moneyreallymatters.com

Last week, I started a blog series title Cry baby Cry sharing few real life stories to save/get back the dollars I truly deserve by my money management.  In the previous blog post, I wrote how I was able to get credit card financial charges refunded back to my account. This blog post, I am going to share an interesting story on how I got stuck in string of cross product sales during my hunt to find a good business banking service.

Bank Account -A Search for Free Business Banking

Large bank chains have a habit of throwing a small fly at you to lure you in for a big catch. They entice customers advertising free offers with free cash bonus. To be charged later with big account service fees and maintenance charges. Once you step inside their door, customer reps will try to sell products with all attractive free add-on services, valid only for limited period.  In my case, the bank was Bank of America(BOA) and add-on service was Payroll processing service. Here comes the story.

I needed  payroll processing service for my consulting company. As a bargain hunter, I was looking for an affordable service. Charges from many payroll servicers in the market,  start with minimum $20/month for just simple service. I felt $20 was bit on the higher side to process just my paycheck. 

At that time, I was referred by a CPA to check on BOA’s free payroll processing service. Obviously, thats was a good deal. I can save $20/month which is $240/year. So I decided to stopby at nearby BOA branch to check it out. After talking to the Customer Rep, I found out there are lot of strings attached to this free offer. First, I needed to start a business checking account in order to use their payroll processing service. (1st catch) That I expected.  It didn’t stop there. 

Payroll processing is only free if the salaires of company employees  get deposited dierctly to their BOA checking account. If the employees don’t have BOA checking account, they needed to open new one. That is practically impossible for any small business asking their employee to open new checking accounts. (2nd catch).  Since I don’t have any employees, they needed me to open a personal checking for myself in order to get the business checking free. (3rd catch) They went still further. I also need to make my paychecks direct deposited to my personal checking account. (4th catch). It was too many strings but  I am getting what I wanted except few new accounts to maintain than I realized. I signed up without any second thought, hoping to save some money.

What happened next?

Six months passed, I found out that I don’t need to process my payroll. I was doing it wrongly to start with. So I immediately stopped using BOA payroll service. As I soon as I stopped processing payroll and direct deposits to my checking account, BOA started charging $5 as account maintenance fee to my personal checking account from the next month. I visited the branch and asked, how can I maintain my business and personal checking accounts without payroll service. They said, I needed some form of direct deposit to my personal account to both accounts free. Otherwise the fee will be charged as per terms.

I am self employed for my own LLC, I don’t get any other income to direct deposit. I asked for any other option but they couldn’t find anything to suit my need. They didn’t want to lose me as a customer as well, so they gave me 3 months of fee waiver until new offers arrives at later time. I also got the fees for 2 months refunded to my account. After 3 months, they started charging again.  I called and talked to the same rep one more time. She found a different offer this time. That 2nd offer, I need to use my check card to make atleast one purchase a month. I don’t purchase regularly for my business. I can’t avail that offer. So she gave me 3 more months of fee waiver. I was living in the grace of the rep with just fee waivers and don’t like to call every 3months. Next time fee waiver elapsed, I just went ahead and closed the accounts to avoid future trouble.

No Free lunch

My CFP Certification course has taught me clearly, there is no concept of free lunch. There is always cost associated in making even the so called free lunch. It is not actually free even if they offer it free. Similarly, there is always an opportunity cost associated with any free service. You either pay for the service as fee upfront or pay by giving them business. You are keeping your money in their bank which is similar to lending your money. They are using your money for their business. Either way, they are winning. You better find the common ground to make the best of the situation to get something you wanted which is well worth your time.

I like to conclude with few lessons to learn from my story:

1. Avoid opting for offers with too many strings attached.  It will work only if your situation stays constant. That is not always the case in our ever changing lives. Always try to open accounts or signup  for services without too many obligations or limitations.

Happy and Careful Bargaining !!! More stories to come…