|
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.
By 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, in some cases supply uniforms etc., it
is conceivable that your one banking transaction per pay period could cost the
bank $3 or more for your one banking transaction.
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. become 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) costs the bank around $100,000
each plus the cost of the computer network and maintenance, the cost of these
type of transactions drop to $0.50 — $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.
|
|
This is an excerpt from ONE PAYCHECK AT A
TIME,
www.onepaycheckatatime.com by Kimberly A. Griffiths, ISBN:
1591133327. ONE PAYCHECK AT A TIME, a 200 page workbook, contains budget
management exercises for an entire year of paychecks. The author,
Kimberly A. Griffiths, has been through the vicious cycle of debt
herself, and provides a no-nonsense system to managing your money
paycheck to paycheck. You customize the journal based on your pay
schedule and learn the necessary tools for making ends meet.
More Featured
Articles Here To submit your
own article, please email it as a text attachment to: alovelinksplus.com
We do not compensate authors for being published at aLoveLinksPlus.com but we
will provide a link back to your website and you will maintain the copyright
to your submitted article. Email us for further details. Not all submissions
will be published. |
Today's Question