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I pay my bills online. The interface for the bill paying system is a tragedy, as you might expect from a bank. But it's not entirely accidental. Banks inconvenience their customers for a reason.

For example, I would like the option of automatically debiting my checking account every month to pay off my credit card balance just before it is due. The system could easily send me a courtesy e-mail warning me the transfer was about to happen, in case I changed my mind. And if I didn't have enough money in my checking account, it could warn me by e-mail and abort the transfer. This system would save me time and avoid late fees on my credit card.

You won't be seeing that feature anytime soon. Banks and credit card companies make a lot of money from late fees. They have a naked interest in keeping their service as inconvenient as possible. My bank doesn't even offer a check box option for paying the entire balance on my credit card. Instead I need to write down the balance from one screen, or try to memorize it, until the screen appears where I can enter that figure. In other words, they even make money from my typos. It's totally intentional. Bastards. That trap has worked on me several times.

If consumers mattered, your bank would offer one retail product. It would be part checking account and part credit card. And by that I mean your balance could either be above zero or below zero at any given point. When your balance is below zero, you pay interest to the bank. When it is above zero, the bank pays you interest. You'd have one plastic card that does what your ATM and your credit card does now.

If you needed more credit, you could secure your account with your home equity. That way you wouldn't have multiple types of credit with the same bank, where the bank hopes you misplace at least one of their bills so they get the late fee.

Banks might argue that they can't offer that sort of product for regulatory reasons. But I haven't seen a bank shy away from trying to influence regulators when it works for them.

Did I say bastards yet?

(P.S. I started my career at a bank. And that's where Dilbert was born.)
 
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Oct 25, 2010
<a href="http://www.chinesebanker.com" rel="dofollow">Bank America</a>
 
 
Mar 8, 2010
Hey Scott,
i found this blog of a so called management consultant http://mukeshparthasarathy.wordpress.com/2009/04/22/strategic-job-creation-and-hiring/
epic stuff! take a look at the equations this guy has derived! i wanted to get the link across to you... hoping to see him guest star in one of your comic strips! funny as hell! peace.
 
 
0 Rank Up Rank Down
Jul 17, 2009
One benefit of Cheapatopia will be it's positive effect on the children.
See: article in yesterday's Science News
Neighborhood unity offers behavioral protection for poor kids
In deprived areas, youngsters’ misconduct declines when community members know one another well.

http://www.sciencenews.org/view/generic/id/45568/title/Neighborhood_unity_offers_behavioral_protection_for_poor_kids

IMHO Cheapotopia will only work as long as the population remains relatively small. My old history professor taught us that the larger the population of a society, the more rules are necessary to protect the citizens from one another.
 
 
Jul 15, 2009
Also, we have the facility of automatically moving cash from my regular account into a high-interest bearing fixed deposit leaving a fixed minimum amount in the regular account. The moment I draw beyond this amount, money is withdrawn from the fixed deposit in parts as well as the interest accrued on that amount...

Also, they don't charge money for using "more than three cheques a month on a savings account". Banking in the US is truly broken!
 
 
Jul 15, 2009
Too lazy to read beyond the first page of comments so I don't know if someone already said this.

My bank in India has the facility to set up auto-payment of credit card bills - part or complete. They notify you a week in advance that a bill is due and that it will be paid automatically on such and such a date. I have had this facility for over 2 years now. To top that, I can also set up standing instructions to pay my telephone, electricity and water bills on the credit card. The bills get delivered directly to the bank and then they process them for a trivial $3 a year. I guess the US consumer is truly voiceless in getting their corporations to do anything for them.

Oh and we have a fantastic cellular phone network too! :)
 
 
+2 Rank Up Rank Down
Jun 29, 2009
I will second the ING account. They behave like real people should behave. Interest to you on what's in there or you pay lower-than credit card interest if you go below.

One thing that's really dangerous are debit cards. If you forget about a big check with Bank of America and go into overdraft, they dock you $35. Now if you use your debit card to get a soda, that's another $35. You won't know until the end of the month, which is when they calculate all those debits. Instead of taking the small debits out before the big check, they make sure they milk you for every single transaction. And it's not chronological. They really take the largest debit first to make sure they get every $35 overdraft they can. My son got stuck with a $700 bill, and all for about $40 worth of debits. He negotiated the bastards down to $400. 1000% And it's more legal than loan sharks.

