Banks are increasingly targeting poor consumers; consumer advocates say the main motivation for doing so is the extremely high fees that low-income customers generate.

Banks argue that they're helping the "unbanked," but the services they're using don't look very different from what the unbanked would otherwise use (payday loans, prepaid debit cards with high fees, etc).  In some cases, customers would benefit from the bank's simple checking account, but employees highlight more expensive products instead.

The New York Times describes how low-income consumers have become a hot commodity for banks. In a strange twist, banks seem to be moving in on payday lenders' territory: offering the same services, and even designing storefronts to look just like payday loan shops.

If you're looking for banking services, look beyond the pitches and advertisements you see -- they might not be the best products. Find out what all the options are at a bank before opening an account or getting a loan. Asking for more information (especially if you are a low-income consumer) may save you a lot of money. You can also improve your chances by working with banks and credit unions that are honest with you from the get-go.

[via TheFinancialBrand.com]

When you think of your credit, you probably assume that it's just about any loans that you've used. By now, you know that your job and income are not part of a credit score calculation.

However, the bills you pay (or don't pay) can find their way into your credit history and do major damage -- holding up a mortgage refinancing, or making it impossible to get a loan. Those bills may be anything from your share of medical care, parking tickets, and other small expenses that have slipped through the cracks.

If somebody thinks you owe money, they can have a debt collector come after you for the funds, and that can negatively affect your credit. Even medical bills of $200 can result in serious problems with your credit.

Make sure you know who you owe, and make sure everything gets closed out properly. It's worth your while to follow up and verify that you have zero balances, even though you shouldn't have to. Another approach is to check your credit reports regularly (especially before getting a large loan).

Further reading:

• Basics of Credit Scores

Card skimmers steal your information when you put your card into any device. Whether you're using an ATM or paying for gas at the pump, your card number is at risk.

Consumers have gotten better at identifying card skimmers. Unfortunately, scammers are making skimmers that are harder and harder to notice. Krebs on Security features pictures of an extremely small ATM skimmer that was found at a California bank.

The newest generation of skimmers can fit into a thin plate that mounts on the face of an ATM. In addition to reading your card, it will film you as you enter your PIN and store that information.

What can you do about these skimmers? Unless you're going to avoid using cards, you can take a few steps to reduce the likelihood of trouble:

• Look for signs of tampering or anything that doesn't match
• Cover your fingers as you enter your PIN
• Review your accounts regularly and look for unauthorized transactions

[via Consumerist]

Further reading:

• Skimming Scam Basics
• Getting a Student Loan Without a Cosigner

The universe of banking products continues to get more and more confusing. How can you choose which products and services are best?

One way to do it is to consider your behavior and your habits. Where are you in life and what do you need from a bank? Students and retirees have different needs, and they'll probably use different bank products.

MyBankTracker.com highlights four types of people and their typical banking habits. Based on those habits, they've even recommended specific products. Whether you use their recommendations or not, you may find it helpful to study who you are as a consumer and what companies are trying to do to meet your needs.

It makes sense to find products that are tailored to your situation. You've got enough to do every day -- don't rearrange your life just because your bank can't make things easy for you.