Bank Like a Banker

The business of banking has changed dramatically over the last decade. Because the cost of doing business the old-fashioned way is no longer effective, banks are interested in changing their customers' behavior by encouraging electronic banking alternatives whenever possible. They have done this by charging high fees for services that were once free. If you pay $200 or more in annual fees for banking, it's time to do some competitive shopping.

Before becoming furious with your bank, it may be that the products you're using no longer meet your personal needs. If you have an established relationship with your bank, inquire about the other types of lower-cost checking and savings account products.

Understanding the rationale of why a bank charges fees for different services will allow you to be a savvy banking customer. If human contact is required to serve you, such as a teller or personal banker, this is very expensive for the bank. The incentive is for banks to encourage more high-tech, "low-touch" methods of meeting your needs. This is accomplished by servicing as many customers as possible with automated telephone services, cash machines and online self-service banking.

Since the bank needs to train their employees, provide a paycheck and benefits, pay for the branch building and in some cases supply uniforms, etc., it is conceivable that your one banking transaction per pay period could cost the bank $3 or more.

If you conduct your banking via an automated telephone system, the cost of this type of transaction is much less expensive. However, if you then require assistance from a telephone banker, the price goes from $1 for the automated process to as much as $2 for human contact. For the same reasons stated above, the training, location, computer equipment, etc. becomes more expensive when human interaction is needed.

Now it is clear why electronic banking methods are preferred by financial institutions. In fact, most banks are rewarding their customers with lower fees the more the customer does his/her banking electronically.

For example, even though Automatic Teller Machines (ATMs) cost the bank around $100,000 each plus the cost of the computer network and maintenance, the cost of these types of transactions drops to between $.50 to $1 each. Not only are these machines more cost effective, the 24-hour availability to customers is very convenient. With the ease and convenience of automatic clearing house (ACH) payments, this "checkless" process drops the price to around $0.25 each.

And finally, the Internet drops the expense even further to less than $0.10 a transaction. I realize that there is still some fear of banking electronically, but the security that banks have instilled with computer technology far surpasses the current security of traditional banking methods. If you lose your checkbook and wallet, the cost and worry of canceling these checks is very tedious. It's very possible that a thief could forge your name and deplete your accounts in a matter of hours.

The sophisticated computer technology, however, although not perfect, has a far more secure system to protect you and your money. Avoid being the bank's best customer. Attempt to cut your annual bank fees in half by educating yourself. Inquire about the options and products available to you with your banker. By asking about the alternative banking methods, you may find that your bank fees will drop considerably.

ABOUT ONE PAYCHECK AT A TIME, INC.

One Paycheck at a Time Inc. is the leading source for sensible debt reduction solutions. Its products include the One Paycheck at a Time paperback (ISBN: 1591133327), as well as an ebook format, and the eTools program. The author of the book and president of the company, Kimberly A. Griffiths, has been through the vicious cycle of debt herself and has made it her personal goal to share her experience to help others. More information can be found about the company and its products at http://www.OnePaycheckataTime.com

More Resources

Unable to open RSS Feed $XMLfilename with error HTTP ERROR: 404, exiting

More Debt Relief Information:

Related Articles


The Debt Free Lifestyle
Many people have been taught that you cannot get ahead without debt. We are also inundated with advertising telling us we can have anything we want.
Why You Should Get Out of Debt Today?
The main reason for getting out of debt today, is because people with little or not debt have more control over their future:1. They have more discretionary income, meaning that you won't be living pay check after pay check as you probably are right now.
Debt Elimination Is The Key to Financial Freedom
If you want financial freedom, the first thing that you will need to do is to get rid of your debts. After all, as long as you owe money, you can't consider yourself to be financially free.
Reduce Your Debt With These 5 Tips
It's never pleasant to realize that you're in financial hot water, but pretending the situation doesn't exist is NEVER the way to deal with the problem. If you're having trouble meeting monthly payments, find yourself borrowing or using credit cards to meet daily expenses, or have one or more of your credit accounts turned over to a collection agency, it's time for you to get proactive and bring your debts back under control.
Debt Management Systems
What is a debt management system, and when do you need it? Like any kind of management system, debt help systems can be good or bad. We will take a look at what you can do to manage your debt better.
Mandatory Credit Counseling for Those Considering Bankruptcy
Most Americans are aware of the sweeping changes in U.S.
A Debt Elimination Process Must Be Initiated From You.
The first and maybe most important step in a debt elimination process, is to acknowledge there's a problem and realize that something has to be done with your situation. Some do it before it is too late, though an asthonishing number of people seem to act as if this is not their situation at all.
Five Hot Tips To Get Out Of Debt Forever
The financial and psychological burden of being in debt causes us and our families continuous emotional stress. That stress eats away at the quality of our lives and leaves us feeling powerless, angry, depressed and helpless.
How to Become Debt Free
In today's consumer society it is all too easy to get into debt. If you have a few credit cards, car loan, mortgage and possibly student loans it can easily add up.
Debt Reduction, a Necessary Endeavour
Massive debt is something many Americans face. Debt reduction is now becoming more and more of a necessity.
Benefits and Drawbacks of Bankruptcy
Outlined below are some of the benefits and drawbacks of bankruptcy. It should be noted that bankruptcy is not to be entered into without first having sought professional advice.
Debt Elimination 1
If you have multiple debts, you may well be wishing you had a debt elimination wand to wave and make all the debts disappear. You would probably wish even harder for that magic wand if you were falling behind with, or at least struggling hard to keep up with, the monthly payments on those debts.
Stop Debt Collectors
Can you stop debt collectors ? . .
Worried About Debts?
Having trouble paying your bills? Getting dunning notices from creditors? Are your accounts being turned over to debt collectors? Are you worried about losing your home or your car?You're not alone. Many people face a financial crisis some time in their lives.
Personal Bankruptcy - If Its Unavoidable, File Now
The Bankruptcy Abuse and Consumer Protection Act, signed into law by President Bush last April, promises changes to Federal bankruptcy law that have been long sought by the lending industry. The bill promises sweeping changes to Federal law, and will make it much harder for the average consumer in financial trouble to have their debts wiped out by filing for bankruptcy.
The 7 Secrets to Getting-and Staying-Out of Debt
As vice president of the American Credit Foundation, a nonprofit organization that helps individuals and families manage their debt, Mike Peterson knows firsthand how financial problems can wreak havoc in one's life. Each day, counselors at the Midvale, Utah-based foundation help desperate clients dig themselves out from under piles of unpaid bills, stern notices from collection agencies and ominous foreclosure threats.
A History of Money and Banking Secrets That Banks Dont Want Published
A History of Money and TradeTo start with a history of money and debt, we must go back many years ago when people used to trade their wares for the things they wanted and needed.In place of money or Federal Reserve Notes, you could trade a well made pistol for a cow, which you could eat or trade a remainder of for other items like clothing.
What is Bankruptcy?
Here is a useful guide to bankruptcy. It should be noted that bankruptcy is not to be entered into without first having sought professional advice.
Bankruptcy - The New Scarlet Letter
Nathaniel Hawthorne's book The Scarlet Letter states in Chapter 2, "On the breast of her gown, in fine red cloth, surrounded with an elaborate embroidery and fantastic flourishes of gold thread, appeared the letter A." The letter A stood for the word adulterer and represented one of the worst insults in society.
Should You Invest In Savings Or Payoff Your Debts?
I have faced this financial question 8 years ago and recently I have friends asked me this same question. I think I should write it up so that it may help some of you that having the same situation.