How banks make billions off of low income people. This is why banks need tougher regulations.

Recently a friend of mine was very stressed out over a simple mistake she made with her bank account. Ever gotten gas with your check card before and forgot that you made the transaction? That's what she did.

Whenever you swipe your check card at the pump the gas station only authorizes $1 from your account to make sure that your card is valid. Then after you pump the gas and get your receipt the gas station has to send your actual receipt to the bank for processing. This process can take 2-3 days depending on the gas station and your bank. Whatever the case, once the receipt gets to the bank then the actual cost of your gas comes out of your bank balance.

Forgetting to calculate a gas charge can be devastating to your immediate financial life. My friend simply forget to calculate $30 in to the balance of her account. When the gas charge actually hit, her available balance was only $28 which means she miscalculated her account by $2. In which case she did deserve a penalty fee. These days a $35 overdraft fee is the pathetic standard and that's what she should have been charged. However, she ended up ponying up $175 in overdraft fees! “How the hell did this happen?”, you might say.

Well banks have a way of creating complex rules to get money that they didn't earn and somehow blame that on the customer that miscalculated an account by $2. Here's how my friend messed up:

If her original account balance was $100 and she swiped her card at at the following places all on the same day like so:

Now any charge on your check card goes into a hold status until the receipt is sent from the actual store. At that point, the money is actually taken off hold and sent to the store. If you look at the chart above, because my friend swipe her card multiple times on the same day all of the receipts came in at the same time. So instead of the bank doing the moral and ethical thing which would be to only charge her for the one mistake that she made, the bank decides to charge her $35 for all the transactions that were made on that day!

Why? Because technically speaking all the transactions cleared against a negative available balance. Even though some of the transactions appeared to have cleared the minute she swiped the card. They didn't. Thus giving the bank, according to their own made up rule book, the right to charge her 5 times the amount of the actual error.

If you don't understand all of this banking stuff, it's ok, they made the rules specifically so you that it confuses the hell out of you! Your ignorance equals the banks profits. These policies of greed and manipulation were created in the late 80's and early 90's when the ultra conservative “Reganized” way of thinking was that if you're broke or poor it's your own fault. That it was OK to overcharge someone for there own mistakes. The deregulatory policies created in the 80's were then practiced through the Clinton administration and blew up in our faces when the banks destroyed the economy under George W. Bush.

Ultra bogus bank fees to low balance or low income account holders have made a 30 billion dollar industry in the past 10 years. Not to mention that they have become the banks most profitable income source! (imagine that!) Some of you have forked out hundreds even thousands of dollars a year to the greedy corporate thugs that dominate the United States of America.

Every industry in the world has rules... Except the financial services industry. They're rules are so relaxed that they have been allowed to rape people of all income levels for years. Some people have been raped by the credit card companies where it has been LEGAL to change the interest rate on a card simply because they felt like like. So you agree to 7% and they send you a bill for 30% and there is nothing you can do about it.

Here are some ways to get around the banks slimy business tactics:

1. Stay off the plastic! CASH IS KING!!! Cash can't bounce, your bank cant manipulate you out of hundreds of dollars if you don't rely on them so much.

2. If you must swipe, when at all possible, Use DEBIT for your transactions not credit. This is when a store asks you for your cards pin number. The DEBIT transaction is just like a transfer from your bank to the stores bank and doesn't have a 2-3 day float. So basically when you use a debit card the money is gone!

3. Use a local bank. Stay away from the big banking chains. You're nothing more than an account number to them. Go with the local bank that remembers your name when you come in and treats you like a human being. They tend to be more geared towards what makes their customers happy, not so much what makes their profits better.

My friends, in closing I would like to say... Keep every dime that you can for yourself, don't give it away to the filthy evil money drinking jerks called corporate America. Hahaha!

Empowerment is everything...

~~Shawn “Riff-Raff” Broadnax