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Banking


Banks typically look for every possible instance to charge customers to fees. That’s why it’s particularly important to stay aware of your bank account balances. With the increasing popularity of automatic payments (outgoing) or automatic withdrawals (pulls), a poorly timed deposit can result in overdraft fees or insufficient funds (NSF) fees. A few years ago, I took a survey of the different ways banks process their customers’ debits and credits, and saw how easily it would be for banks to trap customers treading close to low balances in a maze of fees.

For example, let’s say you have $500 in your checking account at the beginning of the day on September 1. You could have previously written a check for $600 to pay your September rent, you could have an automatic withdrawal using your debit card scheduled for $300 to pay your electricity bill on the first of the month. You go to the bank after work and deposit $500 into your checking account.

Some banks would process the rent check first, generating one overdraft fee of $35. This would be followed by the $300 automatic withdrawal, processed during the ACH batch, but now your balance is a negative $135, so you receive a second overdraft fee and a balance of a negative $470 before your overdraft coverage comes from your savings. Finally, the bank processes your deposit, giving you a balance of $30.

Had the bank processed the deposit first, you would have saved $70. And if the payments were returned rather than covered through overdraft fees, you might have caused problems with your landlord or your electric company. Banks justified these techniques with two specific claims:

  1. Larger withdrawals should be processed first because they usually represent more important payments, like rent and mortgage payments.
  2. There’s no consistent way for banks to know what time an automated transaction is received, and thus most transactions should be processed in batches at night.

Consumer groups have criticized banks for this approach because it isn’t consumer friendly, it’s designed to maximize profits at the expense of customers, and it’s rather easy to improve. And after class-action lawsuits and guidance by the Consumer Financial Protection Bureaus, more banks are improving their procedures.

Wells Fargo is in the process of making some positive changes. Again, I’m a long-term customer of Wells Fargo, or to be more accurate, I’ve been a customer of a string of banks that, through a series of mergers and acquisitions, has ultimately (so far) become the bank known as Wells Fargo.

As of August 11, Wells Fargo no longer posts checks and automatic payment transactions (ACH) from highest to lowest value. Instead, the bank will post transactions based on the date and time the bank receives them. It still isn’t as simple as it sounds. Wells Fargo doesn’t post these transactions immediately. That happens during the same nightly batching process. Each branch has a cut-off time for deposits, but you may not see that cut-off time until you visit the bank or ATM.

Cash deposits and transfers made before the cut-off or after the cut-off and before batch processing begins will be counted as available when other transactions are posted during the batch process. Check deposits might not clear the same day, however. After the any qualifying deposits are posted, Wells Fargo will process debit card purchases, ATM withdrawals, account transfers, online bill payments, and teller-cashed checks based on the time the transaction occurred.

Then, Wells Fargo pays your checks and automatic payments. This is the category that used to be prioritized by value, from high to low. Now these will be processed in the order the instructions were received by the bank, and if no time information is available, they will be processed from low value to high.

Wells Fargo has some additional changes coming in September. More transactions will be considered “pending withdrawals” during the day. Previously, you wouldn’t be aware of pending withdrawals during the day, but now, Wells Fargo will mark them as pending withdrawals as soon as they are received, and reduce your available balance immediately. The withdrawals will still be processed during the nightly batch. If you look online, you’ll be able to see pending withdrawals beginning September 19.

While these changes do reflect some improvements and perhaps some clarity over the old system, there are still certain instances where customers can find themselves with multiple overdraft fees or returned payments.

Even diligent people make mistakes with their financial accounts. But the best way to avoid having to deal with these issues is by taking a sensible approach to account balance maintenance:

  • Know how much money is in your bank account.
  • Don’t write checks or initiate automatic withdrawals using money that isn’t in your account and available today.
  • Keep track of your finances so you don’t have any questions about whether your payments will clear your bank account.
  • Always keep a solid buffer in your checking account. Choose a buffer amount that covers your weekly transaction volume.
  • Set up an alert (with your bank, with Mint.com, with Quicken, or with some other tool) to alert you if your balance is low.

