Screw the banks

[lessthanluke]

22 hours ago, Rhom said:

Perhaps its different in the states than on your side of the pond.  Over here, most states have a legally mandated minimum level of coverage.  Basically, you have enough insurance to take care of someone else if you injure them in a wreck; but your insurance pays nothing for the damage to your car.  Increasing levels of coverage are more expensive, so many drivers do not carry enough insurance to replace/repair their car.  If you have a loan, typically the bank will require you to carry enough coverage to protect their investment.

That's what I meant by the second sentence.  If someone can't afford the insurance on their car, they are driving too much car.

I don't really have any clue what you're talking about. I was bringing up a reason why someone would be forced into getting a loan/finance. Insurance has zero to do with it. 

[Fragile Bird]

24 minutes ago, lessthanluke said:

I don't really have any clue what you're talking about. I was bringing up a reason why someone would be forced into getting a loan/finance. Insurance has zero to do with it. 

If I understand correctly, he was assuming that if you had insurance coverage that paid you the replacement value of your car, you would have used the insurance money to replace your car after your accident without needing to take out a loan.

His argument is you avoid problems like getting into debt by properly protecting yourself in the first place. ie if you can’t afford the cost of the car insurance, you shouldn’t be driving a car.

[Loge]

2 minutes ago, Fragile Bird said:

If I understand correctly, he was assuming that if you had insurance coverage that paid you the replacement value of your car, you would have used the insurance money to replace your car after your accident without needing to take out a loan.

His argument is you avoid problems like getting into debt by properly protecting yourself in the first place. ie if you can’t afford the cost of the car insurance, you shouldn’t be driving a car.

Problem with that is that it only works with fairly new cars. If you have a well-preserved but old car then it's technically worthless despite being perfectly functional and what little money you might get from the insurance won't buy you an adequate replacement. I guess one should somehow hedge against the risk of losing such a car, but insurance isn't the solution. Better put the money in a savings account.

[baxus]

I see banks as kind of a necessary evil.

I mean, I didn't have enough money to pay cash for an apartment and had to take a loan. Sure, the bank will charge me an interest on that money and make a profit. Still, I will end up owning an apartment and bank's profit will cost me less than rent would for the same time period. As a bonus, I get to keep the apartment.

Sometimes I have unexpected expenses or need to pay for something in monthly installments so a credit card comes in handy. As long as I keep up with my monthly payments, it basically costs me nothing. 

The point I'm trying to make is that doing your homework before getting a loan and being as disciplined as possible when it comes to your expenses goes a long way in helping reduce the chances of getting screwed by the bank.

You just have to always keep one thing in mind - bank is not your friend, was never your friend and will never be your friend. Banks have always been and will always be after one thing only - profit. If you can help them make bigger profit, they will treat you better. If you expect a favour from the bank, don't hold your breath. It is that simple. Once you realize that, things make a lot more sense.

 

[lessthanluke]

1 hour ago, Fragile Bird said:

If I understand correctly, he was assuming that if you had insurance coverage that paid you the replacement value of your car, you would have used the insurance money to replace your car after your accident without needing to take out a loan.

His argument is you avoid problems like getting into debt by properly protecting yourself in the first place. ie if you can’t afford the cost of the car insurance, you shouldn’t be driving a car.

Ahh well you can't legally drive without insurance so yeah I had full insurance. My car was just old so not worth anything. Think I got 200 pound payout. 

[lessthanluke]

1 hour ago, Loge said:

Problem with that is that it only works with fairly new cars. If you have a well-preserved but old car then it's technically worthless despite being perfectly functional and what little money you might get from the insurance won't buy you an adequate replacement. I guess one should somehow hedge against the risk of losing such a car, but insurance isn't the solution. Better put the money in a savings account.

Exactly. My car ran great but it was 15 years old so worth bugger all. 

[Guest]

5 hours ago, Loge said:

Not to defend the bank, but it's not their fault if you run out of cash at the end of the month. Your real problem is somewhere else. I suspect that a large fraction of your income is eaten up by recurring payments. Are you sure that nothing can be done to bring them down? 

My fucking head is about to explode.

It is absolutely the fault of the bank if my hypothetical self is further in the red at the end of the month than that self would be in a sane world because they chose to process a transaction I made on Thursday before a transaction I made on Monday so they can charge me extra overdraft fees, no?

As far as running out of money at the end of the month at all, well that's because society, especially in the U.S., is structured in a way to ensure a permanent underclass of the working poor which the wealthy are allowed to prey upon and exploit at will. 

Unscrupulous overdraft fee charges, usurious payday-loan lending, outrageous medical bills, lack of a guaranteed national health insurance system, a fucking national $7.25/hour minimum wage. Employers stealing wages. The tightest labor market we've had in decades without a corresponding rise in average wages. The systematic, decades-long push to gut labor unions and collective bargaining. Outsourcing or automation of jobs. Company mergers and layoffs for "redundancy". I can go on and on.

