Banking

Bank practices: The good, the bad, and the ugly

Martha C. White Dec 3rd 2009 @ 8:00AM EST Filed Under: Banks

A lot of Americans have plenty to say about their banks these days, and it's not always pretty -- we've heard you in the comments section. We wanted to call out some of banks' slimier tricks for separating you from your money as well as recognize some of the helpful tools or innovations (yes, there are a few mixed in with all those fees!) some banks offer.

WalletPop got on the phone with a few top consumer finance experts at watchdog groups -- people who track what the banks are doing day in and day out -- to ask them what today's customers should appreciate and what they should avoid at all costs. Here's our roundup of the good, the bad and the ugly.

The Good
Direct deposit: If your employer or benefits distributor offers this, sign up for it. There's no question this is a good thing. Nearly all the experts we talked to said this is one of the most consumer-friendly practices banks offer today. Not only does your money get into your account up to five days faster than if you deposited a paper check, direct deposit eliminates the errand of physically going to the bank to deposit it. Often, direct deposit makes you eligible for free checking at most banks (although not Citibank, come February). "Generally it's safe to say direct deposit benefits consumers," Consumers Union staff attorney Lauren Bowne told us. In other words, it's a no-brainer.

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10 best electronic payment services

Janean Chun Dec 2nd 2009 @ 4:00PM EST Filed Under: Banks, Budgets, Extracurriculars, Banking-checking-account

Imagine a world where you don't have to write or mail a check, handle paper money or swipe your credit card -- all you have to do is enter some information into a Web site to make a financial transaction. That's the world of electronic payments, and if you haven't discovered the convenience of electronic payments, it's time to get with the e-program.

Whether you're shopping online, paying a bill or using online bill pay through your bank, making an electronic payment is as quick and efficient as a couple of clicks. If you automate your electronic payments, you can also eliminate the "D'oh! I forgot to make my payment" moments in your busy schedule. And as long as you make your electronic payments from a secure server, with a firewall, your privacy should be protected. Plus, you save trees and stamps.

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Early Toys R Us shoppers get worm: 2 charges for purchases

Sarah Gilbert Dec 1st 2009 @ 2:15PM EST Filed Under: Banks, Shopping, Black Friday, Credit cards

Over the Thanksgiving weekend, I swiped my debit card to get on the light rail and was billed for a bus ticket the machine wouldn't give me. I had to pay $1.50 again to get my oldest son onto our next connection. I know! Frustrating.

As someone who's always living on the very edge of black in her checking account, I know too well the dangers of unexpected transactions, and for me they come in $29 overdraft increments. Customers at Toys R Us this weekend, shopping before regular store opening hours during Black Friday, experienced a similar and far more account-balance-deadly problem: double billing.

Keith Bossey, a marketing and strategy consultant in New York City, may not be at the edge of his bank account, but he just found out today he was double-billed for his purchase.

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Senate bank bill could allow 'too big to fail' banks to grow even bigger

Bob Cesca Nov 30th 2009 @ 5:30PM EST Filed Under: Banks, Borrowing

The chain grocery store where my wife and I shop has a bank in it. There's the frozen food section, the bakery section, the pharmacy and ... the bank. It's not even a particularly large grocery store, but there it is. A bank. With a vault, a sit-down area and everything.

I'm not sure how common this is, but it certainly represents the trend here which appears to be rapidly nearing a ratio of more banks than people. Or at least, more banks than McDonalds, Subways, Starbucks, Walmarts and Targets -- combined. That's not an exaggeration. Within short walking distance of my very suburban neighborhood, there are four banks not including the one in the grocery store. Two of those banks are directly across the street from each other.

And, by the way, there are fewer community banks and credit unions here.

With that in mind, I had no idea that there were local laws regulating how many branches a bank can open in a particular states. Oh, and, according to Ryan Grim, Congress and the Treasury Department is trying really hard to undermine those laws.

Continue reading Senate bank bill could allow 'too big to fail' banks to grow even bigger

Overdraft fees ruled legal in England

Geoff Williams Nov 30th 2009 @ 2:30PM EST Filed Under: Banks

It's probably not something that most Americans are following, but in England, the Supreme Court has been studying the legality of bank overdraft fees and whether the public should be refunded, and their verdict is in: the overdraft fees that have been soaking the British are legal.

Two courts had previously indicated that English banks might have to refund their fees, and I admit the thought made me rather gleeful, and last September in a WalletPop post, I started wondering if some similar lawsuit might make its way through the American courts. Why not? We borrowed The Office from England, and it's worked out so well here. Maybe we could take a real scenario in England and help us over on the other side of the Atlantic.

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Mortgage modifications, take two: Obama tries a bigger stick to make banks lower loan payments

Charles Feldman Nov 29th 2009 @ 10:00PM EST Filed Under: Banks, Real Estate, Mortgages

You know that old saying about how in life there are no second acts? Perhaps not. But that doesn't apply to government work.

