Banking costs and staying sane.

In my opinion a good part of surviving is staying sane and saving money. One way to save is to move your money to lower cost banks and credit unions.

http://baselinescenario.com/2010/02/22/big-banks-are-more-expensive/

But there is also the sanity side of the situation. IMO the large banks have gone out of their way to wreck the system. Makes me mad. But it also makes me feel frustrated. I want to do something but can't. Or can I?

I have no illusions that shifting my relative pittance will cause the presidents of the major banks to slash their wrists in a fit of depression and shame. It is a nice mental picture.

Okay, it isn't going to change the world. But taking my money away from them makes me feel better. You also might find that while your bank account isn't big enough for the big boys to worry over it is a significant sum to a much smaller local community bank or credit union.

I can't hurt the big banks much but moving my pile of pennies feels good. It makes me feel less helpless and more in control. And that is a good thing.

Read more about it:
http://moveyourmoney.info/

Find a local bank/credit union:
http://moveyourmoney.info/find-a-bank

Shamelessly lifted from:
http://scienceblogs.com/mikethemadbiologist/2010/03/why_i_moved_some_of_my_money_t.php

Two issues to take into accoun to though.

1: Big banks contract out their services to smaller banks. Since smaller banks/credit unions don't have the resources to tooer the large varity of products that big banks do the smaller ones can just sell the big bank service with small bank's name on it.

2: Big banks have to adhere to more regulations when it comes to disaster recovery and such. The best example is NOLA, there were people with small banks there who lost everything and had no access to funds because the small bank was under water too. I don't know how it was all sorted out in the end, the news never mentioned since it probably happened a lot later.

Now the disclaimer, I work for a big bank, but the only services I use are the basic accounts that are free to anyone using direct deposit. I also have accounts at a smaller bank as well, gives me some redundancy.

But, if they are FDIC insured, your money is safe, is it not? Even small banks, at least around here, have FDIC insurance-which, as long as you stay under $100,000, you can recover your money. Now, I have no idea how to go about that. I personally bank with USAA, which doesnt have a physical address-they are an online bank, to the best of my knowledge. I also have a checking account open with a large, physical bank, which allows me to cash checks, should that need arise. But, back to OT, I am assuming that as long as it is FDIC insured, you should be OK, correct? Blanket statement I know-provided you again have less than the amount allotted. And, that being said-if you have a mortgage through the bank, does THAT count towards the cap? Or any kind of loan....this is something I never really considered before....

Sure, ok in the long run. What happens in the days or weeks following a disaster, how do you get to your money, how do you proove what you had, whose word wins in you say you had more than the bank says once they dig their records our of the remains. You will eventually get it back, its the time in between that I worried about. I have accounts at tow banks so if sone does have an issue I can use the other in the meantime,.

Again, thats a great topic-these are things I honestly never considered. If they are small banks, one hopes they keep records elsewhere, to avoid this situation. However, small, rural banks may not have that luxury. I know next to nothing about the banking industry, or any requirements-I can certainly see money on hand being an issue in a local disaster-I would suggest maybe a credit card, unused, as a backup-for those types of events where you need a place to stay for a couple of days, or need to purchase transportation. If the whole banking industry collapsed, I would think that where you kept your money could be the least of your issues.

The small credit union I belong to uses a service to provide online banking, ATM connectivity and back-end computing support. They provide account access at any credit union branch that belongs to the service; they say there are over 6300 locations. As long as I have ID, the name of my credit union, and my account number (memorized) I can walk into any of those locations and get at my money.

My accounts are insured by NCUA, which is very FDIC-like.

It would probably be safer if I kept funds in a large national FDIC-insured bank as well, but I don't have enough money for that to make a lot of sense.

This site doesn't address the concerns with the records in a small bank after a disaster, but it does provide some decent information on the finacial solvency, or lack there of, of a given bank.

http://www.bankrate.com/rates/safe-sound/bank-ratings-search.aspx

I think having cash on hand is always a prudent measure. Maybe even split over at least two secure locations. Even something as simple as a backhoe cutting through a major fiber optic line or some fallen tree that blacks out a large area could block access to ATM's or credit card transactions, even during normal times, requiring cash to get things done.

In addition, having direct deposit, setting up automatic debiting of important bills, like your mortgage payment, setting up online bill paying, using telephone services, using ATM's, using credit cards, etc., could very well keep you going even if the branches themselves are not open right away.

