Many banks around the World know certain tricks and secrets that they are certain that if they were released to the public, everyone who knew would become rich overnight. Henry Ford once stated that “it was a good thing that most people did not know how the banking system worked because if they did there would be a revolution by the next morning”. The statement that Mr. Ford made seems to be just as applicable today as it was in the 1930s. This is not to say that banking is a bad omen. Bank do make some information available to the public but not all of it. They also provide us with very useful services. These are the secrets that banks don’t want you to know.
Secrets that Banks don’t want you to know- What is the purpose of the banking system?
The first bank in the United states was opened for business under congress in 1791. The bank’s purpose was to create a standard form of currency, raise money for the new government and handle debt from the Revolutionary War. Since then many banks across the World have opted to follow the Americans and implement similar banking laws and policies. Banks have developed into more than just places where money is stored or saved.
Banks have become places of business where anyone can access a variety of services as long as they are qualified enough. They offer a variety of loans, credit cards and investment options just to name a few. Then there is the matter that no one wants to save their money at home anymore. Where would they even put it? Under their matrass? The point here is that banks have become an essential part of our lives and many of us can’t seem to do without their services.
The truth is that banks were established with the intention of gaining a profit from the financial services that their customers access. So the conclusion here is that the main purpose that a bank serves is to earn a profit from the financial services which they offer. The profits are made in a variety of ways like bank fees or interest on loans ect.
The secrets that banks are not telling us
The truth is that banks are cashing out big time and this is usually at the expense of the unsuspecting public. Most financial institutions operate in complexed and unusual structures. Many of these unusual practices are usually concealed from the prying eyes of the public. Whether you are borrowing a loan, investing or banking your savings there are numerous ways in which banks make money off us and some of us don’t even realize that we are being milked.
We lose money every single year that you keep it in the bank. This is due to the fact that banks usually charge fees in order to keep our money and they directly dip into our savings and withdraw those fees. Not all these fees seems are necessary but they charge them with the intent of making a profit for the service which they provide. This is not the major secret though. You lose money because of inflation. Inflation is the increases in the prices of goods an services over a certain period of time. A 20 dollar item today will cost slightly more next year and the price could potentially double over a 10 year period.
When you assume that the money in your account is safe you would have to expect that the value remains constant over the years but this is not the case. Banks also earn from your card transactions. Every time you swipe your credit card and purchase goods or services processing fees are paid over to the banks. You may only be debited for your transaction but the merchant pays the fees. It is possible that the merchant can also include these fees in the sales price, afterall no one wants to shorten their profits.
The interest rates on your credit card can be raised at any time. Many persons are ignorant to this and banks get away with it because when some persons are signing their contracts for their credit card they just go ahead and sign because they find it annoying and unsatisfying to go over and read all the lengthy, legal writing, as a result they unknowingly sign to conditions like this. This can work against you at times because the truth is the interest will just continue to go up, overtime and if you don’t pay off your fees, you will be is serious debt.
Always try to keep in mind that your money in the bank is not physical, in fact it’s just a bunch of numbers that are stored in electronic records. The truth is your money is actually in different places making more money for the bank. This came to light in 2008 during the financial crisis. Many persons panicked and went to the bank to withdraw their money but the banks never had enough money to give everyone.
It is possible that the have it in liquidity but its still not physical and as a result of this it can’t be physically accessed. This is not to say that you won’t be able to access your money in the event of a crisis though. There are laws and guidelines in place and governments can intervein in the event of a crisis. Bankers are not to be trusted because they may seem friendly but in the end they are only working with the best interest of their bank of employment in mind. One tip is to always check your bank account. It is an essential part of your life because you wouldn’t be able to conduct business on a daily basis without money.
Neve become too busy or too lazy to check your account. A major fact is that some hidden charges may be deducted from your account overnight and it’s always good to know so your finances and budget can be kept in order and the necessary adjustments can be made.
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