1.) Banks earn more money than the money you deposited or invested with them.
I know you’re earning interest from the money that you’ve deposited in the bank. Let’s say, you have a savings account or a time deposit account and it earns 0.5% or 2% interest rate. If the bank lends that money to a businessman and he is charged with 6% interest rate, the bank earns 4% (twice as much as you earn) and gives the 2% to you.
2.) Banks find ways to substitute money because they don’t make or print money.
Aren’t you aware that credit cards, checks, passbook or CD (certificate of deposit), paper notes, points system from cards are substitute of real money? They are artificial money to create more debts to the people and more money to the banks. Only the government creates or prints money.
3.) Bankers are more sales-oriented than customer-service oriented.
Personal bankers care more of their sales performance. They are more likely salespeople selling financial products. They rely mostly on commission every time they make a sale such as new accounts, more credit card applications, new home loans, new time deposit applications or new investments. Whenever you have investment with the bank and approach your banker because you noticed that your investment account value decrease so much, the banker will just say "that’s the market, it will go down or up”. Unworried with your money, he will wear a poker face and his words will focus on motivating you to continue investing with them. And he will never stop selling you their investment products. That’s how they keep up with their job.
4.) Losses of bad loans.
Due to financial crisis or irresponsible money management of bank borrowers, the bank suffers unpaid loans. This resulted to some of the biggest banks to merge in order to survive from bad loans.
5.) Where exactly they invested the money that you entrust with them (mutual funds or investment insurance).
You’re unaware of how banks diversify and invested your hard-earned money. Majority of them won’t tell what companies or brokerage did they invested the money. Fund managers play the game of numbers and they won’t mind so much if your money suffers losses. Thus, you will be surprised later why does your money crunched down from 1 million to 500,000 or worst to zero balance.
6.) You are unsure how much interest that the bank will charge in your credit card.
Like it or not, banks can suddenly increase interest rates in your credit card anytime. It’s in their terms of agreement. That’s why beware of big interest rates.
7.) Banks are negotiating the schools and universities to issue student ATM card or credit cards.
Schools can earn money from every student’s purchases using the said cards. Thus, schools are becoming goldmines from the eyes of the bankers.
8.) Instant loss of benefits in your credit card.
When you apply for a credit card, some banks offer extra benefits such as 6% discount on your travel or a lifetime warranty. Some banks never give notices to their credit card clients of the disappearing benefits.
Basically, banks don't necessarily protect your interest, it's their own interest they protect. If you're having a problem negotiating with one bank, why not try another bank?
Now you know some secrets banks won’t tell you, you have now a better decision-making in entrusting your money to the banks.