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Secrets that Banks Keep From Customers

A recent report by a personal finance Website discloses banking secrets that many financial institutions would prefer customers not know.

The investigation by Go Banking Rates examined the relationship between consumers and banks and provided advice to banking customers on how to protect their money. They make clear that a bank is a business whose main goal is make money so the duty falls on customers to protect their financial assets.

Right of Setoff or Banker’s Lien

The biggest tip the report gives is a bank’s “right of setoff,” also referred to as a banker’s lien. This lien grants a bank the right to access funds in a deposit account automatically and without notice if a customer defaults on a loan from the same bank. These accounts can include an auto loan, personal loan or mortgage loan.

Negotiate Credit Card Rates

Credit card rates vary greatly between creditors. Some offer introductory rates as low as 0% APR while others exceed 20%. Many credit card companies offer incentives such as rewards programs, frequent flyer miles or cash back.

If you’re faced with two competing credit card offers such as one with a low interest rate and one that offers rewards points with a slightly higher interest rate, contact the card company with the rewards program.

When speaking to their representative it’s importanf to be courteous. Explain that you’re on the fence about applying for their credit card because you received a better offer from their competitor at a far lower interest rate. The service rep will likely tout the rewards program, but stay firm and focused on lowering the credit card rate.

It’s likely that you’ll eventually be offered a lower rate such as an initial 19.99% APR offer being dropped to 12.99% APR.

Bank Fees are Negotiable

Bank fees are just as negotiable as credit card rates. Many times a bounced check or overdraft fee can be eliminated. Call your bank immediately to contest the charge but don’t deny your mistake. Instead, plea your case to have the charge reversed by noting your loyalty to the bank.

Describe your years of devoted business with the bank. Itemize all your accounts (i.e. checking and savings account, car loans, mortgage loan, etc.) that you’ve kept with the institution and highlight your good record with the bank.

Debit vs Credit Card Liability

Credit cards and debit cards have differing liabilities associated with them. Visa, MasterCard, Discover and other credit cards limit liability from fraudulent activity while debit card offer less protection.

With credit card fraud, the maximum liability under federal law is $50, according to the Federal Trade Commission. And in most circumstances, like with a Visa transaction, there’s zero liability on unauthorized charges.

With fraudulent debit card activity timing determines maximum out-of-pocket liability. Ultimate liability depends on each unique situation but a lost debit card reported within two business days usually limits liability to $50. But reporting a lost or stolen debit card, or contesting fraudulent charges beyond two days, may hold a customer liable for up to $500.

Financial Advice from Tellers

While bank tellers are the first point of contact with a bank, banks don’t want you to know that many of them don’t have a financial background of any kind. If you need financial advice, seek an expert at the bank or elsewhere.

2 Responses

  1. mah5j_mtsu_s13 says:

    This is very valuable information; especially with the way banks are taking advantages of consumers now. I think what most people don’t realize about banks is that many fees are negotiable and refundable as well. The best way, in my opinion, to fight the unfair things that happen within the bank is to pay close attention to your account, so that when something does happen, you can immediately bring it to someone’s attention. Often times, you can call customer service or chat with someone online that can resolve the issue you’re facing.
    I bank with Bank of America, which I don’t think has a very good reputation, but I’ve been with them a while, and it’s a pain to change banks. What I’ve begun doing is anytime I see a bank fee of any sort, I contest it. For example, my card is supposed to have overdraft protection on it, but sometimes it fails. One day, I used my card for 3 or 4 little purchases that caused me to overdraft. When I checked my account I had 4 different $35 overdraft fees. I immediately contacted someone that not only removed the fees, but also changed my overdraft protection plan to something more efficient. Dealing with the bank is a hassle, but it is worth it to save your money.

  2. Steve L says:

    Creditors can also do it with a court order after suing you in court for an unpaid debt. If the ruling goes against you, a judge may order a judgment against you and give you about 30 days to satisfy the debt or start a payment plan. If a lender or creditor doesn’t get the money, they can return to court to have a judge execute the judgment. The judge can then order a bank account lien.

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