Tuesday, September 27, 2016

Shady Deal?

My Bank And Me

I am wondering about the trustworthiness of my bank. I have a credit card account that I use to buy things I feel I need at the moment.

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There are reasons why small loans like this work for me.

  • By the time I would have saved up for the item, it’s usefulness would be diminished by the time I could buy it.
  • Opportunities usually require immediate action and I can budget monthly payments.
  • Having the right tools for the the task that has presented itself is essential.
  • There is a limit to how much money a person retired on social security can have in savings before one loses benefits.

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From 1995 to 2014 I had the good fortune of a mentor and financial manager who trained me to be punctual and responsible with bills and loan payments. (She was a good piano player, too) She oversaw my finances and acted as a loan officer providing interest free loans, if I made a good case for the amount and repayment was always regular and on time.

When I became my own CFO, I opened a credit card account with the bank to provide the additional funds that are sometimes needed for expenses beyond rent and food. This is okay, though the annual percentage is obviously more than the 0% I had been accustomed to.

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So here I am, knowing exactly where I stand with my credit card debt. I pay a little more than the minimum monthly payment and the amount I owe gets smaller each month.

Offers associated with my bank appear now and then. They tell me I can  borrow money at lower interest to pay off high interest credit card balances. This raises warning flags in my mind.

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I ask myself the question; “Why would the bank encourage me to take a low interest loan to pay off my card when the bank is already making money on my monthly payments for the balance owed?” Why haven’t they been using that same low interest rate on the card?

If I were to take out another loan to pay the one I have budgeted for seems like some kind of shady business. I can’t get the idea out of my head that if I did this extra loan thing, I would somehow end up with more payments a month than I can afford.

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I don’t think this loan offer is out of the goodness of their heart. Thanks but no thanks.

Today’s Video;


The Loan Banker Rides A Gain