4 things banks don’t want you to know
Banks are still the most widely used financial service today, especially with their credit cards or salary accounts. And, as you know, their big business consists of hiding things from you that benefit you, but that stop them from making money.
This article highlights the four secrets banks do not want their customers to know.
1) The minimum payment trap
Banks offer credit card users to make the minimum payment, that is, a generally low amount of money, equivalent to 1.25 percent of the total of your credit line or 1.5 percent of your balance, to keep the balance of your plastic and keep your account current.
Be careful, it’s a trap! What financial institutions do not reveal is that, if you make this payment, your debt increases because you are generating interest and it can become unpayable.
The best thing to do is always to pay the minimum amount each month so as not to generate interest or the total of your debt, which will prevent your debt from increasing and your finances will remain healthy.
2) Various charges
Financial institutions manage to charge for many services: for withdrawing cash from ATMs, for checking our balance, for replacing plastic due to theft or damage, for additional checks, annuities, and so on.
The ideal way to avoid this is to compare before opening any account or taking out a loan with any entity, so that you pay as few charges as possible. In addition, always remember to read your contract carefully, since there you will find charges that, possibly, the executive omitted at the time of giving you information.
3) There are options with lower interest rates
Lower your salary, the higher your interest rate, since you are a riskier customer for the bank.
However, there are now fintechs that offer personal loans with an average rate which is much lower than what banks charge, so they are clearly a better option.
4) It is possible to pay less interest on your debts
Let’s suppose you got into debt and are paying too much interest on your loans and credits, so you are interested in unifying your financial commitments in a single payment, which will help you save interest and focus on a single debt.
This option exists and of course the banks don’t want you to know about it. It is known as debt consolidation. And normally, it is the financial technology or fintech platforms that provide this service, since their rates are much lower than those of a traditional finance company.
I am Nikesh Mehta, owner and writer of this site.
I’m an analytics and digital marketing professional and also love writing on finance and technology industry during my spare time. I’ve done online course in Financial Markets and Investment Strategy from Indian School of Business. I can be reached at [email protected] or LinkedIn profile.