10 Things Your Bank Wont Tell You

SmartMoney's got 10 secrets that your bank doesn't want you to know. Click through our gallery to see them.

10 Things Your Bank Wont Tell You

1. "We're in survival mode."

Banks may still be a safe place to stash your cash, with the FDIC now insuring up to $250,000 per depositor. But after years of lending money to just about anyone with a pulse, the industry is paying a steep price. Losses on bad loans issued during the credit bubble could top $1.4 trillion, according to the International Monetary Fund. With their balance sheets in tatters and stock prices in the gutter, some of America's biggest banks have been forced to merge to survive.

10 Things Your Bank Wont Tell You

2. "Our fees will only go up."

Don't look now but punitive fees -- for overdrawing your account, say, or using a competitor's ATM -- are increasing. The average ATM service charge doubled between 1998 and 2007, and overdraft fees brought in $17.5 billion in revenue in 2006, up from $10.3 billion in 2004, according to the Center for Responsible Lending. Rubecca Hegarty, a married mother of three in Woodridge, Ill., says she often pays upwards of $100 a month in overdraft fees to Chase, since, like most banks, it changes the order of purchases so that large debts get paid first -- increasing the likelihood of incurring fees on smaller purchases.

10 Things Your Bank Wont Tell You

3. "We change our interest rates all the time."

Regardless of what your credit card agreement says, you can never be sure how much interest banks will charge you. For example, nearly all cards have a default rate -- as high as 30 percent -- which banks apply when you've done something wrong, usually after two late payments in 12 months. But some banks have cut that to one, says Curtis Arnold, founder of CardRatings.com. Banks can also change the terms of your agreement, raising rates when they like (though you can opt out and pay off the balance at the old rate as long as you never use the card again).

10 Things Your Bank Wont Tell You

4. "College campuses are a gold mine for us."

Students are the customers of the future, and banks are increasingly courting them, sometimes right on campus. More than 120 universities have cut deals with banks to issue student-ID cards that are also ATM and check cards. Schools can make millions from these deals, sometimes even taking a small cut of individual purchases.

10 Things Your Bank Wont Tell You

5. "In debt? The courts won't help."

Since the late 1990s, banks have been including mandatory arbitration agreements in their contracts for many of their products, including auto loans, checking accounts, home-equity loans, and credit cards. Such agreements prohibit you from suing and instead require you to use an arbitrator -- someone picked by the arbitration firm named in your credit card contract to hear the dispute and decide the outcome. While these clauses were originally designed to thwart class-action suits, the banks have also been using them for debt collection, says Paul Bland, an attorney with consumer-advocacy group Public Justice. There are even times when consumers, often victims of identity theft and unaware of the debt, aren't present when awards are handed down against them.

10 Things Your Bank Wont Tell You

6. "We're excited about your trip to Europe, too!"

It's not bad enough that the dollar is hovering near historic lows against most major currencies, but when you travel overseas, every transaction comes with big fees attached. Take out cash from an ATM in London, and you'll get hit with a foreign-transaction fee, plus a fee for using a competitor's ATM. All told, it can cost up to $7 just to withdraw $200. Credit card purchases aren't much better. Visa and MasterCard each charge 1 percent of the purchase for converting currency.

10 Things Your Bank Wont Tell You

7. "For all the fine print, we don't disclose very much."

Bank documents come loaded with small type, detailing terms and conditions. But good luck finding out exactly what you're signing up for when you open an account. In 2007 the Government Accountability Office (GAO) sent investigators to see how well banks explained their fees and other conditions to potential customers. Though banks are required by law to make this information available, the GAO found that one third of the branches it surveyed didn't provide the required information. Worse, more than half didn't have any fee information on their websites.

10 Things Your Bank Wont Tell You

8. "Your money might be better off elsewhere."

Banks offer lots of ways to earn interest on your money -- among them, simple savings, CDs, money-market accounts, and IRAs. But they don't always yield the best return. In early 2009, the average savings account, for example, was paying about 0.5 percent interest. But even in this low-interest-rate climate, you can do better -- 3 percent or more -- if you shop around. "It pays to be a free agent," says Bankrate.com's McBride. "There is tremendous disparity in the returns available."

10 Things Your Bank Wont Tell You

9. "When it comes to banks, smaller is sometimes better."

Banks have been consolidating like crazy over the past decade. In 1990 the top 10 banks controlled 25 percent of the market; by 2008 they controlled half. This gives customers of large banks vast networks of free ATMs and branches across the country. But it hasn't been entirely good for consumers, says Arthur E. Wilmarth, Jr., a professor at George Washington University Law School. Though big banks offer many conveniences, they can come at a price: high fees. In 2006 the 10 largest banks generated 54 percent of revenue from fees and service charges; by contrast, the 10 smallest banks generated just 28 percent from those sources.

10 Things Your Bank Wont Tell You