20 Money-saving Secrets That Banks Withhold From You

Banks use a variety of devious tactics to extract as much money as they can from you, whether you are saving or spending it. See the next 20 things to be aware of.

You aren’t paying enough money for your bank account

In return for a monthly fee, certain bank accounts come with several extra benefits, such as complimentary travel insurance. But the account is probably not worth the money you’re paying unless you take advantage of EVERY extra that is offered.

They make money when you swipe

The retailer usually charges a processing fee when you make purchases with your debit or credit card. The majority of that fee is returned to your bank, so even though you are using your own funds, the bank benefits nonetheless.

Being debt-free is not a good thing

A bank will review your financial history to determine whether to extend your credit. If you have never taken an ouIft card, for example, lenders are unsure of your creditworthiness. Thus, a less-than-perfect past might not be worse than any history.

They can reorder your items

You may go over your overdraft limit if certain banks rearrange your purchases within a day, going from the largest to the lowest amount. You will incur additional fees if you choose to do so and your bank assesses a fee for each transaction you make while you are overdrawn.

Running deposits last

Let’s say you deposit money into your account the day before several payments are scheduled to be made. Banks might process those payments first, putting you in arrears and requiring you to pay overdraft fees, and then process your deposit, which will put you back in the black.

They could keep your cheque sitting there

The process of your cheque clearing into your bank account can take several days, and banks have the right to stall it for a variety of reasons, all under the pretense of making sure everything is in order. You risk going into the red and incurring additional overdraft fees as a result of this delay.

That insurance is not necessary

The bank will frequently try to upsell your insurance to cover your payments if something unfortunate happens when you take out a credit card. If you can’t, the fine print in these insurance policies might indicate that it won’t really pay off the entire debt. Planning something else is a better idea.

It will cost you more money to pay off your debt early

You would think that paying off your debt earlier would be advantageous when it comes to loans and mortgages. However, a lot of lenders will charge you extra for doing so.

It could be detrimental to close an unused credit card

When evaluating your application for additional loans, banks take into account your “credit utilization” rate. They want to know how much of the available credit you are utilizing. A high one could make you appear desperate. Your chances may be harmed if you close an old card because that rate may rise.

Not every time will you receive the quoted rate

It is not always necessary for lenders to provide all successful applicants with the advertised rate. They might only have to provide that rate to a specific proportion of those who have been accepted, offering a more costly arrangement to the remaining individuals.

Even though rates aren’t going up, your mortgage payment might

In actuality, some variable mortgages are unrelated to the rate set by the central bank. In other words, even if the bank rate hasn’t changed, your lender may raise rates.

Be mindful of mortgage costs

Banks profit greatly from the various costs associated with mortgages, such as “administration” fees and exit fees, regardless of the interest rate. To ensure you are aware of any potential additional costs, make sure you read the fine print.

No such thing as free banking exists

Your account isn’t truly free even if there isn’t a monthly fee. We all pay for our accounts, whether directly or indirectly, whether it’s through overdraft fees or the imaginary interest paid on your credit balance.

Banks profit from your indolence

The best offers are reserved for brand-new clients. Banks profit from your unwillingness to frequently compare rates and open new accounts, which means you lose out on the best offers.

Your most valuable asset may be an old debt

The longer your credit history, the better, as lenders look for proof of your debt management expertise. Accordingly, it might not be a good idea to close your oldest credit card.

You might have to pay money for it

If you take out cash from an ATM that is not operated by your bank, you may be charged a fee in certain countries.

It could cost you a fortune to use your card overseas

If you use your card abroad, a lot of banks will slap you with a ton of fees and charges. It’s usually preferable to adjust your spending budget well in advance.

Savings rates aren’t here to stay

Banks have a reputation for luring customers in with attractive savings rates up front, then drastically cutting them off later. Make careful to monitor the precise return you are receiving. Move if it falls.

Don’t exchange your trip funds at the bank!

Banks sometimes provide some of the worst exchange rates, so be careful when allocating your vacation funds. Use a specialized currency exchange company instead.

They desire for you to err

Interest-free credit cards aren’t something that banks kindly offer. They are placing a wager that you will struggle to make your repayments and find yourself with outstanding debt when the 0% offer expires. Thus, take care not to make mistakes!