Wednesday, March 28, 2012

Convenience of facts and fees

I recently had an interesting conversation about the merits of convenience fees for extended services with banks and other organizations. It started because someone needed a cashier's check and complained about the $10 fee associated. Why is this necessary when I can write a check? Ok, fair question. A check takes 3 days to clear. A cashier's check is available now. The other benefit of a cashier's check is that it is guaranteed. I can write you a personal check for 100 million, billion, gazillion dollars tomorrow, but guess what? It won't do you a whole lot of good. You know why? I don't have that kind of money. A personal check is backed only by the mouth of the person writing it. It's why many people don't like to accept them. People made full time jobs out of floating checks. A cashier's check is guaranteed. The immediate response was that we can take cash out. Sure you can. Let's say you have the cash in the bank to buy a car. Are you going to pull out $20,000 in bills? I'd do it in pennies, but that's just because it would be funny. What car dealer will accept a personal check for that amount of money? So you get a cashier's check. Apparently the FREE personal check doesn't suit your needs. The FREE removal and use of cash doesn't fit your needs. You need an extended service. So that comes with a fee.

Has anyone ever gone to a concert? Did you get your tickets from the box office or did you use Ticketmaster? I ask because they are always cheaper at the box office. You know why? There is a convenience fee from ordering online or via the phone when you use Ticketmaster. How dare they make money? After all, they are only a for profit business. And as I've said before - the business of business is business. We are here to make money. Plain and simple.

Don't like it? Pull your cash out and put it under your mattress. God forbid you have a house fire. Money is gone. God forbid you get robbed. Money is gone. Now... should a bank go out of business guess what happens. The Federal Depository Insurance Corporation (FDIC) will refund you up to $100,000, which anyone I know that's reading this fits within. Have a credit union and not a bank? Ok, then the NCUA has got your back there. Your money is safe, despite what you may think you know. Banks fail all the time, as of late, but people are safe. It's the multi-millionaires, the ones who CAN write a check for 100 million, billion, gazillion dollars that lose their asses because they not only put their money in the bank but they invested in the bank and the companies that the bank invested in. There is risk there. YOU have none when you put your money in the bank. Understand the difference.

So your money is under your mattress because you feel it's safer there. By the way, let me have your address and we'll see how safe it is. Anyway, let's talk about interest for a moment. The interest rate sucks, right? Right. I agree. Damn banks and their interest rates. Wait a minute... hang on a second... the interest rates aren't set by the banks? What's that you say? Placing blame on people who have NOTHING to do with that number. Well that just sounds silly to me. Let's look at the government and the people who actually set that. Remember Alan Greenspan? Know the name Ben Bernanke? They set those rates. The bank bases their rates on what is set by the fed. Apparently while you were busy deciding what to do about the cashier's check fee you missed the news that Bernanke addressed the American public saying that he is less worried than he has been because banks are stronger. I (and you) may not agree with all of his decisions, but I'm pretty sure he's a better economist than we are.

But Americans will be Americans and want to have their proverbial cake and eat it too. "I don't want banks to fail, but I don't want to pay them fees so they can make money and... NOT fail. I don't trust them but I won't ensure their success so I can trust them." That makes no sense. The analogy for ALL Americans at this point is the person you see with a super size Big Mac meal and a diet coke wondering why the diet in the coke isn't helping them lose weight.

Commit to one side or the other. Adopt a policy. Truthfully, I couldn't give less of a shit which way you fall, as long as you do it from an informed place. Spouting opposing truths at the same time is ignorant, but it's what we do. I'm not going to stop educating the masses about the way things ACTUALLY work and making it easier for people. Of course, this needs to be read for it to have an impact. And I'd bet those same dollars that are tucked safely away in my bank account that the people that need this the most aren't reading it. They're busy complaining and getting nowhere instead of getting learned and better.

I'd talk more, but I've got a bunch of cash that I'm afraid will get stolen and I have to put it in the bank to keep it safe.

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