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— Eric Sanders
Stop me if you’ve heard this one – or are living it yourself.
Equifax Direct Marketing Systems “eliminated my job” – and those of 11 other employees – two weeks before Christmas 2003. I soon learned that the traditional note of “education required: B.S. in computer science or equivalent experience” in help-wanted ads, had lost its alternative. Since I had never acquired a college degree – ascending to a $65K position entirely through OJT and experience – I was suddenly unemployable, if I was still interested in programming IBM mainframes.
At that time, I was living in a house I had “bought” (in partnership with a bank) in 1999. I lost it. Once I lost that $65K per year, I couldn’t pay on the two mortgages (the second is a tale in itself), and then I couldn’t find a buyer who could pay what I owed. Foreclosure ensued.
My great good fortune consisted in being so welcome at my favorite neighbor-hood gun shop that they have let me sleep on an airbed in the back room.
In the rest of the forest, meanwhile, all my creditors have each been trying to consume my entire salary – yes, I finally found a job with benefits, $12 an hour, working the sales counter at that same gun shop. Short commute, anyone?
Now, my story has finally arrived at Chapter 7: no assets, a trainload of creditors – debt collectors, actually, at this point.
Have you heard anything about the new bankruptcy law? We are now required to undergo bankruptcy counseling (available online) – a process involving debt analysis, resource analysis, and budget development – at the end of which, we learn what avenues are open to us; and credit counseling (also available online), which is the real subject of this essay.
One of the main points the online counseling course makes is that savings – paying one’s self – is critical, and that Savings should be the first item in your budget after Income.
I just received my last check of the year and, since it was for $750, I decided to open a savings account with $75. I learned Comerica has a peculiar dedication to their Prime Directive.
Until I have $400 on account with them, I would be charged $5.50 per month. This is in addition to the interest they will make on my deposit. If I deposit $75 per check, I won’t attain the minimum balance until nearly four months have passed, losing $11 a month.
Were I silly enough to attempt any transactions by telephone – say, transferring funds into my checking account, for instance – I would only get four free telephone transactions per month; any others would cost me a buck apiece.
If I actually withdrew any funds completely, I could only do that six times per month, before being charged three dollars per additional withdrawal.
These $1 and $3 charges appear to be imposed regardless of the account balance.
Perhaps Comerica wants me to hit my minimum balance ASAP – and discourages any voluntary reductions in my balance accordingly.
On the other hand, maybe they just want my money – and to hell with any financial problems their Prime Directive aggravates.
Hm? Did I open the account?
Hah!
December 28th, 2006 at 12:44 pm
Well, banks are in business for the purpose of earning a profit. On the other hand, fees like that pretty much defeat the purpose of a savings account. I would suggest you look for a local credit union. Since credit unions are not-for-profit, they will typically be a much better deal than any bank.
December 28th, 2006 at 9:10 pm
Sorry to hear about your troubles. I can assure you that having the degree won’t help you much either.
As for the highway robbery thieving banks, you are better off using a credit union. Not so great hours and access, but at least they won’t keep charging you coming and going for every little thing.
Hope you managed to enjoy the holidays.
December 28th, 2006 at 11:06 pm
I am a BSEE and a few of us engineers noticed that many middle management people were BSEET degree holders.
We joked that the “T” stood for Turbo, as in fast track to management. The “T” really stood for technology, the BSEET being a two year technician degree.
When bad times came, the BSEE people made lateral moves to equivalent positions in other companies. The BSEET people were left to manage the sinking ship. As in your case, Eric, a lateral move was not forthcoming for them. Upper management seems to have hardwired “loyalty” into middle management by promoting over degree level, if not skill level.
Sorry to hear of your experience. It is probably more common than anyone would guess.
December 29th, 2006 at 2:36 pm
I would think that IBM Mainframers would be in demand. Nobody teaches that, anymore, but most major businesses over 20 years old are still primarily MVS shops. I thought that there was a projected shortage of such people, as folks retire, and none of the college kids do mainframes.
Have you tried Dice.com? They’re like monster.com only they specialize in Techies.
