How do banks hide credit commissions?On January 19, 2020 by admin
Hard times have come for banks – fierce competition, low-interest rates, bank taxes and commission returns on loans repaid earlier, but despite this their income is not falling, and if so – to a small extent. How do they earn money? Of course, on hidden commissions! Everything for free (almost).
Personal accounts are free, as well as payment cards. It is also easy to always find an ATM from which the payment is not charged with a commission. In that case – where do banks earn us?
If someone is thinking about using a cash loan – they have to count the number of times that the loan will actually cost. It’s best to count it yourself because what the bank advisers say will not work out for 99%. The interest rate itself is a quarter of the total cost of the commitment.
Until recently, banks pressed “compulsory” insurance, today, fortunately, the law no longer allows it, so to earn again, the commission was turned up to 30%. Banks earn the most from cash loan commissions. Most customers do not count this – they are focused on installment in a range – e.g. they can pay USD 500, and in fact, USD 500 – USD 100 can be an additional cost. USD 100 times 60 months = USD 6,000.
Advisors in banks themselves, announcing a positive credit decision, do it in such a way that the client believes that a miracle has happened. The application barely passed but it succeeded. Customers will be pleased that they succeeded and will not complain.
Before we sign the loan agreement
Let’s ask about the installment amount and multiply it for the number of months for which we contract. The sum to be paid will come out to us. Let’s compare it with the amount we receive. Then you will know how much the loan will cost us.
- Overdraft on the account
Unless bank accounts are usually free, debit entry fees are charged. While the descent into several hundred dollars is free, the descent into several thousand (even from 1000 dollars) is already a revolving loan. It is not expensive in itself – a maximum of 10% per year, but banks are urging you to increase the descent limit to several thousand (just in case?). If we do not use it – we will not pay interest, but an annual fee of up to 4% of the total limit will do so.
- Paying abroad
Using a Polish payment card abroad is undoubtedly very convenient – we don’t have to worry about anything. However, the cost of a holiday trip may increase by USD 200-300. All this through a commission for converting a foreign transaction. This commission can reach up to 7% of the transaction amount. Watch out for payments in foreign stores. It turns out that banks can treat a transfer from a Polish currency account to another as a foreign transaction.