5 Things I Learned Working At A Bank for 3 Years
For the past 3 years, I have worked for a major Financial Institution in Toronto. I had just finished University, the most frugal time of my life and needed a job. My uncle encouraged me to respond to the posting that came up in my inbox. I did not actually apply for the position, bilingual agents are needed everywhere so I was approached on LinkedIn.
Fast forward, I am now a supervisor at the department. In these 3 years, I have seen a lot. Individuals who know the ins-and-outs of every aspect of the bank, young people just starting out with juggling credit cards and student loans, struggling parents who have lost their job, elderly people whose significant other; who did most of the banking, recently passed away and they’re left not knowing what to do. Some of the stories I have heard are heartbreaking. That is definitely a place I don’t want to be in, and I try best to help in every case I encounter, as well as hopefully in this post to share with others useful information about money and finances that I have learned over the years. Here are 5 things I learned working at a Bank.
1. Don’t Let The Bank Use You, Use The Bank
There are so many products that the Bank offers. Every type of chequing and savings account you can think of, credit cards with fees, insurances as well as perks/ rewards, small personal loans and so much more. With so many things to choose from its hard to know what is right for you. I know everyone doesn’t have the time to do the research for themselves so make it easy for yourself and step into a bank to talk to an advisor. Now, I’m not going to lie, there are agents who know more than others, which is why you should still do some research yourself. But really, take advantage of the offer's at your disposal such as:
Balance Account Transfers. This is a big one. I have conversations about BOATs every single day. They are amazing tools to help you save money while paying off your debt but a lot of people do not know how to use them to their benefit. BOATs allow you to shop around for the best interest rate for your existing credit card debt as a one time fee, then get 6-12 months interest-free! This can save you hundreds of dollars in interest fees. Just make sure not to use the credit card, pay at least the minimum on every statement and pay it off in full before the expiry date of your offer otherwise, you’ll be charged interest for the entire 6-12 months you’ve had the balance on your card.
See Should You Save Your Money In A Savings Account Or A TFSA?
2. How To Use And Manage Credit
From the moment you step on a campus ground, you are pushed to open a credit card. Most are targeted without even knowing what credit is and how to use it properly. Credit can be an amazing thing but it can also ruin your life if you do not use it wisely. I don’t mean to scare you but this is the truth. Essentially, credit is not cash. It is credit. It is a small personal loan made to you by the bank. If you do not pay it back within 30 days of your purchases, the bank charges you a whopping 19.99% interest on your outstanding balance. I can go into more detail but that would make this post longer than it already is.
I've spoken a lot about paying off your credit cards in full. This is most preferred but some people do not have that luxury and are swimming in debt. At the very least you should be paying your minimum statement balance. This keeps you in good standing and still helps you build your credit. In addition, you should be checking your account transactions, balances and statement due dates to ensure you’re not being overcharged, or becoming past due on your bills. This is how the bank makes money off of you. When you miss your due date you’re charged 19.99% interest on all your purchases on your account. It may not seem like a lot on a 100$ balance but if you have a $5000 balance on your credit card, 19% is a lot of money! Pay your credit cards off in full and avoid the fees and interest charges.
See Credit Cards: The basics
3. Good Debt vs Bad Debt
Debt isn’t something that anyone wants. But can there be instances when you want debt? Yes, there are. Remember when I talked about building a good credit score, you need history to do this. The only way to have this history is to have history. A phone bill is an example of good debt. You pay it every month when the bill comes around. A mortgage is a good debt for the same reason. A student loan isn’t necessarily considered “good debt” but if it’s the only thing you have your commitment to paying it off can still work for you, the same goes for credit cards. Just note, that creditors will usually ask you to get rid of these two before opening other products such as loans.
See What Is Credit?
4. Protect Yourself Against Fraud
I got my start in the bank working in the Fraud Management department so this is my home turf. I mentioned before that should you get sucked into any online scams, lose your card somewhere, so on and so forth, the bank can put in a claim for you to get your money back. Now nothing is guaranteed, especially when it comes to fraud with companies you’ve dealt with in the past, your card being used fraudulently by chip and pin, or Email Money Transfers (since this is basically cash money). So it is a good idea to practice preventative measures. Particularly for the older generation and students because they are the most vulnerable to online scams so if you have any grandparents or just parents that are not very tech-savvy, children with access to a card and some online games; be careful and monitor what they are buying online.
5. Making Financial Goals
Last but not least, make your financial goals. We have goals in every area of our life to become the best versions of ourselves. Exercise more, eat a well-balanced meal, sleep more, drink water, call your mom more, and enjoy life. Make a financial goal too. Most people want to attain financial freedom. You not only want to be able to buy what you want, when you want it but also have the luxury to buy it if you want to. In order to get there, you need to make some goals. Build a budget, and stick it. Save and let your money work for you. Whether you are saving for a vacation, saving for retirement, a wedding, planning for a family, paying off debt, a mortgage, or anything else under the sun, you’ll need to get a grip on your finances to do it.