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Myths About Online Banking

There are some common myths I have across over the years. People have either been brainwashed to via the media or a friend's misinterpretation of the media. At least that's what I find.

1. Online banking increases your risk of identity theft or credit card fraud.

James Van Dyke, a research analyst for Javelin Strategy and Research, prove this to be wrong. We found that paying bills or banking online actually reduce your risk by 18%. He also found that people that pay bills online saved on average $1100 in checks and postage.

To tackle the identity theft, if you are careless offline and/or online these days, you open yourself up to identity theft. Identity theft is a big business. As long as there is money in it for the criminals, they will keep doing it. Identity theft has been around for years, it's just getting more media coverage these years because people are being careless with their personal information via another medium; the Internet.

Let say someone called you on the phone and acted like they were a representative of your bank. If they asked you for the secret password to your bank account, would you give it to them? Off course not! But, in the online world that's exactly what people are doing. If you follow the same common sense with the Internet as you do with the phone, you should have no problems.

2. Online Banks Are Not Real Banks, They Can Fold At Anytime.

I've heard this one 6 or 7 times just in the past year. This is more of an old school way of thought. People are holding onto bubble bursting and not looking at the facts. You're more prevalent online banks are huge international banks with large sums of money at their disposal and a great deal of history and clout to boot. On top of reputation, most of all online banks offer FDIC insurance. Online banks are here to stay. Common sense tells us that if the huge difference in interest rate continues online savings accounts will be a substantial portion of the savings account market.


3. Online banks are difficult to use. I don't want to mess up and accidentally lose money.

Fear of technology is always there. From my experience the vast majority of online banks have realized this KISS method (keep it simple stupid). America Online originally built their business on this principle. It is the clear reason their business was so successful. Online banks have taken notice and have adjusted their systems to make him as user friendly as possible. I have yet to run into an online bank's system that would require greater than a third grade education to use it efficiently. Almost every online bank I know all offers telephone support. If you really make a mistake, you just have to pick up the phone.


4. Receiving an electronic statement online is a bad thing.

If you receive your statement online, this is the easiest and quickest way to keep merchants honest. It is also a huge help to protect yourself from theft or fraud. You instantly know something is not right. It doesn't take 35 days to find out you didn't authorize a transaction.

Bottom Line:

If you're still keeping your money and traditional savings accounts, you really should open your eyes. Every minute you waste your money is money you could gaining in online savings accounts.

Larry Gittens
The physical bank is quickly becoming a thing of the past. In a few decades all banking will be done online and soon people will forget that physical banks ever existed. I will miss those air powered tubes but that’s about it.
Larry Gittens at at 10:07PM, 2012/02/12.

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