These days, savvy customers are growing
more aware of the many ways their banks cheat them. Business banking
customers need to be especially wary of the potential for abuse.
It’s reasonable to be concerned about
how your financial institutions treat you. Being proactive about where
you keep your money and what kinds of agreements you enter into will
help you get the most from your efforts in the business world.
One way small business owners are
retaking control over their money is by seeking innovative ways to get
the loans they need to grow their companies.
According to www.advancefundsnetwork.com, here are some of the biggest ways banks cheat their customers to maximise profits:
(1) Account maintenance fees
Banks have since replaced Commission on
Turnover with the account maintenance fee. Although many banks charge
maintenance fees, most will waive these fees if your business account
balance remains above a certain amount. Ideally, choose an account with
no fees. If fees are unavoidable, maintain the minimum balance.
(2) ATM withdrawal fees
While it is true that banks incur fees
when customers access Automatic Teller Machines outside their network,
these charges are often exaggerated as a means of profit-taking. The
Central Bank of Nigeria has reached an agreement with the banks to
charge N65 after the fourth ATM withdrawal from other banks’ machine
each month as ATM fee. Reduce the fees you pay by ensuring your bank has
a substantial ATM presence in your area of operation.
(3) Overdraft fees
Overdraft fees are among the most
typical ways banks profit from accountholders. Make sure your bank
offers protection from occasional overdrafts. At the least, banks should
offer email or text alerts if account balance gets low. Interest rate
on overdraft should be reduced drastically.
(4) Wire transfers
Except under the most unusual
circumstances, money transferred by wire should be available instantly.
Long delays are caused by institutional policies, not technical
limitations. Before opening an account, contact your prospective bank to
ensure that transfers will be deposited promptly.
(5) Credit cards with variable rates
Entrepreneurs and small business owners
are frequently targeted using credit cards with initial low rates that
can make balances balloon in the future. Your annual percentage rate
with such a card will frequently go up sharply after the first year.
(6) Business credit cards with annual fees
While cards with annual fees are a
common way to help consumers build credit, business credit cards should
never have these fees. Be alert, since such fees are typically charged
only once a year and can slide under the radar if you are not careful.
(7) Business credit cards with deceptive rewards
Credit cards are becoming more popular
in Nigeria by the day. Banks sometimes want business credit cards to
come bundled with a package of rewards. Understand, however, that the
exchange rate between the naira spent and rewards gained is usually
kobofractions on the naira. Rewards can be used to dress up an
unfavourable offer.
(8) Aggressive marketing practices for business customers
Many banks maintain commercial
partnerships with a network of businesses around the country. Examine
your account and credit card agreements carefully to ensure you can
limit the extent to which your information is provided to these
companies. You should also be able to opt out of “partner” advertising.
(9) Business loan repayment fees
If you pursue a business loan from your
bank, be aware that paying promptly can cost you. When arranging
medium-term loans, many banks will tack on fees for paying off the loan
before the anticipated end date. The manoeuvre is solely to protect
banks’ bottom line.
(10) Limited access to crucial information
Business owners have strict requirements
when it comes to tax reporting. These demands can become highly
inconvenient when your bank only provides a year’s worth of statements.
Most banks charge extra for accessing older information and grant such
requests at their leisure.
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