What the hell happened to consumer banking?!

March 17, 2014 8:03pm
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Fair warning: This is probably going to be a long post … because I’ve been fuming about this topic all weekend…  😡

So as I mentioned last week on Twitter, the wife and I are currently going through our finances in preparation for the baby who’s scheduled to be joining us in just under 46 days from now, and for the first part of it last week I thought that we were doing pretty good.

We finally consolidated checking and savings accounts after 7 years of marriage.

We even got some info on college funds for the little guy.

I think the problems started, however, when I actually thought that maybe we could catch a break and refinance a few things to make paying down some of our debts a bit easier…

Chase was the first one to cause me grief because after 6 years of on-time payments, I had the audacity to ask for a lower interest rate. Apparently some time long, long, LONG ago … so long ago, in fact, that chase doesn’t even have record of why they did it! … I missed a payment or went over my limit or something, and so Chase took it upon themselves to jack my APR up to the penalty rate of 24.14%.

Ok, fair enough. Them’s the rules … but seriously, it’s been a long time since that … whatever it was … and I kind of thought that after being such a long-standing customer (nearly 10 years), maybe they’d cut me some slack and at least reduce me back down to the APR that they offer to random Joes off the street – 14.14%.

Nope.

Hahaha!

What are you, nuts?! How do you think this works???

Two different reps – a regular one and a supervisor – both informed me that due to a rule that Chase made in 2009, the company no longer reduces APRs for anything increased prior to 2009. Sour grapes, anyone?

So I was pretty pissed about that because I’ve had this card for a long time and people always love it when they see my card design and the rewards are useful because we pretty much live at Disney World anyways, but ok. Fuck them. I did send an e-mail to the CEO of Chase Friday night as one final plea before I close out my account, but I don’t really expect much to happen – the guy got a raise up to $20 million this year, even after participating in the decimation that was the housing crisis not so long ago, so chances are he doesn’t really give a shit about me paying him an extra $1,000 in interest each year when he literally makes that in the first 8 minutes of his workday.

😕

Next up, we shift back to Wells Fargo who we’ve currently elected to do pretty much all of our banking with, and as a part of that transition, we opened up a new joint credit card to replace one of Sara’s that will be going away.

Well, today those cards came in the mail … along with the final terms, because they can’t tell you the APR in branch anymore, just how much MONEY they’re going to give you!!!

…at an interest rate of 21.15% a year…

And therein lies my frustrations because as I look at all of these APRs that have been bestowed upon me over the last several years, I can’t help but notice that I feel like I’m in a hole, and instead of loosening the flow just enough to give me a chance to pull myself out, these banks are there at the top just piling on more and more dirt as each month passes.

It’s funny how recently I got a rejection notice for credit from one of them because my revolving lines of credit have balances that are too high, and yet do you think that any of them will consider actually dropping my APRs just a smidge to give me a chance to actually pay some of them off?!

I think it’s a real telling sign on both the new Wells Fargo credit card listed above, as well as the credit line that we used to get our living room furniture around Christmastime, that they’ll give you all the credit you want, but you can forget about the interest rate being anywhere near what one would refer to as “reasonable.”

And no, I don’t consider anything over 20% to be reasonable.

Because the thing is, I used to be able to get a credit card at less than 10%, and 18% was considered a shitty APR. I also used to be able to put money in a savings account and actually have it earn interest. A real number, even – like 5-10% … none of this bullshit today where my brand new savings account with Wells Fargo earns me a whopping 0.01% in interest per year.

To put that in perspective, if I give my bank $10,000 to hold onto for an entire year, next March they’ll have a cool $1 bill waiting for me in interest… 😯

It’s to the point where Sara and I decided that we’re not even going to open a savings account for our kid when he’s born. He’ll have a college fund that a portion of his birthday money, etc… will go into, and the rest can go in the piggy bank that sits on his dresser … because how am I supposed to teach the kid about the interest-side of savings when if he puts $10 from Grandma in his savings account, at the end of the year his deposit has earned him exactly a tenth of a penny???

Aside from not having direct access to go blow it as easily, you’re literally better off “saving” your nest egg in the cushions of your couch because at least there you’ve got the random chance of finding an extra dime or quarter that might’ve fallen out of somebody else’s pockets!

I guess my problem is that when it comes down to it, maybe I don’t really understand how banks work today. My understanding from growing up was that people and businesses give the banks their money as deposits and they get a little back as interest for letting them use their money, and in return the banks then lend that money out to other people for a higher interest rate so that they’ve got something leftover for themselves when they’re done paying their depositors.

Well, something must’ve changed because it sure seems as far as I can tell that the banks don’t need my money anymore … on account of only offering me a fraction of a percent to borrow it from me. And instead, they’ve decided that it’s just much more profitable to simply live off of my interest on the money that they lent to me … wherever it may have actually came from!

Think about it – mathematically, why in the world would you ever pay someone 8% to loan their money out at 12% when you could just as soon loan money out at 25% and keep it all for yourself?! 😡

It’s why the word predatory gets thrown around so much with bankers lately because that’s really how they’re acting – they know that people have overextended themselves, and so once you’re at the end of your rope, what’s the sense in cutting you any slack? Except for bankruptcy, but that doesn’t really seem to phase anybody these days, either. Why should I get a break on my interest rates when I’m making my minimum payments already. Sure, they’re exactly that – minimum payments, but at least the bank gets their share…

The truth is, it’s really frustrating to look at the amount of debt – not even counting the house – that we currently have today, and to look at the amount of money that we pay each month just for the purpose of borrowing that money … it’s a lot, needless to say. We could definitely have some nice weekend stays over at Disney – on a monthly basis – if it wasn’t for all of the cash that we blow in interest payments every single month.

But it’s a vicious cycle and they start us very young – I turned 18 before my senior year of high school and remember bragging to my friends about my brand new credit card that came with a $300 limit and I don’t even know what the APR was. Even before that, my Mom let me use one of hers to buy some music equipment that to this day still sits under a sheet in her basement … credit card debt has followed me for damn near half my life at this point, and right now it’s currently got a stronger grip than it ever has before.

Don’t get me wrong – we certainly had fun with it and I certainly don’t regret the experiences, but it is kind of depressing to think that in the grand scheme of all this time that I’ve been borrowing, I probably could’ve gone on twice as many vacations and bought twice as many Legos with the massive amounts of money that Iof ‘ve paid year after year, just for the privilege of having that money a little bit sooner than it would’ve taken us to earn it…

It takes so much discipline to pay off your debts, and I say that as somebody who’s regularly added two more for each account that I’ve closed over the years, but I’d like to think that we’re getting closer to getting our shit together in our own house to finally make a difference. It’s hard when something new always seem to pop up when you least expect it, but we’ve also been getting better at saving money to pay for those types of things so that at least we can use our own money instead of having to borrow it from someone else at 20%.

Who knows – maybe this newfound anger with be enough to help us get things moving in the right direction once again, so that maybe we can actually try to raise our son in a home where half the contents aren’t made possible by a deceptively generous revolving loan from Chase Manhattan Bank. With all of the money that this kid is going to cost us, the last thing that we can afford to do is be pissing money away each month on credit card interest… 😳

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