The Truth About Banks

Let's not let banks off the hook.

It can be argued that people that got us in this mess are the individuals that didn't pay off their mortgages.

But the truth about banks is: THEY WANT PEOPLE TO GET BLIND-SIDED. I just got a credit card offer for my business. The offer is from National City (who coincidentally was just bought out by PNC bank yesterday - but whatever)

The offer promises 0% APR on balance transfers for over 1 year! And no annual fee. These are lures to get me to use the card, of course. The stuff is blatanly IN BOLD when it is "good". The bad stuff is in fine print.

Anyway, so this all sounds pretty good -
they want me to switch DEBT onto a card with their bank (or PNC bank now I suppose).

Reading teh non-bold type reveals that after the introductory period, the APR ranges from 7.99% to 20.99%. That seems like a pretty significant window to leave open eh?

So I read a little more: "Payments will be applied to low APR balances before paying off higher APR balances, which means if you make purchases the may accrue finance charges". WOW - thanks for telling me! IMAGINE if there were no laws telling them they needed to disclose this - WOULD THEY?

My point is this: Banks make some of their money by using the naive judgment calls of otherwise sane people. They would like people to be in debt and paying interest.

A mortgage is a great example of this. Anyone who has a mortgage is in debt and owes the bank money. This is the most accepted an politically correct debt to have because you can write off interest on your taxes. Unfortunately for home buyers, the interest they pay ends up costing them more that the house itself. I'm not saying this is bad or wrong or the people don't know this - but it's what makes banks and their CEO's rich.

So I'm not a money whiz or an ex-banker … but teh very nature of banks is one that instills a sense that borrowing from banks is NORMAL and "the right thing to do". From an early age we hear "put your money in the bank …" but little did we know, the banks are not our friend.

The banks are our "dealers." The drug is debt.