CreditCardsAct

1. Their branches are there to sell you, not serve you
In the late 1990s it was decided bank branches to replace bank branches by Internet banking and ATMs, because they were considered outmoded relics. But this didn’t happened, and for 9 years (1998-2007) their number only increased from 89,000 to 97,000.
SNL Financial analyst Jennifer Payne explains: The industry realized that banking is profitable and that proximity is the main criterion consumers use in choosing a bank

Moreover branches are a banks primary sales floor.
Everyone from the teller can make a sale, because brochures for services are on display. The current low-interest-rate climate makes it harder to generate revenue from interest alone.

A teller might suggest you meet with a loan officer to discuss a home-equity loan because many players in the industry have been trying to boost fee- and service-based income. A customer will stay with the bank with which he has more products.

2. Their fees will only go up
Banks are looking for reliable revenue streams with the economy in a slump and big losses crippling in the mortgage market. So punitive fees for using a competitor’s ATM or overdrawing your account are increasing. According to the Center for Responsible Lending between 1998 and 2007 the average ATM service charge doubled, overdraft fees brought in $17.5 billion in revenue in 2006, up from $10.3 billion in 2004.

3. They change their interest rates all the time
You can never be sure how much interest banks will charge you, regardless of what your credit card agreement says.
Usually after two late payments in 12 months banks apply for a default rate — as high as 30%. But some banks cut that to one late payment.
Sometimes e the terms of you agreement can be changed by banks, they can raise rates when they like. recently Bank of America did that, they upped cardholders’ rates from 10% or 12% to 27% or more.

4. College campuses are gold mines for banks
Banks are increasingly courting students, often right on campus, because they are the customers of the future.
Many universities (about 120) are dealing with banks, they issue student ID cards that are also ATM and check cards. These deals are very profitable for schools that can make millions on such deals.
For credit card issuers students are a hot market.
To get contact information for students, parents and people who buy tickets to university athletic events banks make private deals with alumni associations. For setting up booths on campus card companies cut deals with universities too.
Universities don’t think about students’ convenience, they only think about benefits for university.

5. The courts won’t help you if you are in debt

Banks have been including mandatory-arbitration agreements since 1990s. They have done it for many of their products – auto loans, home-equity loans, checking accounts and credit cards.
Such agreements require you to use an arbitrator named in your card contract to hear the dispute and decide the outcome.
The banks use thee clauses for debt collection, though they were originally designed to thwart class-action suits. Sometimes consumers aren’t present when awards are handed down against them. It happens because they have become victims of identity theft and unaware of the debt

6. Banks have a good benefit from your trips abroad

The dollar has struggled in recent years against most major currencies. When you travel abroad every your transaction comes with great fees attached. Taking out cash, for example, in London’s ATM you get large foreign-transaction fee and a fee for using competitor’s ATM. At all you will pay $7 for withdrawing $200.
Credit card purchases are not perfect as well. For converting currency MasterCard and Visa charge 1% of the purchase price. Besides the issuing banks may take 3% of your purchase price. But if you don’t travel much overseas you don’t feel this.
If you travel a lot abroad you can determine the lowest overseas-transaction fee on your
cards charges. A Capital One credit card charges no overseas-transaction fees will be the best for travelers.
Partnership between your and foreign bank will be quite convenient for you. For example, Bank of America partners with Barclays Bank, so their customers save $5 per withdrawal from Barclays’ ATMs in the United Kingdom.

7. For all the fine print, they don’t disclose very much

Banks don’t load their documents with all detailing terms and conditions. It’s difficult to find out exactly what you’re signing up for when you open an account. Though banks are required by law to make the information about their fees and other conditions available for their potential customers, most of them don’t do it as the Government Accountability Office reports. More than half of the branches the GAO has seen don’t have any information about fees on their Web sites. It means that consumers can’t make informed choices.

8. Your money might be better off elsewhere

There are a lot of ways to earn interest on your money that banks offer: certificates of deposit, simple savings accounts, individual retirement and money market accounts. But they don’t guarantee the best return. The average savings account pays about 0.5% interest. At the time you can do better — 3% and even more.

Maryann Johnson, the senior vice president of wealth market management at the bankers association says that now banks propose some other financial services: financial planning and comprehensive wealth management, insurance and brokerage services.
a bank’s most profitable customers use these services, because they keep very high balances and are less sensitive to fees.

9. Sometimes smaller banks are better

Over the past decade Banks have been consolidating much. In 1990 there were top 10 banks and they controlled 25% of all the market, now only half. The customers of such big banks can use vast networks of free ATMs and branches across the country.
But big bank are not the most convenient. For example in 2006 they generated 54% revenue of fees at the time when small banks generated 28% from fees.

Moreover big banks pay out less interest.Usuallyt small banks pay higher interest savings accounts and other products. In 2006 the smallest banks paid paid 4.37%. in interest for savings accounts, when largest banks only 1.87%.
“The largest banks are no longer worried about being undercut on price,” says E. Wilmarth Jr., a professor at George Washington University Law School.

10. Your online account information doesn’t represent the facts

There are a lot of ways people can handle their finances online: pay bills online, transfer funds, track payments and get a more detailed view of their bank accounts. Unfortunately this information isn’t necessarily accurate.
Banking has gotten more complicated With, ATMs, electronic transactions, direct deposits and check cards. Online bank statements and ATMs will show deposits available before the money is actually in your account. It could be inconvenient in some situations. It would be hard to track your account day to day.
“Banks use different algorithms to process payments than what you see online,” Harvard’s McGovern says. “It gives you a false sense of security.”