Wouldn’t you know it, I found myself dealing with an overdraft fee recently. Yes, even people who write about personal finance make mistakes. To be honest, as budgeting became less of a necessity for me, I let some of my financial guard down, and haven’t been tracking my finances as closely as I used to. For many years, I looked at Quicken on a daily basis, but I haven’t done so in a while. I’m trying to get in the habit of checking my transactions once a week, but it’s going to take me some time to improve the accuracy of my transactions over the last year or so.

For more information on Wells Fargo’s new posting order policies, you can read this PDF.

Were you ever stymied by the way your bank processed your deposits and withdrawals over the course of one day? Are these changes by Wells Fargo significant improvements?

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Two years ago, Wells Fargo changed its customer agreement, taking away the rights of customers to resolve disputes with the bank through the typical legal process afforded citizens of the United States. Current Wells Fargo customers tacitly or knowingly agreed to sign away these rights in favor of an arbitration system that favors wealthy corporations.

Although I wrote about the change on Consumerism Commentary, changes like these go largely unnoticed and don’t get a lot of attention in the media, even from consumer-focused outlets.

To be honest, I still have personal and business accounts at Wells Fargo. I’m continuing to look for a credit union that is convenient enough for me to move my primary banking. I’ve opened and closed dozens of bank accounts to review the companies for Consumerism Commentary readers, and one of these days, I will close my account at Wells Fargo.

The process of closing a checking or savings account is thankfully straightforward, and Wells Fargo will not make you jump through hoops in order to complete the process. Before you close your account at Wells Fargo, though, be sure to download the latest version of the Bank Switch Kit and Checklist.

The Bank Switch Kit has specific tips and forms for making sure your account is ready to close. First, you’ll have to make sure you have no automatic deposits or withdrawals. That might involve changing your direct deposit instructions at your job or changing your bill payment accounts. A standard form included in the Kit takes care of the first issue.

After ensuring you have no future deposits or withdrawals, you have to move your balance to zero. If your balance is less than zero, Wells Fargo will not let you close the account before paying what you owe. If you don’t pay what you owe, even if you don’t believe it’s your fault the account is negative, the account will go into collections and it will be more difficult for you to open a bank account anywhere else.

Most likely, your balance is above zero, and you have to clear the balance out before closing the account. With Wells Fargo, you can either transfer the balance to an external bank account linked to your Wells Fargo account. If you don’t have an external bank account linked to your Wells Fargo account, you can add the external account by logging into your account online, selecting “Transfers & Payments” from the menu, then selecting the “Transfers” page.

There are several links on this page to add your non-Wells Fargo account for transfers. It will take a few days to confirm that you own the external account.

If you already have a linked account you can use this page to transfer your full balance out of Wells Fargo into a different financial institution.

Another option for moving your balance to zero is to request an official bank check (a cashier’s check). You can do this in any Wells Fargo branch or you can request a check through the mail. Unfortunately, Wells Fargo charges a fee for cashier’s checks, whether you request them at a branch or through the mail. To request a check through the mail, send a notarized letter requesting the check and the closure of the accounts, and a confirmation of the address on the account, to the following address:

Wells Fargo
350 SW Jefferson Street DP5
Portland, Oregon, 97201

Once the above is complete — you will have no future automatic deposits or withdrawals and your balance is zero — you can officially close the account. If you do not do this step, you will continue to have an account at Wells Fargo with a zero balance. If that’s the case, you could run afoul of minimum balance requirements. You will be charged a monthly fee for your low balance, and your account will have a negative balance. You will owe the bank money.

Make sure you continue the process to close the account. You have three options for doing so.

Option #1: The internet. Log onto your Wells Fargo account online. Select “Contact Us,” a link at the top of every page on wellsfargo.com. On the right side of the Contact page, under “Other Ways to Contact Us,” select “Email Us.” You can choose the account you’d like to close, and choose “Account questions or requests” as the subject of your email.

Leave the next three fields blank (Transaction Date, Transaction Amount, and Account Number), and state in the Questions or Comments box that your account has a zero balance and you would like the bank to close it. Click the Submit button at the bottom of the form and wait for confirmation from Wells Fargo.

Option #2: The phone. Call the bank at 1-800-869-3557. You will be asked to enter your account number right away, and then you’ll be given the options. Choose to speak to a customer service representative to close your account over the phone.