ShavenYak-I actually wrote a long tireade concerning Banks vs. Credit Unions, that I want to post on the UP Blog, but I am having technical difficulties.
Um…this is actually embarassing, being an IT guy…How do I start a new thread? When I click “blog,” I am shown other people’s threads that I can reply to, but cannot start a thread of my own (like I said, the Credit Union bit is a long one, and probably deserves its own thread). There has to be a link or button that I am missing, somewhere on the screen. I have dropped an inquiry to the webmaster, but do not have access to my E-mail at this very moment.
Eric, with the CU I currently belong to, the minimum to keep an account is $25.00. Oh yeah, no fees.
When the fees at a bank exceed the interest that they are paying you, then banking is an investment that pays negative interest. EVERYBODY MEMORIZE THAT PHRASE. The next time a bank tries a hard sell on you to sign up for an account, tell them that their account is an investment that earns negative interest, and that it impacts your bottom line unfavorably. They just HATE it when you beat them over the head with their own verbage.
December 31st, 2006 at 11:11 am
Are Credit Unions insured like banks are?
December 31st, 2006 at 10:37 pm
Jeanne,
See the following regarding credit union insurance.
http://www.ncua.gov/
January 1st, 2007 at 7:52 am
Many banks offer low cost checking accounts. They’re usually interest and fee free. Some restrictions apply like a limit on the number of checks written per month. So check around.
Yes, Credit Unions are a good alternative IF you qualify for membership. They’re no open to the general public. Deposits are insured by not to the level they are in a bank.
January 2nd, 2007 at 12:02 pm
Jeanne - Bank deposits are insured through an organization called the Federal Deposit Insurance Corporation (FDIC). Credit Union deposits are insured through an organization called the National Credit Union Share Insurance Fund (NCUSIF).
FDIC and NCUSIF essentially do the same thing - they’re just different organizations. One is for banks and the other is for Credit Unions. See http://www.ncua.gov/ShareInsurance/index.htm for more details.
If you review the above URL, note that the terminology is a little different from what you are used to. Savings accounts are referred to as “Shares” or “Share Accounts.”
January 2nd, 2007 at 6:08 pm
On the issue of banks, some employers have a relationship with a bank where the employees get “free” checking without any limits on transactions. Also, some banks provide free checking for new customers for the first year. Also, with shop around in other cities for banks that have account holder friendly practices.
For anyone thinking about Chapter 7, it is wise to consult your attorney about opening a new bank account.
January 3rd, 2007 at 11:49 pm
CU are insured by the feds. I love each and every Credit Union I have had membership to. I can’t say that of any bank except one that was regional and employee-owned.
I’d like to see more solutions to the problems or obstacles of corporate life. When I was “downsized” at my last job about 4 months ago, a lot of people mouthed “Union”. No one was in a powerful position to make the union happen. How do you start a union that has a reasonable chance of success? It seems much harder on the surface than an entrepeneurial business. Rank and file employees know they are going to get fired so they fear taking decisive action in their best interests. How does the average Jane or Joe fight back and win some measure of dignity without sacrificing a family income?
How does the mission of UP offer concrete real-world solution?
January 5th, 2007 at 10:34 am
Union organizing is best done before the loss of jobs. Over the last 30-40 years, private sector positions that are “unionized” has declined to practically nill. Growth can be seen in the public sector. In particular, SEIU has done an excellent job organizing workers in the public sector. Additionally, they have worked, as I understand it, to increase the number of private sector locals. I cannot recall whether they are the union trying to organize Wal-Mart employees in some areas.
I have “googled” organization efforts in a number of occupations and it is suprising in a delightful way to see traditionally “professional” occupations included in union locals specifically for them. For example, certain public sector attorneys are unionized. In fact, certain “administrative law judges” in Illinois, perhaps elsewhere, are also union members.
You might want to contact a union like SEIU or a national teachers union (AFT or NEA for example) to do what might be thought of as informational interviewing/research on how organizing is done. Unions generally want to educate people on labor history or organizing.
I think all of us are now rank and file workers, whether salaried, hourly, white, blue or no collar. I would love to see labor history as part of the curriculum in all public schools in the United States. Those who have yet to learn it should educate themselves immediately.