Of course, if ALL the backend stuff at your bank is compromised, then you're really in short term trouble. But even then, in cases like Katrina or Ike, the FDIC and state banking regulators asked banks to do things like cash checks from non-customers, waive ATM fees, forgive late/missed payments, loosen lending standards for short term loans, etc.

And I have my money at a local credit union, for "philosophical" reasons, as well as better rates, lower/fewer fees, and better service. Since credit unions typically share an ATM network or allow you to bank at other CU branches, I don't even need to pull my money out of my credit union, but use a closer credit union's ATM machines to do my withdrawals and deposits.

And I do keep cash around but I'm not going to use it to pay the electric bill for examle. Thats where the direct deposit and online bill pay work. I have a checking account at both banks and have part of my pay going into each. If one bank account were to be non accessable for whatever reason both are setup with all the account numbers of the bills so I can pay them from either. This way i can use the cash to rent a hotel room or buy meals or whatever and then sign in on the web page and pay any of those long term bills as needed.

Getting cash and service after a disaster is, of course, a concern and the actual outcome remains to be seen. We only find out for sure in the moment. Hard to know for sure whether a large or small bank gives better service ahead of time.

But I must point out that to a large bank you're likely to be so small a depositor, excluding the resident millionaires here, that your little more than an annoyance. At most your an account number and someone to nickel and dime with fees for extravagances like ... well ... walking into a bank, talking to a teller and handling your own money.

Chaps my rump when they act like they are doing me a favor allowing me to deposit and manipulate my money. Looking down their noses at me and like I was a Dickensian orphan asking for more porridge ... and bill me for the privilege?

On the other hand at the local credit union I'm a name and a face in addition to an account number. I have met the president and many of the officers and wasn't made to feel like a Dickensian orphan reaching above his station. I know where the president lives, a modest house and the only one she owns, and it is just a few miles from my house. I can't know for sure how it goes down after a major disaster but I expect that being a face and a name, and their habit of working primarily with small depositors, I get a little more attention and consideration.

I also feel like I'm more in charge of my money. Which means a lot.

And thats why my money goes in both. Big bank gets a direct deposit and I do online bill pay out of that account. If we need anything else we use small bank.
My big bank credit card was declined from lack of use the last time I tried to use it. Had to call and reactivate, I hadn't used it in a few months.

There is also checkingfinder.com

It lets you search high(er) interest checking accounts offered by some credit unions. I'd use one of them, but to get the higher interest rate you need to use their debit card 10 or 12 times a month. This doesn't fit my current system, where I keep only a small balance in the account I use for debit card purchases.

One of the other things I did was close all accounts I had at any but the two banks I keep. So at each of those I have checking, savings, mortgage, credit, cd, etc but only at those two banks. This way if my wallet is lost or stolen i onlt have two places to go report the loss rather than keping track of 10 different store cards.

Y'know, one of the things that galls me about a number of different industries, including retail banking, is how more and more of their revenue stream is derived from various fees and penalties imposed on their existing customers rather than through their primary business function. For example, instead of banks using depositors' money to lend to creditworthy people and businesses to do productive things with, they shamelessly pillage their own depositors for more and more fees. One overdraft can trigger a whole series of overdrafts and more penalties that can quickly snowball into ridiculous amounts.

It's really crazy and most of folks just "take it" or worse, just are totally oblivious to how much money (which could be used more productively, like for emergency preps!) is lost this way. So, where we bank really does have an effect on our ability to prepare for life's little (and big) emergencies.

Speaking of banks. . . Money As Debt

The finance industry, particularly the credit card side, have done a lot of research in psychology to determine exactly how to take advantage of the known faults in human cognition.

They know, for example that if they manipulate the due date of a payment so it falls on a Sunday they will have a jump in late payments. Figures I've seen say roughly a 5% to 10% jump. With every late payment they get to charge a late fee.

But it only starts there because people who are most likely miss a payment are also the most likely to be near their credit limit. For some of those people the late fee will cross their credit limit which ... wait for it ... triggers another fee and increases the odds they will charge something after they have crossed that line.

Which, wouldn't you know it, can trigger a separate, high interest line of credit. In essence instead of just rejecting the charge the company signs the person up for a high interest personal loan. And they consider this to be a 'service'. In theory you can tell the credit card and debit cards companies to simply reject the charge. But in practice it is almost impossible to have them not include 'automatic overdraft protection' in any plan. They make too much money on it to not automatically sign you up for the 'service'.