Option #3: In person. Walk into any Wells Fargo branch and a manager can complete the process for you.

Thankfully, the process for closing a Wells Fargo bank account is easier than it is for other banks. Do you plan to close your Wells Fargo checking or savings account? If so, why? If you’ve already closed your account, were you pleased with the process?

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The U.S. Postal Service could offer basic banking services to customers, many of whom do not have reliable and affordable access to mainstream banking products like savings accounts and forms of credit.

From the moment I heard this, it sounded like a bad idea. Not long ago, discussions about the U.S. Postal Service focused on the question of ending delivery on Saturdays, the closing of 700 retail locations, and the elimination of the U.S. Postal service entirely. And now, there’s a proposal with studies claiming legitimate benefits across the board for expanding the services offered by this semi-private, semi-government entity.

The U.S. Postal Service has a weird existence. It is an independent government agency that operates like an independent corporation, but it is subject to congressional interference, oversight, and direction. USPS is not funded by tax revenue, yet the government still directs how the organization’s revenue is spent.

Providing the U.S. Postal Service with another profit center, like the ability to profit from basic banking services, might help the organization grow in strength.

The domestic precedent for banking at the post office.

In 1907, the United States suffered an economic recession, and this crisis was followed by a “panic” in 1910. The American public reacted by losing trust and faith in the banking industry, and in a bid to get money moving through the economy again, the Post Office began offering savings accounts in 1911. This made basic banking services available to working class people, who felt either abused or ignored by the financial industry. The savings account earned depositors 2% interest, while the post office earned 2.5% interest on the deposits by investing them with the mainstream financial industry.

The Postal Service continued offering deposit accounts through 1967, but still continues offering money orders, which allow customers to send money in cash form relatively securely from one location to another.

The social environment that spurred to government to allow the USPS to start offering banking services exists today. According to Elizabeth Warren, a senator who is in favor of expanding the Postal Service’s relationship with retail money-handling, “… [T]he average underserved household spends roughly 10 percent of its annual income on interest and fees — about the same amount they spend on food.”

The poor is spending too much money on non-bank financial services like check-cashing and payday loans. Poor communities turn to predatory, high-cost financial services because they don’t have many choices. Banks — and even credit unions, which are thought to better support local communities — do not set up retail locations in economically-stressed neighborhoods because it’s not profitable. There’s little trust in either direction between the banking industry and poor communities. Even if convenient retail locations did exist in high-poverty locations, customers would not walk through the doors.

But everyone goes to the Post Office or receives deliveries from a letter carrier. While the USPS reach in rural locations isn’t great, delivery services touch almost every household in the country, regardless of socio-economic status. If the U.S. Postal Service is able to offer check-cashing and small loans, and perhaps limited deposits again, and able to offer such services at a lower cost than what is currently available, it could mean a better lifestyle for those living in tough financial situations.

The foreign precedent for banking at the post office.

Other countries have successfully implemented similar models.

  • In Australia, you can bank at the post office. Australia Post works in partnership with the financial industry to accept deposits and make withdrawals and pay credit card bills.
  • In the United Kingdom, the Post Office offers banking services that compete with retail banking, and has recently expanded their selection of banking products. The Post Office in the UK is structured differently, with a different service that handles delivery and collection of mail (the Royal Mail), and both are now private companies than they are government agencies.
  • La Poste in France has its own banking subsidiary, La Banque postale, and post offices in that country offer banking services.
  • Poste italiene in Italy, which was once a government-owned monopoly but is now a public company under government control, offers financial products such as savings accounts and prepaid cards.
  • The postal service in Japan, again a former government agency that has gone through privatization, offers a variety of financial services including savings accounts, government bonds, investments, and loans.

The banking industry isn’t a fan of the idea.

Banks don’t want competition from outside their industry. Competition of this kind is a threat to the reputation of the industry, especially when an organization as unhealthy as the U.S. Postal Service can come in and undercut their pricing. A recent article in American Banker, the trade publication of the American Bankers Association poked fun at the idea that the USPS could serve poor communities better than the financial industry with “15 reasons why the post office should stay out of banking.” Each “reason” was a Tweet in which a Postal Service customer complained on Twitter about an interaction with the mail or an employee of the post office. The 15 reasons were in fact just one: poor customer service.