We really like ING. Accounts are easy to set up. We have several for different savings plans. One is for our heating fuel, propane. Those companies love to set up "easy" payment plans so you don't get stuck with a big bill in January, but they charge a premium per gallon for this. We make payments to our ING account and pay the reduced rate for quick payment. Plus, we (not the propane company) get the interest on what's in there.
 
 
Jun 29, 2009
I do have a debit card but I rarely use it unless I need to make a purchase to get Cash. New credit card users may have the problem with doing their monthly spending with cards. I learned the hard way, 15k credit card debt in my 20s and all paid off now. Lesson learned is to always make sure you can afford big purchases before you make them.

You can live without the items until you get the money saved. If its auto or home problem you should have had some savings to be able to afford it. You never want to have yourself in a situation where you cannot pay off the credit card each month. If you are then you should not use the creditcards. 2nd job might be the solution. I have 2 and even 3 jobs before if you count cleaning buildings. Cleaning buildings might not sound glamourous but at the time I figured it was paying me 25$ an hour... nothing to slouch at for mindless busy work.

Point is, if your disciplined and can save money.... learning to only spend what you can afford then life will be less stressful money wise. If your one of those who has to buy in order to show off or pretend your in a different lifestyle then your likely going to have lots of dissappointment.

Back to the subject of banks.... They want to make money and that means charging you. Should you keep your money under your mattress? No, play the game with their rules. When they make the rules to complicated or unconvenient then go find another bank with the rules you can understand and deal with. Thankfully theres some competition. I use a small credit union that has had the same employees working in the branch for 15 yrs. They know me by my first name. I can safely say I do not have to shop around for the best deal, they always have it.

Some credit unions are just banks in disquise, however I am sure there are some out there that are much better than banks.
 
 
Jun 29, 2009
They're just as useless this side of the Pond.
 
 
Jun 29, 2009
There are simple solutions to this that banks DO offer. I am a firm believer that banks are indeed bastards and are out to get us, but I must point out that they do offer solutions to exactly what you are talking about. I only know this information because I work as a bank teller for US Bank and would gladly tell this information to any of my customers.

You can have a checking account with a line of credit. When you overdraw your checking account it draws directly from your approved line of credit balance and deposits that amount into the checking account. The account numbers for the line of credit and checking accounts are the same, and an automatic payment can easily be set up to pay off a certain set amount.

Attached to said checking/line of credit a customer can have a VISA debit rewards card that functions both as a debit and a credit card and draws funds from the checking account. If the funds aren't in the checking, it draws from the line of credit. Oh, did I mention rewards? So while you charge money from your checking and possibly draw on the line of credit you can earn rewards on the charges so the interest doesn't hurt so much.

Also, if the line of credit amount isn't enough there is such thing as a Home Equity Line of Credit (commonly called a HELOC account). The HELOC fulfills exactly the purpose you said you wanted: it secures the account with your home equity.

These products do exist and are available to the concerned consumer. So either two options now exist to you: (A) you just need to ask the right questions (about a line-of-credit being attached to your checking and a VISA or Mastercard Debit card to go along with it), or (B) change banks to a bank that does have it.

Even though these products are available, banks are out to get the consumer and bank fees are outrageous at your average bank. Hope this helped.
 
 
+1 Rank Up Rank Down
Jun 29, 2009
In the UK we have such an account. In fact it goes one better, as it also includes your mortgage, so any money you have in your account reduces your mortgage balance and hence the interest paid. Basically, it's one fat overdraft, where you can put money in and pay it out, with interest charged at mortgage rates. As long as you don't borrow more than X% of the value of your house (not sure what the limit is), and pay off your debt by the time you retire, you can play the account any way you want.

Really, the only catch is that the interest rate is not the absolute best deal on the market. But it's far from the worst.

