Understanding Financial Services And Fees
The financial services industry has one goal - to make money
. There are fees and charges for every aspect of having a bank account.
So far so good. Though, they aren't charging to breathe the air inside their institutions yet! Seriously, banks and lenders do offer valuable products to consumers and they do need to make money as all businesses strive for.
Though when does the wolf become too greedy? Does not the rapid spread of overdraft programs and their fees seem a bit too much?
These are one of the biggest profit sources for banks. Some banks are charging an estimate of $1 billion in overdraft fees in a year.
There are some products and services offered that exist only to be real money makers for the banks. How can you avoid this trap?
Be a responsible consumer; an educated borrower. Did you know that most people do not understand how to calculate the interest and fees of a loan?
It takes some time consuming math, and an understanding of compounding interest. It can be done and isn't quite as hard as most people think.
So if you can do your own calculations, you can see clearly whether or not if a loan is going to cost you more money in the long run or if it is beneficial to your financial well being.
If you ever have troubles paying a loan, shark loans like this can sink you very quickly. Find the right loan for your circumstances and potential circumstances.
Some people have now heard that when you make a late payment to your credit card issuer, that your interest rate jumps up ridiculously high. We see that there are ways for these institutions to make more money off of the mistakes and bad choices of the population.
Once your eyes are opened to the bigger picture, you have control to get out of that rat race. Evaluate the different kinds of loans that exist and then evaluate several lenders.
It can be time consuming but you will thank yourself later when you have found a good lender with decent products that help you keep on top of your repayment.
Keeping your credit score high is beneficial for you in so many ways. And lenders that have happy customers that bring return business is beneficial for them.
If you find yourself in financial trouble frequently, take stock of your finances; get help if you need it. There are programs in nearly every city that offer everything from basic budget knowledge, to how to invest your money.
There are times when a person needs emergent money and can't get a small loan. Most banks and credit unions do offer smaller loans than they used to, but the approval process is still lengthy.
Payday loans, quick cash loans, and cash advances are all easy to get. Since we were speaking of fees, don't think that cash loans don't come with their price.
If a payday loan term is taken for long enough it gets out of control quickly. But if you were to need a very small loan, of say $200, and want to pay it back quickly instead of months of interest, the process is easy and a good short term option.
Payday loans are simple and the process made easy by an industry that wants to offer an easy service like this. Word to the wise though, as stated before, the interest that comes with cash loans is high because these loans were created to be short term.
As with any loan, a borrower must be aware of the fine print, the overall cost of the loan and familiar with the penalties of non payment. Some people are drawn in by the ease of cash loans and then find it a habit that gets hard to control.
So what is the moral of the story? It is that you need to be an educated consumer and research any financial decision you make.
by: Tom Selwick
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