There has been a lot of hype this past weekend over “Move Your Money” day or “Bank Transfer Day” where the response to higher fees by the big banks is to move money to a community bank or credit union or online bank where fees will be lower. I am certainly not opposed to the idea. In fact, I think it is a good one. As consumers, it is wise to get the most service for your money whether it is banking or plumbing or getting your hair cut.
Personally, I have not been impacted by the proposed fees so I won’t be moving my money until absolutely necessary. I am happy where I am right now with my current financial institutions. It would be somewhat of a hassle to have the automatic deposit changed and make sure that it is working properly to make such a transition.
Instead, I plan to protest against the big banks in another way. I don’t plan on occupying anything, either. So what do I plan on doing?
I plan on living off less and paying off debt!
A Better Way
Look at the amount of interest that you pay to the big banks every month on credit card debt, automobile loans, mortgages, student loans, and other lines of credit. I can tell you that I pay a pretty penny which is much more than $5.
According to the 2010 annual report for Bank of America, the amount of net interest income amounted to over $52 billion! That is a lot more than the amount that was expected to be generated from the $5 debit fee.
Even though I do not have a checking account with Bank of America, I do have a couple home loans (from the Countrywide purchase) and a couple of credit cards on which I pay interest. I plan on attacking my Discover Card first, but believe me that I will be getting around to Bank of America next.
What About Savers?
Maybe you already are living debt-free. My heartiest congratulations. You are to be commended for your discipline and deserve the fruits of your labor. At least you aren’t paying interest to the big banks, but are you letting them use your money for essentially no cost?
I would trust that you have discovered better ways to invest your excess money than depositing it in savings accounts or CDs at the big banks. Peer-to-peer lending might be one of the alternatives to the low yield on savings. Many investors are getting decent returns that rival those of the stock market.
I wonder how many of those who have switched from the big banks carry interest on credit cards that have been issued by the big banks.
Now I don’t plan on figuring out myself exactly how much I can decrease the interest expense by paying off these debts early, but I can tell you that it will add up to quite a bit and will be much more than $5 per month. In fact, the credit cards show me the amount of savings from paying off the balance in three years rather than just making the minimum payment each month.
Of course, making sure that all bills are paid on time and not over drawing the checking account are other fees that should be avoided at all costs. These are the fees that will kill you and contribute to the profits of those big banks which seem to be the subject of such public ire.
Readers: What do you think? Did you move your money? Do you carry a credit card balance? Is there a better way to protest against Wall Street?