On Monday, the Obama administration is set to try one more time to get mortgage companies to reduce payments in an effort to bring a halt to ever-mounting foreclosures.

The first effort was a huge flop: Of the half million or so loan modifications made since the first push was on, only about 2,000 became permanent, according to a Congressional oversight panel.

In an interview with the New York Times, Michael Barr, the Treasury Department's assistant secretary for financial institutions said, " The banks are not doing a good enough job ... some of the firms ought to be embarrassed, and they will be."

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Five words to never to say to your lender

Lita Epstein Nov 27th 2009 @ 6:00AM EST Filed Under: Banks, Credit, Debt, Fraud, Recession, Credit cards

Getting a loan can be a difficult task in this economic environment. Many lenders won't even consider an application for a mortgage unless your credit score is above 740. Others will consider an application, but zap you with an outrageous interest rate.

Even if you have excellent credit, there are still some phrases you should never say when trying to get a loan. For example:

1. DESPERATE

One of the worst things you can say to a loan officer is that you desperately need the money, then ask how can you speed up the loan process. That's putting a big red flag in front of the loan officer. He'll wonder what the emergency is and is more likely to decline your application.

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ING bank offers Black Friday deals

Martha C. White Nov 25th 2009 @ 1:30PM EST Filed Under: Banks, Saving Money, Black Friday, Banking-checking-account, Banking-savings-account

The down side of saving a big chunk of change on Black Friday is that you usually have to spend a lot of money to realize those savings. That's why we at Walletpop were happy to see a Black Friday deal that is literally just about the savings.

On Black Friday, online bank ING Direct will announce special interest rates for opening a CD or the brand's signature Electric Orange checking account (they're keeping mum on the details of those rates until Friday but have added a teaser page to their Web site).

This blog has details of two other promotions, though: a $683 discount off an ING mortgage (the amount is the average dollar cost Americans spend on holiday gifts annually, according to the National Retail Federation) as well as a Cyber Monday 20% discount on trades through ShareBuilder, its trading subsidiary.

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552 banks are currently at risk for shutting down

Geoff Williams Nov 24th 2009 @ 4:30PM EST Filed Under: Banks

Could your bank fail? There's still a chance, but if you study the numbers, the odds are still highly in your favor that your financial institution will be sticking around.

Earlier this week, the Federal Deposit Insurance Corp. came out with its third-quarter report, stating that the number of troubled banks has climbed to 552.

The report reveals the health of the banking system as of late September. The current total of troubled banks is up from 416 at the end of June, and 305 at the end of March.

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Low interest rates good for borrowers, bad for savers

Martha C. White Nov 23rd 2009 @ 5:30PM EST Filed Under: Banks, Banking-savings-account

Americans are saving more of their earnings than they have in years, and that's a good thing. But unfortunately, we're not being rewarded for it the way we were in flusher years.

By now, everyone has heard about the government's unprecedented actions to drop interest rates to historic lows so cash-strapped individuals, businesses and banks can borrow on more forgiving terms. The down side of this is that bank account holders are now getting rock-bottom interest returns on their money.

Currently, we're saving around 3% of our collective income. That's not really an achievement to be proud of -- not yet, anyway --- but it's still a great step up from where we were a couple of years ago when the U.S. had a negative savings rate, meaning that we as a nation were literally spending more than we made.

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If you can't afford mortgage, don't borrow to send kid to college

Zac Bissonnette Nov 23rd 2009 @ 4:30PM EST Filed Under: Banks, Borrowing, College

When I can't think of anything else to write about, I sometimes like to pick up a copy of US News & World Report's America's Best Colleges, and spend about 30 seconds flipping through to find one piece of really, really, really horrible advice.

And so here it is, from an article by Kim Clark:

The federally backed parent PLUS loan can cover the student's entire cost of college (less any other financial aid). But PLUS loans can cost as much as 8.5 percent a year plus a fee of 4 percent of the loan amount, for a total annual percentage rate of as much as 9.4 percent. Shoppers can find discounts, however. Those who borrow directly from the federal government and make automatic electronic payments are charged just 7.65 percent in interest. (After fees, the APR totals 8.55 percent.) And the eligibility criteria are comparatively forgiving, even for parents who are a little behind on their mortgages.

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Personal checks poised to be a relic

Geoff Williams Nov 23rd 2009 @ 3:30PM EST Filed Under: Banks, Technology, Banking-checking-account

Is the personal check on its way out?

The Dallas Morning News recently suggested that -- and, no, they aren't the first to suggest it, nor will they be the last -- but they point out that several stores lately have made it their policy to refuse personal paper checks: Diesel, True Religion, Ed Hardy and Lululemon Athletica, which are all clothing stores. And maybe there's something in the water, since the clothing giant Gap is also exploring the concept of no longer accepting personal checks.

My WalletPop colleague Martha C. White has also written about Whole Foods no longer accepting checks in some stores, as part of a get-rid-of-checks experiment.

Continue reading Personal checks poised to be a relic

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