How the Mega Banks are Taking Advantage of Consumers
If you’re ready to take control of your financial future, you must first look at who you’re choosing to do business with. As we move further and further into the 21st century, everyday consumers have more options that ever before to ensure that their financial choices align with their values. If you value your community and the businesses that make your town a great place to live, then why send your money to a company with no connection to that community? Or, perhaps even more pressing, why place all of your money in a large, national or global bank that’s dead set on charging ever increasing fees to turn greater and greater profits?
You have a choice, and there’s no better time than the present to break free and explore the alternatives. But first, let’s take a look at how big banks have gone too far, and why it’s time to take a stand and choose something better.
How Big Banks Create Big Profits
Opening a checking or savings account with a larger bank can initially feel like a safe bet. You’re going with a trusted name, you can find ATMS all over the country—seems like a win, right? But when you take a look at how big banks profit off of their fees from small consumer accounts, you may think twice before trusting them with your hard earned assets.
In 2016 alone, reports indicate that the top 3 big banks made $6.4 billion in fees from ATMs, overdraft charges, and “maintenance fees” to keep an account open—and that amount is fully $300 million more than these banks made in 2015. The rise in total customer fees collected makes sense, since many big banks have continued to raise the cost of using an ATM, especially an ATM from an out of network bank.
But consumers actually have a fair amount of choice when it comes to avoiding predatory big banks keen on turning a profit from fees. In 2012, a national survey by the U.S. Public Interest Research Group (USPIRG) found that 6 out of 10 small banking institutions offered free checking, as compared to only 25% of big corporate banks. In addition, the report notes that “small banks had lower average checking account fees, overdraft fees and foreign or off-us ATM fees, as well as lower balance requirements to avoid checking fees, than big banks.”
So, why don’t more Americans do businesses with smaller banking institutions who actually cost less to deal with? Part of the issue may be the difficulty in accessing this information. While big banks certainly lead the charge in fees assessed, they also tend to be better and clearly communicating their fee schedule online, or in materials distributed at the bank. For smaller institutions, it can be a bit harder to know up front what you’re getting into, especially if you start with a quick look at an underutilized website—the USPIRG survey found that less than a third of small banks post their fee schedules online.
Looking to find information on the fees and offerings from your local banks? Start browsing Bundlefi today to get the information you need to avoid playing into the big bank business model and stop paying an average of close to $100 per year in bank fees.
Save, Borrow, and Invest in Your Community
Throwing out money on banking fees is just one part of the big bank problem. As has been reported in numerous outlets, Americans are experiencing a savings crisis, in which fewer than 40% of Americans have access to $1,000 in savings. But given the current rates available at big banks, why should consumers bother to save? After all, despite interest rate increases from the Federal Reserve in 2017, consumers at big banks did not see a boost in the rate they earn on their savings accounts, especially at big banks. As one article reports, “for larger banks, [interest rates are] often especially low. The standard annual percentage yield on a Bank of America regular savings account is now 0.01%...Chase’s regular savings account pays 0.01%.”
When you bank at a smaller institution, you not only tend to enjoy slighter higher rates on your savings accounts, but you also get the peace of mind of knowing that your investment helps support local businesses and initiatives right in your community. And if the time comes for you to take out a loan and start an investment of your own? Smaller, local institutions are often more willing to take a holistic look at the lender and can offer more flexible terms to borrowers who have a history with the community and the institution.
Today’s consumers have the information and the tools they need to take control of their finances—and Bundlefi is ready to empower consumers to make a change. Contact us today, or start exploring local institutions to see why it pays to keep your money close to home!