When did banks start wanting you to spend, not save?

First appeared in USA Today and The Indianapolis Star

This won’t come as a surprise, but the vast majority of advertisements were created to help you part with your money.

It’s an arrangement you’ve become both familiar and comfortable with since your very first paycheck. Your only job is to fight for your money harder than advertisers do, and if you accomplish that, you will see your bank balance grow instead of shrink. But what if the marketer trying to shrink your bank account is your bank? Then what?

I don’t exactly know when it happened, but banks seem to be much less interested in helping us accumulate money these days and much more interested in inducing us to spend money. I understand why, and I don’t exactly blame them for pursuing profitability, but if that’s the case, shouldn’t we stop viewing banks as our trusted financial partners.

If I were to write a help wanted ad for a trusted financial partner, it would go a little something like this: Trusted financial partner needed to help navigate all of life’s money challenges. This partner should hold me accountable to my debt elimination and asset accumulation goals, and encourage wise financial decision-making. Additionally, this position requires a keen gamification detector which will help prevent me from falling prey to decisions influenced by an arbitrary point system.

Well, at least they give us free suckers.

I visited the top five consumer banks’ websites, and with one exception, the primary focus was credit card sales. The exception of course was a bank unleashing a powerful public relations campaign to earn back trust lost when it opened millions of fraudulent accounts in its depositors' names.

You shouldn’t be surprised by this focus on credit cards because as a 2016 NerdWallet report points out, once you accept a credit card into your life, you are likely to join the throngs of Americans making up the average balance of over $16,000. In other words, the average credit card balance for people with at least one credit card is $16,748 while the average credit card balance for people who don’t have credit cards remains at $0. It’s no wonder why getting you hooked on credit cards gets top billing.

Would a trusted partner hook you on a financial tool via gamification for the purpose of racking-up swipe fees and interest payments? Er, probably not.

Not too long ago I made a gigantic savings withdrawal for a home improvement project I had been working towards for years. Everything was perfect. I saved the proper amount of money, hired the contractor, and then I withdrew the money to pay him. The account had about $200 left in it, and a month passed. When I received my next bank statement, I was both surprised and not surprised to see the “low balance” fee. Banks will tell you low balance fees are to help encourage people to grow their savings, but charging you fees because you don’t have enough money doesn’t seem like a great way to help you grow your savings. That’s like your gym not letting you exercise because you don’t exercise enough.

Think about that. When your net worth goes up via small savings deposits, a bank charges you a fee. But when your net worth goes down via consumer borrowing (credit cards), you’re rewarded by the bank. When my children do something I don’t want them to do, they get a timeout. When they exhibit behavior that I want to see, I reward them.

Despite what you've just read, I’m not anti-bank. However, banks hold financial influence over us, primarily because they have our money, and they’re using this influence to shrink our net worths, not grow them. That, I have a problem with.

I sincerely appreciate the services my banks provide to me. They allow me to pay my bills and vendors efficiently, they help arrange access to my cash at ATMs across the world, and they’re helping me purchase my home via my 15-year mortgage. But I ignore every bank advertisement I ever see or hear, because I want my net worth to increase, not decrease.

A trusted financial partner will help you increase your net worth. If your bank doesn’t do that, then there might be more suckers involved than you think.

Have a question for Pete the Planner? Email him at AskPete@petetheplanner.com or visit petetheplanner.com.