As we all know, the banking industry is simply there to make money from the likes of you and I. They do this by playing on fears and half-truths that, whilst not propagated by the banks, are definitely left uncorrected.
Here are what I believe to be the top 5 Things your bank manager does not want you to know:
1. You do NOT need a good credit rating.
Credit ratings are simply there in order to allow you to borrow more money. Ironically, the banks perpetuate the idea that in order to get anywhere in life you need to build a good credit rating. In order to do this you need to borrow money. When you do this, the banks profit. Your credit rating increases and you are then allowed to borrow more money. And the banks profit more. “But I need a good credit rating to get a mortgage!” Not true – you simply need to be able to prove you can afford the mortgage payments. Evidence of employment, salary, banking history and so on will make this more than possible. You may have to fill out a couple of extra forms, but its a small price to pay for remaining debt free!
2. You do NOT need a Credit Card “just for emergencies”.
However they are sold, credit cards are bad news. They encourage spending and discourage saving and ultimately lead to being trapped in debt. Instead of getting a credit card to pay for emergencies, why not set up an emergency fund from which you pay for any emergencies? That way you will never owe the banks anything.
3. You do NOT need to pay extra for premium banking services.
“Only” £10 a month will get you travel insurance, or phone insurance, or a guaranteed overdraft, but is £120 a year too much to pay for these things? Most home insurance will cover mobile phone damage. Unless you are travelling abroad for more than one or two holidays a year then it would be cheaper to buy insurance as and when you are going. And as we already know, overdrafts are a no no. So, £120 for some unwanted benefits is not ideal, but it does make the banks more money…
4. You do NOT need a loan for a car, a holiday or anything else.
Deferred gratification is a skill worth having as it will keep you out of debt and free from the chains the banks are desperate to put you in. Learn to save. Instead of making debt repayments, make purchase prepayments. Set yourself up a savings account, workout how much you could afford to pay every month towards the car or holiday of your dreams, and rather than having to pay for it for 3, 4, 5 or more years, you could probably prepay for it in two and never owe anything to the bank. Sounds ideal to me.
5. You do NOT need an overdraft facility.
If you are budgeting correctly and have good control of your finances, then having an overdraft facility is just an excuse to put more money in the banks coffers. The banks have enough of your money. It’s time to stop giving them your money in the form of overdraft interest charges and start making them work for you. Save. Keep an Emergency fund and make sure that you never need to borrow money again.
Remember: the Banks are there simply to make money from you. Do not let them get away with it. It’s time for you to make money from them!
If you would like to know more about managing your finances and would like to get out of debt quicker than you thought possible, then check out my book; The 21 Day Debt Revolution and start changing your life today.