Customer service is a legitimate complaint. It seems far-fetched to take a work force that already seems displeased with the responsibilities they have and introduce more services. They will need training. They will need more staff to handle larger volumes of customers. The proposal could take a generally bad customer experience and make it much worse.

But the postal service does not hold a monopoly on bad customer service; in fact, the post office and the financial industry are roughly tied in the American Customer Satisfaction Index (ACSI). When it comes to pointing out customer service issues, the banking industry can sit back down.

Some in the U.S. Postal Service approve of the idea.

The U.S. Postal Service Office of the Inspector General released a white paper with research about and support for the idea. The Postal Service considers itself to be one of the most trusted companies in America (citing the Ponemon Institute’s survey which named the USPS the fourth most trusted company in the United States), but the organization isn’t usually included in surveys of the most trusted private companies because the USPS isn’t fully private. If the Post Office is trusted much more than companies in the banking industry, it is well-positioned to handle consumers’ financial responsibilities much better than banks.

The Postal Service is well positioned to provide non-bank financial services to those whose needs are not being met by the traditional financial sector. It could accomplish this largely by partnering with banks, who also could lend expertise as the Postal Service structures new offerings. The Office of Inspector General is not suggesting that the Postal Service become a bank or openly compete with banks. To the contrary, we are suggesting that the Postal Service could greatly complement banks’ offerings. The Postal Service could help financial institutions fill the gaps in their efforts to reach the underserved. While banks are closing branches all over the country, mostly in low-income areas like rural communities and inner cities, the physical postal network is ubiquitous.

Here’s the bottom line. The banking industry has no interest in expanding services to cover poverty-stricken communities and households and those households have no interest in dealing with the banking industry. At the same time, the poverty needs financial services, and they are restricted to their only, expensive options like payday loans and check-cashing storefronts. These products exist because there is a need for them — or for something. So far, this has been the only profitable, and thus sustainable, way to bring financial services to certain communities.

If we can leverage an existing infrastructure to reduce the cost of financial service for the poor, and reduce their financial burden at the same time, it’s worth looking into. The U.S. Postal Service is not always the example of a perfect organization, but it is not any worse than your average bank. Despite closures, the Postal Service has the infrastructure in place to better reach communities underserved by the financial industry. Any other method of expand financial services would require a much bigger investment in infrastructure and would not be financially viable.

The U.S. Postal Service should begin to offer basic banking services, like savings accounts and prepaid debit cards. The financial industry doesn’t need to see this as competition, because the primary target customer isn’t interested in working with a bank, anyway. The Postal Service could partner with the industry behind the scenes to take advantage of the financial infrastructure that already exists. A relationship is possible, and rather than fight society’s attempts to better serve the underserved, the financial industry should welcome any kind of innovation that would help bring banking to lower classes.

Eventually, as households in poverty become better acquainted with financial products, they will become better customers for banks, even if it takes a generation for that to take hold.

Photo: Flickr

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The MONEY magazine published its annual analysis of the best banks in America, and I count at least one surprise among the list of 15 categories. Just last month, personal finance bloggers voted on their favorite banks in the Fourth Annual Plutus Awards, and came up with a list with some notable differences, although the categories are somewhat different.

In the case of the Plutus Awards, financial bloggers placed their votes for the best banks across several categories, considering rates, fees, usability, features, and customer service. A committee tallied these votes, and the institutions with the top number of votes won the awards. MONEY had a slightly different methodology that favored the opinions of the magazine’s editors:

MONEY looked at the 40 biggest retail banks by consumer deposits and number of branches, plus the 15 biggest online banks and three biggest credit unions by deposits, according to financial services consulting firm Novantas…

The top consideration for checking picks was maintenance fees and ease of waiving them, followed by other charges, restrictions, and perks, like interest. For savings and CDs, MONEY weighted rates first, followed by fees, minimums and other rules. For customer experience, we looked at the availability of service; for mobile, breadth of features and ease of use. As a tiebreaker, MONEY used data from independent customer service studies.

Here’s how the MONEY editors compare with the financial experts in the blogging community. I would love to hear your experiences with these banks, particularly if you think the choices don’t ring true for you.

