Editor's Note: This post is part of an ongoing series in which customers from different demographics describe what they are looking for from the financial firm they do business with.
I'm not rich. For much of my life I have been poor: as a child of undocumented immigrants, as a young adult in college, when I was starting out in the working world, and again years later, as a law student. Today, I make a good income, but I rarely have a lot of money for any amount of time. What I pay in student loans every month is what many families pay for rent in the San Francisco Bay area. I have the usual monthly bills rent, utilities, and my no-contract mobile phone bill. I buy groceries and clothes, pay co-pays and the occasional vet bill. I travel for work and often pay out of pocket, then have to wait for reimbursement day to get my money back. I am what some banks may call a "high-transaction, low-balance" customer.
But I also want, someday, to buy a new car, buy a small home, raise a child and help pay for that child's education. To do that, I will need financing over long periods of time. To get that financing, especially at an affordable cost, I need to maintain a strong financial history. I need more than a credit score. Essentially, I need a reputable financial institution to vouch for me via monthly statements showing that I only rarely bounce checks and that my savings have grown, and are likely to grow, over time.
Fortunately, my work as a financial services advocate has given me insight on exactly what to look for, including red flags. I know that some banks just don't want me. They make clear through their practices that their preference is to make money on corporate investments and consumer fees. It makes no difference to them that I am trying my hardest and am in a good position to be a long-term investment.
Any financial institution that claims to want my business but hard sells overdraft is also not for me. With the number of transactions flying through my account, and the different kinds of transactions, including checks, debit card purchases, electronic funds transfers and recurring automatic bill payments, I could (and several years ago, did) easily rack up a scary amount of fees. Even accounts with relatively less expensive overdraft fees, such as those offered by credit unions or those that withdraw money from a savings account rather than leaving me with a balance owed to the bank, would not work for me if I am pressured into opting into that "service", if the transactions are re-ordered to maximize the number of overdrafts or simply processed in an order that I can't predict.
Prepaid cards terrify me. Not only do their fee schedules overwhelm me and I was an econ major their absolute lack of legally required protections leaves me 100% insecure. I have, unfortunately, been the victim of theft twice in the last year. Both times, my cards were stolen and one thief bought himself a cell phone. Once while I was traveling, an ATM machine spit out $80 instead of the $100 that I attempted to withdraw. Because of laws that require all debit and credit cards to provide consumer protections, after each of these incidences, I was able to call my financial institutions, report the losses and get my money back. There is no guarantee I would have been able to do that if my cards had been prepaid cards.
Having been badly burned by banking relationships in the past, I now operate with an abundance of caution and have three accounts. One credit union account with low insufficient funds fees (just in case) from which all my bills are paid. Another "big bank" account that I get for free because I am fortunate enough to be able to do all of my banking electronically. This account does not allow overdraft for debit card transactions- even if I were to want it. I also have an internet-based account that pays interest on a transaction account and pays back any out-of-network ATM fees so I am never forced to pay up to $5 for a single ATM transaction.
These institutions want me. They give me good service (most of the time), help me avoid fees and help me save more money that much faster. Between them, I have records that I am in fact a good bet for anyone considering lending me money. When I am ready to commit to paying many thousands of dollars financing a home, a car or my kid's education, I will offer my business first to those institutions that helped get me there.
Andrea Luquetta is the policy advocate at the California Reinvestment Coalition, a nonprofit organization that advocates for fair and equal access to banking and other financial services for California's low-income communities and communities of color.