Wednesday, June 26, 2019

The Lies The Banks Tell You

Financial institutions have built a reputation of trust with their customers but not everything they say makes financial sense. Remember that they are primarily a business and their goal is to make money off of you. The following are some of the lies they may tell you in order to get a few extra dollars out of your pockets:
  • A House is An Asset - If you have a good credit score, it's possible that the bank will try to entice you to take out a better loan, than you originally intended, for the purchase of a house. They will tell you that a house is an asset; that it ultimately will make you money in the long run. This isn't true... An asset is something that put money in your pocket every month. A house is certainly not putting money in your pocket every month unless you rent it out.
  • You're Richer than You Think - No you're not! This used to be a motto for a Canadian bank and it's just plain false. Banks will usually tell you this so that you take some of your money to invest. While there's nothing wrong with investing in itself, you should never invest money that you need to live - only the money you can afford to loose.
  • Credit Score - The entire credit score system was created by the bank. it is a number that they put next to your name to determined how likely you are at repaying your debts. Your goal shouldn't be to raise that number but to get out of debt entirely. You won't have any issues getting a loan if you have money in the bank.
  • Insurance - Don't get me wrong, insurances are good to have but banks don't usually care whether or not you're already covered at your work or if you have insurances with other companies. Be sure to read the contact before signing it.
Remember that even though banks have our money, it doesn't mean that they have our best interests in mind. Be aware!

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