MONEY’s best online bank. The MONEY editors chose Ally Bank. There is no surprise here. Among expert bloggers, Ally Bank was chosen as the winner for Best Savings or Money Market Account and Best Checking Account. If you are interested, apply for an Ally Bank savings account here

MONEY’s best savings account. The tie goes to Barclays Online Savings and GE Capital Bank Online Savings according to the editors of MONEY.

As it happens, I have recent experiences with both these banks, although GE Capital Bank rejected my application without explanation. And according to Consumerism Commentary readers and visitors from all over the United States, I am not alone, despite my excellent credit score and spotless Chex Systems report.

Both accounts offer top-of-the-line interest rates on your savings accounts.

Bloggers chose Capital One 360 for the Best Banking Website and Best Overall Bank. Capital One 360, formerly ING Direct, made no appearance in MONEY’s survey, and I thought this was surprising, considering how many people still see Capital One 360 as the model for modern online banking.

MONEY’s best big bank. The purpose of having a category for big bank seems to be to offer an option for a household who could be banking from anywhere in the country. This isn’t a necessity with the ease of online and mobile banking, including remote deposits using mobile phones. Perhaps there are some people who are just happy with a big bank; after all, I still use my Wells Fargo account as my primary checking and savings and for my business banking.

There’s no corresponding category for big banks in the Plutus Awards because size is not an issue of concern. MONEY prefers to split the industry between banks with at least 1,000 branches and those with less. The MONEY editors chose TD Bank to lead the big bank category. I’m comfortable with this choice. I have a checking account at TD because the branch, particularly the branch’s hours, are so convenient. With generous weekend hours, when I had a day job, I was still able to get into the bank on my time to see a teller.

MONEY’s best customer service. In addition to the editors’ opinions, MONEY judged this category by reviewing independent customer surveys. The resulting winner in this category is Citizens Bank. Good customer service comes with a price. The bank offers low interest rates on savings, and no free checking account. With the checking account options, there are opportunities to waive a maintenance fee that’s as high as $20 a month.

The highest interest rate on savings at Citizens Bank, for college students or home buyers, is currently 0.1% APY. That means you need to keep $100,000 on deposit to earn just $100 in interest a year.

MONEY’s best mobile app. Capital One 360′s mobile application was a finalist in the Plutus Awards, the only app from a bank to make the list, but MONEY’s editors chose the mobile app from Chase Bank as the favorite. Chase’s app has been available for a while; we tried the remote (mobile) deposit feature in 2010.

The app has matured since it was introduced and is now fully-featured software that includes mobile payments to and from anyone in your phone’s contact list. Chase has a drawback in that the accounts available do not offer great rates or easy methods of avoiding fees. It’s a wonder to me why Capital One 360′s app, which combines the same features with better account choices, wouldn’t beat Chase’s app in this category.

MONEY’s best midsize banks. Midsize banks according to the MONEY editors are those with fewer than 1,000 branches, not including online-only banks. The editors chose four banks to spread the selections across regions of the United States.

The four selections are Capital One Bank (not Capital One 360), Susquehanna Bank, Zions Bank, and Bank of the West. Of these, I only have experience with Zions Bank, where I opened a savings account online. My review contains my thoughts on this bank.

MONEY’s best military bank. The choice for the best military bank isn’t a bank at all, it’s a credit union. The MONEY editors chose
the Navy Federal Credit Union, which you can join only if you are in active military duty, work for the Department of Defense or the Coast Guard, or live in the same household as an NFCU member.

The credit union’s interest checking account carries a fee, and for most people, fees negate the interest. Expert bloggers kept USAA among the finalists for several banking categories in the Fourth Annual Plutus Awards, indicating it’s likely USAA would have been chosen by the financial blogging community if there had been a category for military bank.

MONEY’s best checking account. The magazine’s editors sides with the personal financial bloggers for this category, selecting Ally Bank’s checking account as the best in the country. Depositors can earn interest within this checking account, yet Ally does not charge a maintenance fee.

