A Home Inspector’s Weblog by Frank Schulte-Ladbeck

exploring homes and the lives in them around Houston

Control and Caution with your finances

Once a week, I like to write something along the lines of financial advice for someone who has just moved into a home. A couple of things happened to me this week that pointed towards writing this post. I would firstly like to say that I am not adversely inclined towards banks, but I do have a bone to pick. I see too many people who do not understand how banks operate, and how there financial history and credit are developed and impact their lives. I think that you should use the full services of a bank, but on the side of credit offerings and service fees, I am disappointed.

I am a stock owner, and I do own stocks in some banks. I want to see profits, so the stock’s value increases. I also want to see that I get dividends. I am a small time investor, who wants good profits, but I do not particularly look for firms that are producing ever increasing profits. Most investors do look for this trend in profits, and they can cause stock prices to swing dramatically when the performance of a firm is not where they desire. Banks try to find ways to generate ever more profits, which led to the subprime lending fiasco. Now that this avenue of revenues has been closed, banks are looking towards other routes. Service fees provide a quick route in creating this revenue. With you having few rights when it comes to your credit lines, banks can change the rules at their whim to ensure that they will get a fee from you when you do not handle your account properly.

Here was a situation faced by one person last month. The holiday bills were in, and money was tight. He had funds in other accounts, and he did have an agreement that if he had overdraw his checking that the money should be taken from another account. He knew that his account would be close to no funds, and he told his wife not to use the debit card. She did though, but only to the tune of causing less than fifty dollars in overdrawing the account. The banks response was to charge them over two hundred dollars in service fees for these charges. Did they notify him by e-mail? No, it was done by mail. Did they take the funds from the other account that was to be used? No, the terms had changed, since he was using a credit account for overdraft protection. Even if he had, the new terms still would charge him a service fee for that protection.

I received a note today from my bank that my terms of service have changed yet again. Do I have any rights in this matter? No. If I cancel my card, I hurt my credit history, so what option do I have? I have to be familiar with the terms of service for my accounts to ensure that I do not do anything that would incur a new charge. Charges can pile up fast, so it is imperative that you take charge of your finances to prevent the banks from hitting you with a service charge. They will be looking to find ways in the coming year to increase their profits, and you are the means for them to make that happen.

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