"The Card Game" could have done with less shopping spree b-roll footage and more down-to-earth advice

PBS FRONTLINE has released a new documentary, The Card Game, that takes an interesting though none-too-cheery look at banking fees – specifically credit, debit, payday loan and overdraft fees. The film is one hour in length and can be viewed free online here.

For financial buffs, the documentary is an intriguing look into the unsavory practices of the industry, however, it doesn’t offer much in the way of practical advice for consumers, instead portraying the banking world as a bleak, hopeless landscape where everyone is roundly cheated and defrauded. Those of us who have been around the personal finance blogosphere know a little better.

With respect to FRONTLINE’s work, here are four criticisms I have on how the film could have done more to educate about banking and personal finance.

The film holds no punches in going after banks with bad practices, but makes zero mention of the ones with good practices. Discussion of good banks may have been outside the scope of the documentary, but it would have been nice for some people to know the great alternatives that exist to the abuses shown in the film. For example, ING Direct offers a low APR credit line on their checking account that can kick in to prevent overdraft fees. Also, Lending Club offers low APR personal loans to qualified borrowers that can be used to pay off more expensive credit card debt.

Only two brief examples of credit card refinancing are given in the film, and neither is particularly positive: taking equity out of a home and using payday loans. Personal loans or balance transfers are never mentioned. This is an unfortunate omission because the film frequently implies that the credit card industry is “trapping” debtors under high interest rates. This is not necessarily the case so long as cheaper refinancing options are available.

The film portrays the banking industry as making “those who can least afford it pay the most” when it is actually very possible for the poor to pay nothing and still receive generous banking services. I, myself, earn less than the average U.S. wage and yet I’ve never paid a credit card finance fee in my life, and I’ve received much in the way of cash back, mileage rewards, 0% financing and other benefits. I may be “poor,” but because of a well-maintained credit score, a careful choice of banking products, and responsible account management, banks pay me money, not vice versa.

The film gives generous mention to the massive profits credit card companies made from customers during the height of the financial bubble, but it mostly glosses over the huge losses that they have recently suffered. By definition, these losses have subsidized consumers, either through credit card rewards, low- or no-interest balances, or purchases that were simply never repaid. The most profound example of this was probably American Express paying customers $300 to close their accounts. This doesn’t forgive previous bad practices, but it’s an important part of the credit card “story” that should have been included in the film.

While The Card Game, like most of FRONTLINE’s productions, is a good work of muckraking journalism, the film itself doesn’t do a whole lot to empower the individual in the realm of personal finance. Thankfully, the film’s companion webpage does have a section offering some practical financial tips for consumers.

What do you think? Should FRONTLINE have given a more nuanced view of the banking industry, or does banking as a whole deserve the hefty criticism this documentary doled out?

However, I believe that different bank accounts also have different emotional costs – specifically the worry that should something go wrong, you will have to pay for it in dollars, either as a fee or some other loss.

For online banking (which I use exclusively), I feel that the design and information present in a bank’s website is the biggest determiner of the emotional costs of banking. Though my online money market account with Capital One is a good overall product, the cluttered, humorless feel of their website keeps a small worry in the back of my mind that a minor slipup on my part could see me slapped with a fee.

By comparison, the fun, streamlined feel of the ING Direct website is much more calming to me. Though the actual terms of my accounts with them don’t differ much from Capital One, I feel that I worry much less about something going wrong there than I do with Capital One. There’s isn’t much rational reason for this – ING’s website just seems to convey the sense that they’re not trying to trick me into making a mistake for the sake of hitting me with a fee.

Though I don’t have accounts with them, I’ve also been impressed by some parts of both Ally Bank and Schwab Banking’s websites. Ally Bank’s very fun-looking, web 2.0 homepage goes out of the way to point out that they have “no sneaky disclaimers,” and their individual product pages make most of the terms fairly clear. Over at Schwab, I was impressed to see that the FAQs for their online checking account have a “What’s the catch?” item that lays out the terms quite well. Though not a banking service, the peer-to-peer lending service Lending Club also offer a very low stress user experience.

What I’d really like to see from a bank, however, is a prominent list of “All possible account fees.” It’s rarely obvious from the documentation included with these accounts what happens if you make a transfer for more than the balance of an account or commit some other minor snafu. Having a list of every possible fee one could receive – as well as the situations that will never result in a fee – would contribute enormously to dispelling the emotional cost of an account and contributing to peace of mind.

I hope some banking decision maker somewhere is reading this, because I’ll be first in line to endorse whichever bank adds this kind of feature to an already solid banking product.

Does anyone else out there in personal finance land feel this way as well?