The pattern of behavior is well known to loan sharks everywhere. Find someone who is about to find themselves in a hole and hand them a shovel. At least leeches are honest about sucking your blood. They take the blood and leave. These people want to suck your blood, collect a fee for the privilege of having your blood sucked, and make believe they are doing you a favor.

About credit and credit cards. Reading this site, watching the show, could save you money:
http://www.pbs.org/wgbh/pages/frontline/shows/credit/

I laughed hard when a banking executive claimed that people who walk away from 'under water' mortgages are breaking a social contract. In effect he is saying the bankers can screw you and it is 'just business', and good for America. But a consumer walking away from a financial trap, taking the credit hit but divesting themselves of a long term losing proposition, is somehow a moral failure. Funny how the rules only cut one way.

Unrelated but interesting:
http://scienceblogs.com/mikethemadbiologist/2010/03/sunday_sermon_in_defense_of_de.php

Misconceptions about deficits:
http://scienceblogs.com/mikethemadbiologist/2010/03/more_on_misunderstanding_defic.php

To survive modern times people have to know something about money, debt and how so many of the 'known facts' are simply wrong or are being used out of context.

It also helps if people are a little bit angry. It is easy to get overwhelmed by the intricacies of finances and stop reading the credit card bill closely. Getting mad helps get people motivated to look closely at what the financial sector is pushing onto us both individually and as a group.

i read somewhere that it's easier to steal $1.00 from a million people than it is to steal $1,000,000 from one person. banks learned that some time ago.

I just read that the banking industry brought in $40 billion just in overdraft fees alone last year. That is a lot of money.

Edit: Oh, I was just reading about BofA's new announcement that it will stop automatically charging overdraft fees. How gracious! Unfortunately, the truth is that they're just following a new rule that kicks in this summer. Bank customers must opt-in for overdraft protection, otherwise those overdrafts will simply be denied.

Considering the $40 billion figure I mentioned at the top, you just know that banks will make up that lost revenue some other way. And also slash customer service to reduce costs and maintain their profit margin. Do you like talking to a real human being? Sorry, we're closing all our branches in your city and you'll have to do all your banking at this dinky ATM machine in the back corner of the drug store from now on. Have a nice day and thanks for banking with us!

Last year I asked my bank to configure the account I use for debit card purchases such that instead of allowing an overdraft, it simply declines the transaction.

There are caveats. For instance, if I have $20 in the account and the gas station does a temporary authorization for $1, it will go through. Then if I buy $30 of gas and they post the transaction the next day or so, it could overdraft. Likewise, if I only want $20 of gas and the gas station tries to authorize $50, it won't go through.

Seems that the new legislation will require you to opt-in for overdraft "privileges" instead of having it by default.

I guess the obvious solution, then, is to not overdraft, not do credit any more than is absolutely necessary, and live within our means.

Like Grandad said, when the mason jar was empty, you were broke, that was all there was.

Always a good thing.

Debt is a four letter word.

I went through the first few in the series. They make some points but I have to point out a few flaws. First, the videos are being pushed by people trying to sell you silver. As if precious metals were not subject to manipulation. Simple question: why is it people telling you about how profitable metals are are always trying to Sell you them? If they were going to be profitable wouldn't they be Buying them?

Second, the argument is clearly being shaped semantically. It is an old debating trick. If you control the terminology used you control the outcome.

The whole money as debt argument is an oversimplification. Calling it debt spins it as intractably negative and infinitely so. You could as accurately, and effectively, call it 'confidence'. Which is much more positive and inherently self limiting. That it is functionally accurate ought to tell you something.

Yes the banking system has a lot of flaws. Leveraging money is potentially problematic if it isn't controlled. But being able to get credit, and funds finding more productive places than under the mattress to spend time, are both good. But as with all things it can be pushed too far.

When the leverage is leveraged and the leveraged leverage is leveraged it is obviously getting skeevy. When a homeowner can't figure out who holds the mortgage it is a problem. When the bank listed on the loan can't, because it has been securitized and sold and resold as part of a tranch with a thousand other mortgages, you know your down the rabbit hole.

