used.
Some banks reorder your transactions from highest to lowest, not chronologically, to increase the chances of an overdraft.
Selling Your Data
Many banks sell your spending data to third parties, often without your explicit consent.
Foreign Transaction Fees
Using your card abroad can come with hidden fees, even if the transaction is in your home currency.
Banks often charge you for using an ATM outside of their network, and the ATM owner might charge you too.
Minimum Balance Fees
If your account drops below a certain amount, even for a day, you might be hit with a fee.
Credit Card Late Fees
Even if you’re late by a few minutes, some banks will charge a hefty late fee.
Mandatory Arbitration Clauses
Many banks include clauses in their contracts that prevent you from suing them in the event of a dispute.
Even after you close an account, some banks can reopen them without your knowledge, usually due to a subsequent transaction.
Pushing Unnecessary Products
Bankers often work on commission and might push services or products you don’t need.
Lack of Transparency in Investment Products
The bank’s investment options might have hidden fees or be subpar, but they’ll promote them because they get a commission.
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Michelle Harler is the founder of Guide2Free, a website dedicated to finding and sharing freebies, product testing opportunities, and other ways to save money. With over a decade of experience in the industry, her expertise in finding quality offers makes Guide2Free an invaluable resource for anyone looking to try new products and save money.