Some Good Banking Advice
Have you ever wondered why banks are so keen to make sure you’ve got a credit card as well as traditional transactions/savings accounts and the like?
Then there is insurance, they love selling customers that as well. The more products you have with them the better.
WARNING – be mindful of the old saying, ‘don’t have all your eggs in one basket’, it can have serious consequences for your financial management.
The banks refer to it as ‘ring-fencing’, the more variety of products you have with any given bank, the more likely it is you will think it is all too hard to move to another.
What’s it called when someone takes cash from your bank account without permission? Most would say it’s stealing, but banks call it ‘setting-off’.
This is a hidden danger for anyone with credit cards, loans or mortgages at the same bank where they save or have regular deposits like wages. Banks can, and do, use your money to repay overdue debts, which can cause financial hell. It’s very dangerous from a consumer point of view, of course, it’s in their fine print (credit terms), i.e. if you start to experience difficulties with your credit cards, they can and will take from your savings and the like.
What does the right to ‘set-off’ mean?
Most banks have the right to transfer funds from your bank or savings accounts to pay off other debts held with them, such as credit cards or loans. It’s known as the right to “‘set-off”, or to combine accounts.
It doesn’t happen to most people, but those struggling financially especially when their circumstances change must be wary and prepare.
Short Term Solution
Put your loans and credit at different financial institutions – this is vital. Also, if you’re a small business starting out, open your business accounts at a different bank to where your personal banking is kept. But be weary in business as well, the same sort of fine print applies, so perhaps forget the credit card that they will be grinning with joy to provide.
At Auckland Loans, all we do is personal loans, debt consolidation, holiday loans, wedding loans, home improvement loans etc. We are specialist loan providers and source funding from a range of quality suppliers to enable us to have exceptional rates. Talk to us about consolidating all your bank debt (loans and credit cards) into one easy to manage facility.
We only do loans
If you’re currently considering a personal loan or debt consolidation loan (perhaps in an effort to get away from the bank) – complete our application form to get started.
Whatever you need, we’re here to help – apply online and let’s see what we can do for you!