Maybe you haven’t heard, but big banks are still in the game of taking advantage of you.
This past week the Consumer Financial Protection Agency announced that Wells Fargo, one of the nation’s largest banks, would pay fines of $185 million for scamming its customers.
Wells Fargo’s employees were guilty of setting up nearly two million fake checking and credit card accounts for customers, all without the customers’ knowledge. In the process, customers were charged unnecessary fees related to the sham accounts.
Last year, Citibank was forced to pay $700 million to customers who had been subjected to illegal practices related to credit card add-on products, including credit monitoring and fraud protection services.
If dealing with fraud wasn’t enough, big bank customers must still deal with excessive fees and poor returns on their savings and checking accounts. Wells Fargo’s Way2Save savings account, for instance, offers a paltry 0.01% return on savings. If you had $1,000 in such an account, you would earn only 10 cents in interest each year. But, if you let your balance in this account fall below $300 in any given month, you’re charged a $5 fee. Talk about highway robbery.
But you can avoid big bank abuse altogether. Consider switching to a credit union.
Unlike banks, which are focused on making profits for shareholders, credit unions are not-for-profit financial cooperatives whose focus is on providing the best service for members. Excess earnings are passed on to members in the form of greater returns on savings, lower loan rates and better credit card terms.
A 2015 Credit Union National Association report estimates that credit union members collectively saved more than $9 billion last year by banking at a credit union instead of a bank.
By law, credit unions are not allowed to serve the general public. They must restrict their membership to a pool of people who share a so-called “common interest.” This may include employment at the same company, enrollment at the same school, membership in a particular organization or residence in a certain geographical location.
Fortunately, almost every person in the US has a “common interest” that allows them to join a credit union. To find a credit union you’re eligible to join, simply visit ASmarterChoice.org
Stop being played by your big bank. Fight back. Joining a credit union is one of the smartest money moves you can make.
BMWK, are you satisfied with your bank? Have you considered a credit union?