The account was introduced by Virgin, but now is run by the Royal Bank of Scotland. Who recently were bought up by the govt. to avoid going bust. But I'm sure that's just co-incidence...

What amazes me is that this was introduced over a decade ago, but hasn't taken off, and no-one else has introduced a copy-cat product. So clearly it didn't appeal to that many people. Although there are a number of "offset mortgages" (do you get these in the US), where your mortgage, savings, and current ("checking") account are linked, and you pay interest on the combined value of them, so they kind of achieve a similar thing except your money/debts are divided into several pots rather than one big pot.
 
 
Jun 28, 2009
I have a better solution.. no credit cards.. ergo no problem with late fees.. ever.
 
 
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Jun 28, 2009
I set up an auto payment of $50/mo so I never have to pay late fee. I still manually pay the remaining balance but at least I will never miss a required payment.
 
 
Jun 28, 2009
ING Direct has a checking account called "Electric Orange", which pays interest on any balance on the account, and charges you interest on any negative balance.
 
 
+3 Rank Up Rank Down
Jun 27, 2009
Come on, the debit/credit account was already done by a bank in my third-world country.

Unsurprisingly, they discontinued the product as soon as Citigroup aquired them.
 
 
Jun 27, 2009
There's a blog (http://thedailywtf.com/) which tells true stories of how these bad interfaces come to happen. It's mostly incompetent developers combined with bad management. You should know, Scott. You also tell these stories every day in your comics.
 
 
-1 Rank Up Rank Down
Jun 27, 2009
I had to comment on this one. I'm not a huge fan of banks generally, but I don't think they're all out to screw us.

I have automatic payments set up on my Bank of America credit card so that before my payment is due, it always debits the minimum payment from my checking account. This could be improved a little, seeing as anytime I make a payment in full prior to that date, it still takes out whatever that minimum for the month was. But big deal. I know to expect it and having a slight credit on my account doesn't hurt anything.

Then there's also my Discover account. There's still an automatic payment option, but it's a fixed amount rather than simply paying the minimum. That's not a problem since the payment is set to about 2% of the maximum credit available, so it's never below the minimum. Plus, it's smart enough to not take out that money if the card is already fully paid off.

Both cards have some kind of rewards program, and I've used both without any problem. My interest rate on the Discover is tied to the prime rate, so right now it's a fantastic 6.99. The BofA is higher, at 9.99, but it's fixed, so when the prime rate eventually rises, the rate will remain unchanged.

I don't think my bank hates me. To them I'm just a steady customer with good credit. The bank doesn't make much off me, but they seem to be content with what they get. If your bank hates you, maybe you should find a new one. And if they all hate you, well, maybe you're just not a very likable person.
 
 
+1 Rank Up Rank Down
Jun 27, 2009
You need to open the Bank of Dilbert...except 'accidentally' print it Dogbert, and cash in on the many induhviduals who don't know the difference. Adopt the exact same policies as your current First Bastard Bank.
Hey, the customers already being done over by their current banks, so why shouldn't you get on the gravy train?
 
 
+1 Rank Up Rank Down
Jun 27, 2009
"Interestingly, Virgin Money did once have a product similar to this, which was a combined mortgage, credit card and bank account that all got totaled together and you only paid interest on the remainder. Sadly it didn't really take off."

Yeah - offset mortgages are available - any broker can find them for you.

They're not entirely popular because you need your current account, savings account and mortgage with the same bank, and:
1 You get stuffed on on interest rates
2 If they go under, you won't see your savings again - they're ralanced off against your mortgage
3 You need about £10k in savings before they stack up financially, which frankly most people don't have to hand.

Personally I love the concept though.
 
 
Jun 27, 2009
Here in the UK, the bank I am with just got steered into a real unholy mess by an exec who then left and took a massive payout and pension. His replacement vowed to end the corporate gravy train and then took a 6.9 million pound payout to start the job. I am changing my bank.
 
 
0 Rank Up Rank Down
Jun 27, 2009
Re the credit secured against your house - I have an offset morgage (with a card) which effectively does just that. They're the norm in Australia but seem very rare in the UK - I had to search for ages to find mine. Are they not available in the US?
 
 
 
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