As the editors point out, the interest rate Ally offers on checking accounts can far exceed the interest rates offered by other banks on their savings accounts; savings interest rates are traditionally much higher than rates on checking accounts, but Ally has been working hard to attract depositors since its branding break-up with its former parent, GMAC. It may also be worth noting that Ally Bank was a Plutus Award finalist for best social media, which means the company is putting an effort into reaching out to customers using state-of-the-art communication techniques — like Twitter and Facebook.

MONEY’s best teen and college checking. As I’ve pointed out in the past, sometimes it’s good to use a national bank for a teen who will be or is traveling outside of the home area for college. A large number of branches ensures that the kids and parents can both conveniently access the account — typically with deposits for parents and withdrawals for students. The MONEY editors chose one of my personal picks for best student checking accounts, at Citibank, and also chose another, U.S. Bank, in a tie.

Typically, student checking accounts are free, and the accounts often include features that allow parents who co-sign the accounts keep tabs on their kids’ use of the account.

MONEY’s best account for 12-month CDs. The editors of the magazine give the top props to GE Capital Retail Bank — a different entity than the GE Capital Bank awarded above — and perennial favorite Ally Bank. Ally offers its no-penalty CD for someone who thinks there’s a chance of withdrawing the deposit before the 11-month maturity term with an interest rate of 0.85% APY, but if you’re willing to risk an early withdrawal penalty of 60-days’ interest, you can claim a higher interest rate of 0.94% APY on a 12-month term.

GE Capital Retail Bank’s interest rates for a 12-month CD are tiered. Always check the banks’ websites for the current rates.

MONEY’s best banks for businesses. For established businesses, MONEY recommends Capital One Bank for offering the best checking account. One thing businesses need to be concerned about is the cash deposit limit. Companies that do a lot of business might have deposits that require a level of banking service not typically afforded through retail channels. Large banks usually have enterprise divisions to satisfy those customers. Banks often delineate the level of service based on total cash deposits in a month — and a “cash deposit” includes paper checks — any deposit that is not an ACH or wire. Capital One has a relatively large threshold of $40,000 for its basic business checking.

For startups and side businesses, the MONEY editors point to PNC Bank. PNC’s business banking offers no fees, but has a low $5,000 cash deposit limit.

The slideshow at CNNMoney offers some additional information, but I’m more interested in readers’ experiences with these banks. What is your favorite bank in the United States today? Do you think the MONEY editors are off the mark in their evaluations?

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Money Systems That Lead to Success: Automatic Savings

by Luke Landes
Make Savings Automatic

Last month, I wrote about the opinions of Scott Adams on his eventual success as the creator of the comic strip Dilbert. I focused on the failure aspect of the article he wrote for the Wall Street Journal, and I only touched lightly on the success factors. A system, a methodical way of approaching any ... Continue reading this article…

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Received a Postcard From Bank of America But No Check?

by Luke Landes
Bank of America Class Action Lawsuits

If you’ve received a postcard from Bank of America informing you that you should expect to receive a check as part of the overdraft lawsuit, but you haven’t received a check, you may be wondering what you can do. Consumerism Commentary receives many questions about these checks because I’ve written about them and the lawsuit ... Continue reading this article…

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The Occupy Debit Card

by Luke Landes
Occupy Banks

Can an organization offer mainstream financial products while being ideologically opposed to the mainstream financial industry? That’s the question I began considering when I first heard that the Occupy Wall Street movement was in the process of developing a prepaid debit card product. The Occupy Debit Card is still just a concept, but if the ... Continue reading this article…

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GE Capital Bank Online Savings Account: I Was Declined

by Luke Landes
GE Capital Bank

This article started as a regular review of an online savings account. I’ve written many of these for Consumerism Commentary over the years, and I’ve always followed a similar process: I open a new account in my own name, naturally, I link the account to an existing account of mine, I transfer money into the ... Continue reading this article…

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PerkStreet’s Closing Signals Danger for Rewards Debit Cards

by Luke Landes
PerkStreet Closing

If you have been a customer of PerkStreet, you joined to take advantage of the company’s debit card rewards program, and had accrued rewards as of August 12, you just got screwed, to put it bluntly. PerkStreet is closing, the company canceled their rewards program, and the company will not be paying out any accumulated ... Continue reading this article…

