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If your bank is charging you for having a low balance, then you need to change banks. There's tons of banks and credit unions out there out there that don't have a minimum balance fee. Some banks won't even charge you for overdrafting. Stop being loyal to a company that goes out of its way to screw you over.
Don't use a bank for personal finance, period. Find a non-profit credit union. You'll have lower fees, better interest on loans and higher interest on savings, and better customer service from a financial institution that's not allowed to have shareholders mining you for profit.
Being able to afford to be poor (do a low paying job just because you prefer it) truly is a luxury.
When you are rich, you have a brokerage account and investments. When you are poor, you have a consumer bank account.
Is this just the modern version of the boots theory?
The Matthew effect states pretty much the same. It was coined in 1968 by sociologists Robert K. Merton and Harriet Zuckerman. It describes how initial advantages lead to further success, often summarized as "the rich get richer." It is named after a verse from the Gospel of Matthew: "For whosoever hath, to him shall be given" (Matthew 25:29).
This effect has been documented not only in the study of economic inequality, but also in other areas of society:
Science: Well-known scientists often receive more recognition and credit for their work compared to lesser-known researchers, even if their contributions are similar.
Education: Students who excel early in reading tend to continue succeeding academically, while those who struggle initially may fall further behind over time.
Sports: Athletes with early advantages, such physical maturity, often receive better coaching and opportunities, enhancing their skills more than their peers.
Music and Literature: Popular musicians and authors receive more promotion and sales, while emerging artists struggle for similar exposure.
I love that they included this illustration for those who are looking up socioeconomic theories but don't know what a boot looks like 😄
Sadly, yes.
I wish we could get people to stop voting for capitalists every two years.
Maybe if there were some other options we would. All my representatives have been the same for years and either run unopposed or the other option just sucked worse.
Yeah sadly third parties don't exist, we only know how to count up to 2!
I'm not talking about just the president. I don't see any third party candidates running for anything where I live. Don't act like I have a ton of good options when you know that's not true.
Idk I get interest but it just amounts to nothing because of how little money I have in the bank. No low amount charges in my bank though. For overcharging for sure but that's not surprising since I have only a debit card.
You are charged by not having access to the whole point of having a capitalist system. Your money has no chance of growing because you choose to "save and invest." But the reason you can't is because those with more capital have the power to not only decide your wages but they also decide what you spend on things to survive.
Its very much a mudhole that's harder to get out of the longer you're in it.
What is a low balance fee? I read an article that explained that American banks don't charge maintenance fees if your balance is over a certain amount. So it looks like free account maintenance for the rich, but not penalizing the poor.
Explain the difference..?
Maintaining a bank account is costly. That's why banks encourage customers to keep a certain amount of money in their accounts, which the banks can use for lending or investing, making a profit. Yes, this is greed, because US banks charge merchants 5-10 times more than EU banks, even though the maintenance fees are almost the same. Actually, I was wrong in my previous comment. "Rich" people don't get free account maintenance. They pay by lending their money to the bank. And in some cases, banks can earn much more than the $5-15 for low balance maintenance that poor people pay.
Yes. Now can you explain how it's not penalizing the poor? Like explain the difference between "giving a benefit only to the rich" and "punishing the poor"
Because I'm tired of people saying that this shit isn't fucking intentional.
The rich do not benefit at all. Banks make a profit by using money from the accounts of the rich. Charging a fee for a low account balance was only done to encourage customers to keep money in the account so that banks could profit from it.
Except for the $12 billion in overdraft fees alone per year. They don't benefit except for that, you mean, right? And the other fees related to low balance. And the fact that they use your own money to lobby against your rights..?
They don't benefit at all. Nope. Nuh uh.
The rich do not benefit at all.
They do benefit though - they gain liquidity. If they'd keep all their money in direct investments, they wouldn't be able to use it - so they have to keep some of it in a form they can utilize. Doing it in a bank account allows them to still get some revenue (not as much as an investment firm would give them, but still more than zero)
Both sides of an arrangement can benefit from it. I don't understand what this concept is so alien so some people, and I don't see the point of focusing on this aspect of the post instead of the more interesting one - they poor getting charged fees for not having enough money.
You made a point that the bank loses money on low balance accounts, which seems reasonable (the bank does enjoy the economy of scale, but there are still minimum costs for dealing with each customer as an individual) as long as you stress out that this is before the bank takes these fees.
So, the real questions is why should a poor person even have a bank account? The main purpose of a bank is to provide liquidity while still investing they money - but the poor don't have enough money to invest, and cash is just a liquid and doesn't incur low balance fees. Is there something systematic that forces them to use a system they only lose from?
US banks do not lend based on deposits. Loans are issued by the federal reserve and maintained by the issuing bank.
Another way this works is through interest payments.
I earn interest at the stock market, the Bank account one is very low.
Should try investing in the S&P
I'm sure the poor will get right on that, just as soon as you realize the point of this post is not for investment strategies