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Banks want you to overspend and stay in debt, as
banks make more money from people who are in debt. If you have banks
loans though mortgages, personal loans, credit cards, etc, that
total $250,000 then you are a better customer for that bank than a
person with $30,000 cash in their account. If you are prone to
checks bouncing often and don't pay your credit card bill off in
full every month, then you are an even more valued customer.
A bank is always thinking of their bottom line,
not yours. If you get a call from your banker, then the chances are
they are trying to sell you a new product, possibly something like
insurance. You are already a customer and they are just trying to
get as much money out of you as they can. In some cases the products
or services they are trying to sell you are good value, but you
should ask yourself do you need this product? And is it offered at
the best value?
Interest Rates
When banks offer you great interest rates they are looking to
attract new customers. It is usual practice for banks to subtlety
reduce those rates or not increase them when interest rates go up.
The banks cannot afford to give these high-flying rates to all their
customers.
Checks
Bouncing checks are good for banks' business. The banks earn good
money every time a check is bounced.
Credit Cards
You can have your credit card set up by an automatic payment. This
is a good way to make sure your credit card is paid off every month.
Banks will not actively encourage customers to set this up for their
credit cards. It makes sense as they earn a lot of interest on your
credit card if you don't pay it off each month. If you do have an
automatic payment set-up make sure there are enough funds in your
account to cover it.
Banking Advice
Advice from banks is often in self-interest. The banking advisors
will receive points for bonuses, they will get more points for
variable mortgages than for a fixed-rate mortgage. They also get
points for when people open accounts and take personal loans. A lot
of the advice they offer will have their best interest at heart and
not yours.
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