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Capital One 360 Customer Service: Unsolved Issue With Customer’s Mortgage

by Luke Landes
Capital One 360

When Capital One purchased ING Direct and ultimately rebranded the bank as ” Capital One 360,” long-time customers of the online bank asked the same questions. Would Capital One continue ING Direct’s tradition of competitive rates and excellent customer service? Not everyone’s experience with ING Direct has been perfect, but overall, the bank was as ... Continue reading this article…

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Debit Card Swipe Fees Could Shrink, But Will Banks Punish Consumers?

by Luke Landes
Debit card swipe fees

It’s the lobby of retailers versus the lobby of retail banks. Retailers claimed a small victory recently when a U.S. District Court struck down a rule that capped debit card swipe fees at about $0.24 a transaction. The original cap proposed by the Federal Reserve was $0.12 but as the Federal Reserve operates more for ... Continue reading this article…

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Many Low-Income Families Can’t Use Mainstream Banking Even If They Wanted

by Luke Landes
Bank

I’ve written previously about many different reasons households, particularly those in locations where families typically have low incomes and those in areas where certain minorities constitute a majority of households, are more likely to take advantage of the high-cost alternative banking system including payday loans and check-cashing storefronts. For example, traditional banks find it difficult ... Continue reading this article…

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PNC Offers Videos and Interaction With Financial Advice

by Luke Landes
PNC Achievement Sessions

Last week, I criticized the McDonald’s corporation for producing a website and a toolkit, aimed at their employees, designed to help those employees tackle the financial obstacles they are most likely to face. My first point was that financial literacy education hasn’t been proven to help the most needy, and in some studies, has been ... Continue reading this article…

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Capital One 360 Independence Day Sale

by Luke Landes
Capital One 360 Account Overview

Capital One 360, the online bank formerly known as ING Direct, is offering special deals for new customers. I’m a long-time customer, and I opened my account when ING Direct was offering one of the best interest rates available among online savings accounts. The interest rate, like all interest rates, has shrunk over the course ... Continue reading this article…

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Prepaid Debit Cards Are Riskier Than Checking Accounts

by Luke Landes

Thanks to heavy marketing campaigns, including endorsements and partnerships with everyone from Russell Simmons to Kim Kardashian to Suze Orman (it’s hip! it’s popular! it’s financially smart!), use of prepaid debit cards has surged. Prepaid debit cards were once a fringe financial product. They were intended to be used by people who have a communal ... Continue reading this article…

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Damage Control: Taking an Unwarranted Vacation (From My Finances)

by Luke Landes
San Francisco

This week should have been a vacation. It has been, for the most part, but not entirely. While I’ve traveled occasionally over the past few years, and even chosen destinations meant for relaxation and time alone with loved ones, I haven’t had one of those fabled true vacations. My cell phone was still near by. ... Continue reading this article…

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Barclays Online Savings Review

by Luke Landes
Barclay's Online Savings Account Review

Barclays has enjoyed a long and storied history as a financial industry leader in the United Kingdom. While those of us in the United States often consider a financial company to be historied once it passes its centennial, Barclays was founded in 1690. As an organization, the bank is older than our country. The brand ... Continue reading this article…

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Capital One 360 Savings Account Review

by Luke Landes
Capital One 360 Logo

Capital One’s decision to acquire ING Direct was a great strategic move, but the deal had a few problems. Because ING Direct’s parent company, as part of a European bail-out agreement, was required to sell ING Direct in the United States and in other global locations, and to cease using the ING Direct name, Capital ... Continue reading this article…

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What Happens If Your Bank Account Is Hacked?

by Luke Landes
Robbery

McAfee Labs, a company that deals with internet security from malware and hackers, has announced that a ring of criminals intend to steal money from customers with accounts at major American banks. The operation even has a codename, “Project Blitzkreig,” and is rumored to go into effect this coming spring. The fact that this plan ... Continue reading this article…

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Citigroup Laying Off 11,000 Employees

by Luke Landes
citi-building

As part of a measure to cut ongoing expenses for the benefit of major shareholders, Citigroup has announced a massive reduction of employment, affecting over four percent of the company’s workforce across the world. The new CEO, Michael Corbat, has determined the best course of action to increase the value of the company for investors ... Continue reading this article…

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