Credit, debt, or confidence, can become addictive. Real estate wasn't an issue before people took it to be such a sure thing that it was guaranteed to pay off big and could be used as an ATM.

It isn't the desire for a simple, steady profit that runs thing into the ditch. It is the constant demand, largely coming from the stock market, that demand not only profits, but increasing profits. At some point the profits that can be physically and legally squeezed out of a system are realized. The only remaining course to gaining increased profits is to cheat. And once you get into cheating it get easier, even accepted. Which is the bind.

It is far easier to show a profit, and an ever increasing profit, by manipulating the accounting like Enron, churning a market to a froth like what was done with real estate, or simply making it all up like Bernie Madoff.

The natural tendency is to avoid asking too many questions about systems that are making you money. And high profits in one area justify high profits in another. In such a market the honest businessman making a small but steady profit is the odd man out. The grifters and scammers look like heroes and the honest man looks like a laggard in comparison.

But remember that precious metals are not immune to manipulation and cheating. Going back to a gold based monetary system is a pipe dream. Markets for precious metals can be run up. Physical products, particularly those not used in a functional devices where the physical properties are tested, can be faked. Nothing is assured.

For all the problems with fiat money, confidence based money, the benefits easily outweigh the liabilities. The key here is regulation and both strong accounting and reporting standards. Adam Smith in the 16th century, considered to be thee father of capitalism, knew that regulations, government regulations, were vital.

The things that are clear are that sellers will always be serving their interests before yours. There are no simple solutions.

"one word Benjamin, one word...nickels..."

With due apologies to Calder Willingham and Buck Henry the screenwriters of "The Graduate", Mike Nichols, Dustin Hoffman, Paul Simon and Art Garfunkel.

Whenever I see, hear or read about anyone wanting to sell me something that guarantees that I'll make money with it, I ask myself why in the world anyone would sell such a thing and not buy it themselves.

Thank you all for the insights you offer in this thread, it is great food for thought.



Apart from the speculation issue, buying silver is just replacing one kind of money with another. Both silver, gold, paper money and clam shells works on the confidence we put into them. To me it seems kind of naive that we should loose confidence in some kind of money (paper money and electronic numbers in the bank), but not in others (silver and gold). Apart from making pretty jewels and physical conduction paths for heat and electricity, silver and gold have close to zero practical value.

"Money is hardened sweat". A. O. Vinje (wikipedia)

I would tend to agree. In a SHTF mode, I would think copper and lead would be of more practical value than silver and gold.

Wow. . . fiat currency has an intrinsic value of the paper it's printed on versus precious metal being a tad more difficult to conjure. . . there's a reason central banks deal in gold.

And their launchers.

"You can get further with a kind word and a gun than you can with just a kind word."

"There's a reason central banks deal in gold"

Actually that notion is becoming quite antiquated. They deal in electrons now. Sure, they have their "reserves", but the reason for using precious metals in the first place was their limited availability. If you are going to put a value on something, make sure it is something "intrinsically" rare to begin with. Bankers don't use sand because the vault size would be too big. Precious metals are practical, but not intrinsic, other than perhaps for electro-conductive and decorative reasons. At $1,000 an ounce, I can be content with using copper or paint. With the advent of the electronic age, Banks don't move coins and bars around, they use wires.

"Credits" is the new coin of the realm. In Vegas, it is credits or chips, depending on how high you roll. When they convert to Quatloos I will be really worried.

Never mind, we're going off topic.

I want to know what the future holds. Last night I ordered two used books on the Great Depression. There are several hundred available on www.half.com ...no affiliation. I need to learn to be more like my grandfather.

Test,test

Working now I guess.

A much longer post got lost in the ETS machine.

I also have checking accounts in two banks. The smaller local (family owned) bank is paying much better interest than the larger bank that was part of one of the big mergers and now has branches coast-to-coast. So they have bigger expenses and need my money to make more money pay their bills.

I am slowly shifting funds from larger to smaller such that the smaller bank is my biggest deposit. The larger bank is not my friend; I expect the smaller bank to be a better survivor.

I for one will welcome the new overlords from Triskelion if it means being exercised and trained by leggy ladies with big hair wearing silver bikinis. Angelique Pettyjohn made a lot of otherwise disinterested boys into dedicated Star Trek fans.

For the kids who missed the classics:
http://en.wikipedia.org/wiki/The_Gamesters_of_Triskelion