And then some chucklefucks who will remain nameless come in here and tell us people are poor only because they keep going out and buying Starbucks and they're just too stupid to manage their money, so of course that makes it okay for predators to prey on them. 

Bullshit.

[TrueMetis]

Love all the useless "solutions" yep, the problem is totally that these people are out there spending tons of money on shit they don't need. Not that the bare fucking minimum is beyond them.

But yeah, those stupid poor people wouldn't be poor if they just stopped going to restaurants. Jesus Christ.

[Altherion]

9 hours ago, The Great Unwashed said:

This is absolutely false that banks no longer practice "reordering" - organizing transactions to maximize overdraft fees. Here is a New York Times article from 2016 describing the very same practice.

TD Bank collected $11 billion dollars in overdraft fees, for just one example.

Banks still regularly leave debit transactions "pending" for days on end, hoping that additional charges come in that will allow them to restructure the transactions to maximize overdraft fees. Some banks will even, when deposits and debits are made in the same day, will process the debits before the deposits, in order to incur overdraft fees.

And even if things got marginally better for a short while through the CFPB, what the fuck do you think is going to happen when Mulvaney continues gutting the regulatory power and oversight of the bureau?

It looks like the CFPB made overdrafts opt-in only in 2017. I don't think Mulvaney will remove this, but it's not going to help the people who deliberately rely on overdrafts to cover shortfalls. The real problem here is that people are trying to outwit the malevolent contract critter at its own game and failing miserably. As quite a few people in this thread have already said, don't do that. Just don't.

[Rippounet]

This is part of what has been called the "poverty tax": the fact that poor people end up paying more for comparable services, just because they are poor.

For example:
https://www.thedailybeast.com/americas-poverty-tax-how-the-working-poor-get-stiffed
https://en.wikipedia.org/wiki/Ghetto_tax

 

[TrueMetis]

Everyone here should be familiar with the Boots Theory of Socioeconomic Unfairness.

[ThinkerX]

To a limited extent, I must agree that part of the fault here lies with the customer, not the bank.

 

Again, I have witnessed quite a few people dig oversized financial graves for themselves with credit cards.  Most of these people had no idea how to budget, which carries over into debit card/check usage.  Alas, this group includes my lovely young daughter, who is continually making withdrawal's from the 'bank of Dad.'  I have watched some of these people go through bankruptcy because of their debts and STILL not learn financial discipline.  Bad spending habits simply continued. 

 

I had to exercise iron financial discipline when building the house - half a dozen years with 99% of my income going to either bare bones bill paying or material to build the house.  One thing I did that helped a great deal was to pay the utility bills off on the old place for several months in advance - which meant that money normally used for that was now free for construction.  I still routinely pay my bills off months in advance. 

 

That said, I am highly un-thrilled with many of the fees and charges imposed upon accounts. 

 

 

 

[Guest]

1 hour ago, TrueMetis said:

Everyone here should be familiar with the Boots Theory of Socioeconomic Unfairness.

As true and illustrative as the Boots Economic Theory is, even that I consider more of an unfortunate side effect of poverty. What really chaps my ass is that there are entire business models devoted solely to keeping poor people poor, to exploiting their misfortune, their misunderstanding of financial matters, and their poverty to reap huge profits and to make sure those same people stay poor. Because if poor people are no longer poor, that fucks with their business model. And we just can't have that.

[Altherion]

1 hour ago, Rippounet said:

This is part of what has been called the "poverty tax": the fact that poor people end up paying more for comparable services, just because they are poor.

This is an inevitable consequence of capitalism. First, it is often cheaper to spend more money upfront to buy an item of quality or to buy in bulk. Second, if dealing with a specific individual is not profitable, banks and other corporations are not obliged to continue doing so. From your article:

Quote

Call it a poverty tax. It’s the hundreds of dollars, if not thousands, in extra fees that people making $20,000 or $25,000 or $30,000 a year pay because they live on the economic fringes. These days it takes more money than ever to be poor.

The corner check casher takes the biggest bite, at least from those 20 million or so Americans who have no bank account—the so-called unbanked. In the main these are people who’ve messed up their relationship with a bank. They’ve bounced so many checks that no bank wants them as a customer. Or they’ve racked up so many fees they have dug too expensive a hole from which to escape.

This is simply the extension of the credit rating in the downwards direction. People in this situation are not necessarily poor and the poor are not necessarily in this situation, but it's certainly more common among the poor. It might be possible to ameliorate some aspects of this (e.g. the government can simply cash checks from verified employers in post offices or something of the sort), but in general, the problem is not solvable within the current economic and moral system.

[Yukle]

12 hours ago, TrueMetis said:

Love all the useless "solutions" yep, the problem is totally that these people are out there spending tons of money on shit they don't need. Not that the bare fucking minimum is beyond them.

 

12 hours ago, Rippounet said:

This is part of what has been called the "poverty tax": the fact that poor people end up paying more for comparable services, just because they are poor.

I think some users on this forum have always lived comfortable lives. It is hard to empathise with the idea, unless you've witnessed it, that having a full-time job and buying literally nothing but the bare essentials is still beyond many.

It's especially hard given that wage increases have not trended alongside cost of living increases for at least two decades in most OECD nations.

[Altherion]

9 hours ago, Yukle said:

I think some users on this forum have always lived comfortable lives. It is hard to empathise with the idea, unless you've witnessed it, that having a full-time job and buying literally nothing but the bare essentials is still beyond many.

It's exactly the opposite: it's hard to empathize with, for example, the people in the article above who make $20-30K because I've lived on that kind of salary and I can't figure out what they're doing with the money that causes them to get into trouble with the bank.

[baxus]

On 5/26/2018 at 7:43 PM, The Great Unwashed said:

And then some chucklefucks who will remain nameless come in here and tell us people are poor only because they keep going out and buying Starbucks and they're just too stupid to manage their money, so of course that makes it okay for predators to prey on them. 

Far from it that that goes for all people who are struggling financially, but it does for some.

I mean, I've seen way too much financially irresponsible behavior from people around me to dismiss that as a factor.

The misunderstanding we're having here is that people are taking the behavior of a part of the group (be it the part that's struggling because the system is rigged against them or the part that behaves irresponsibly when it comes to finances) and project it to the whole group.

On 5/27/2018 at 8:53 AM, Yukle said:

I think some users on this forum have always lived comfortable lives. It is hard to empathise with the idea, unless you've witnessed it, that having a full-time job and buying literally nothing but the bare essentials is still beyond many.

Well, I've witnessed my parents both having full-time jobs and making a grand total of 10$ A MONTH. Also, at 8 or 9 years old, I've stood in line for hours just to get to buy such fine luxury as bread. If you think I'm exaggerating, google what happened with Serbian economy in the '90s. If anyone has anything to beat that I'm all ears.

Even now, 25 years later, some of my friends with university degrees make 300-400$ a month and living with their parents in their early thirties since they can't afford to move out.

It definitely sucks to be in that position and there are many of them that are doing their best to get out of it but there are some who are just not making wise decisions and are just digging themselves a deeper hole. It would be plain stupid to try to deny the existence of either group.

[Inigima]

I don't disagree that people need to exercise fiscal discipline but it's hard to believe anyone wishes to extend that to defending predatory bank practices, and it's insane that anyone thinks they are mutually exclusive. There are three main assertions flying around here:

• People should be disciplined about how they spend their money and not spend more than they have
   
• Compensation for workers is messed up and many are living paycheck-to-paycheck and not earning a reasonable amount, and that can make it harder to do that
   
• Banks shouldn't intentionally play games with transaction sequence in order to maximally fuck workers out of money

But all three of those can be true simultaneously and to think that people shouldn't be mad about the third one is kind of nuts.

[Altherion]

1 hour ago, Inigima said:

I don't disagree that people need to exercise fiscal discipline but it's hard to believe anyone wishes to extend that to defending predatory bank practices, and it's insane that anyone thinks they are mutually exclusive. There are three main assertions flying around here:

• People should be disciplined about how they spend their money and not spend more than they have
   
• Compensation for workers is messed up and many are living paycheck-to-paycheck and not earning a reasonable amount, and that can make it harder to do that
   
• Banks shouldn't intentionally play games with transaction sequence in order to maximally fuck workers out of money

But all three of those can be true simultaneously and to think that people shouldn't be mad about the third one is kind of nuts.

I don't think anyone has actually defended the third one, it's the first and the second that are in conflict. That is, we all agree that banks should not play such games, but given the influence of the financial sector on everything in our country, it's really difficult to stop them from doing so. Thus, the advice here was mainly along the lines of your first bullet point (because they can't play these games with people who don't overdraw their accounts in the first place) and the response to this advice was mainly to accuse it of being useless due to your second bullet point.

[Yukle]

11 hours ago, baxus said:

Well, I've witnessed my parents both having full-time jobs and making a grand total of 10$ A MONTH. Also, at 8 or 9 years old, I've stood in line for hours just to get to buy such fine luxury as bread. If you think I'm exaggerating, google what happened with Serbian economy in the '90s. If anyone has anything to beat that I'm all ears.

Even thought your profile says your location is in Belgrade, I'd never really joined the dots on what life must have been like growing up for you. That can't have been fun at all.

Looking in, Serbia certainly seems to be in a much better position than it was when I was a kid and we saw it on the news a lot... for mostly sad reasons.

One of our French teachers at school is from Serbia, although she'd be a lot older than you. Her husband emigrated to Australia during the 90s and sent basically all but subsistence funds back home so the rest of the family could eventually join him. Which they now have, thank goodness. It horrible for her, though; their son spent his years from 2 until about 6 growing up in shared care. She still had to work, too, and he'd go to his grandparents' houses and then to friends' houses and then sometimes just have to look after himself.

Things seem a lot better now, though, yeah?