photo credit: Mariano Kamp

Borrowers may seem like the victims in the recent financial crisis, but low interest rates and higher FDIC premiums mean savers are paying for it.

Based on all the news of mortgage foreclosures and credit card defaults, you might think this is an especially tough time to be a borrower. Indeed, lending standards have gotten tougher, and many people have seen their credit card rates skyrocket. Still, the people I feel sorry for are not the borrowers, but the savers.

Let’s say you are one of the millions of Americans who do the right things with their money. You pay your bills and you’ve set aside some money in a savings or investment account. What do you get for your reward? CD rates that have never been lower.

This is no accident. Interest rates tend to fall during a recession, and of course, we have got more than your standard recession going here. Beyond that, though, the government has taken extraordinary steps to drive interest rates down. This is both to stimulate the economy and to bail out borrowers who are in over their heads.

To add insult to injury, higher FDIC deposit premiums are going to have to come from somewhere–you don’t think the banks are just going to eat them, do you? So that will be another quiet little chip out of your deposit interest rates. Never mind that no bank ever went broke because somebody deposited money into it!

Somehow, borrowers have gotten painted as the victims in all this, but when you think about it, the real victims are the savers. They didn’t contribute to the financial mess, but they paying to clean it up.

Now, if you are a saver–and I’m one of you as well–I can offer a couple pieces of good news before you start grinding your teeth too hard.

First of all, in order to get capital flowing again, banks need depositors, and some are offering interest rates well above the national averages in order to attract them. You just have to be a smart shopper and find the most competitive rates.

Second, the spate of deflation we’ve seen lately is good for savers. Falling prices mean that every dollar has more purchasing power. It also means those low interest rates are worth more than they seem. Better to have a 2% interest rate with prices declining by 1% a year, than a 5% interest rate when inflation is 4%. Now, history shows us that deflation is a very rare state of affairs, but enjoy it while it lasts–it means you may be wealthier than you think.

Richard Barrington is a freelance writer and novelist who previously spent over twenty years as an investment industry executive. He is the primary spokesperson for MoneyRates.com. He has written for over 50 financial Web sites, such as Investopedia, Yahoo, MSN, Allbusiness, and Encarta. Richard has been quoted by numerous media publications such as The New York Times, The Wall Street Journal, The Washington Post, SmartMoney.com and US News and World Report.

Yesterday I received an email stating that I’d just transferred $1649.00 to Lenovo.com.  I didn’t and immediately got off the phone with a client to call Paypal and then my bank.  Both stated they wouldn’t be able to help me until the pending authorization cleared or was terminated. It turns out the bank had been calling me all afternoon because the security team flagged the transaction.  I thought it had to do with my new debit card coming in the mail.  I was wrong.

I use a small credit union and 80% of the time I get the same person, Chris, when I call there.  When he picked up I felt like a huge sense of relief!  He offered me the option to block any charges from Paypal which would cost me $20 OR I could shut down the account and open a new one.  I was reluctant to do this because I have several ACH transactions coming out each week and it would’ve been a hassle to close the account and reset all of my bill pay accounts.  I would have been open to closing the account if really came down to it but my mom is still on this account.  I have had this account since college and she’s been on it ever since, I just never bothered to take her off.  Don’t worry she isn’t calling into the bank and snooping on our money LOL but I just never bothered to have her sign the papers and take her off.  And, if I wanted to close the account to thwart the thieves then I’d need to go to NY, have her sign it, get it notarized, do the same for my husband and I and then get the account closed.  So, that wasn’t going to happen, not with time passing and the authorization about to clear.

Talk about PISSED.

Paypal can’t stop the authorization before it clears and my bank at best could do some sort of ACH block to stop the payment from being taken from my account.  But they didn’t even see the authorization as pending on my account which made the situation even more frustrating.

I called Lenovo.com directly thinking this is my last resort because I was steaming hot pissy mad at this point.  After a few calls I got their customer service/billing department on the phone and reported what had happened.  The rep who handled the situation was really kind and understanding so I appreciate her empathizing because I was HOT!  She pulled up the order and said person ordered a SERVER and planned to have it shipped to TEXAS but using my contact and billing information.  She gave me the order info and customer number then transferred me to the department authorized to cancel the transaction.

The rep who ended up canceling the transaction had all these questions for me as if it was so damn impossible for someone’s Paypal account to get hacked.  Im like, dude STFU and cancel the transaction or I will have your company up on fraud charges once I sign this affidavidt.  Don’t play with my money.  I quoted and read from the several search results about Lenovo’s history of charging people for items they never ordered.  Save that $hit for someone who gives a f8ck and research it yourself.  Cancel the order, terminate the authorization and I will be on my merry way.

He did.

I called back late last night to confirm with another rep and said transaction had been canceled with the authorization terminated.

Still, I will be checking my account through Friday to make sure no random authorizations are placed and checking all transactions.  Since using Rudder I’ve been rather anal in checking my account daily to assign bills that have bee paid but I am lucky because my clients canceled yesterday and had they not I wouldn’t have noticed the email from Paypal until late last night.

Next steps?  Since I feel so open and vulnerable there’s no telling what other financial information these folks have on me since they logged into my Paypal account from Georgia per Paypal’s security team.  I’m thinking that I need to add the MyFico Credit alerts to my account and continue to check my bank account.  I also plan to call my bank and Paypal to see about fraud charges against the person in Texas and the person who logged into my account from Georgia.  The last thing anyone should do is mess with my money.  I am not the one.

What would your next steps be at this point?

Losing my debit card usually means a frantic call to my bank to have it replaced and then a planned trip to the branch to re-pin the code so that I don’t forget the one they send me.  Not this time around.

About three weeks ago the man went to the ATM to get cash to pay the housekeeper.  He came back, put the money on the night stand while I was asleep, but uhmm no debit card.  Long story but there are two cards for the same account, but he can’t use the ATM because he forgot the pin they sent him.  So he uses mine for cash withdrawals until he can get to the branch to re-pin his code.

Ok, so we realize that he left the card in the Wachovia branch ATM about 2 days later, go into the branch and the branch manager tells us that it’s there but she can’t give it back.  Fine, I knew this would be the case since this isnt the first time I’ve had an ATM machine eat my debit card.  But it’s actually not that bad.  This has been a blessing in disguise for the following reasons:

1.  I’m not able to make random cash withdrawals from the ATM.  We have only made trips to deposit money/checks.

2.  No haphazard trips to the grocery store and no eating out unless it’s with the cash we already have on hand.  I see my clients in different locations so I’ve been forced to bring lunch or run home in between appointments.  Without a debit card I’m not going to Starbucks, stopping at my gym’s cafe, health food store/Whole Foods to browse and any other random nonsense I used to do when bored until my next client appointment.

3.  No online shopping with the exception of sites that have Paypal.  That’s still the debil but I’ve been good.  No shopping.  It feels so good to say that!

4.  If I really really need something, I’ve had to and can call hubby to get it done over the phone or swing by his job to get the card from him.  And since that’s a pain in the arse, not having a card has really made me focus on my financial priorities rather than unscheduled issues that may come up.

Not having the debit card IN MY HAND has worked out wonderfully.

Ahh but yes one is on it’s way to my house because I don’t want to be without one for much longer LOL.  Still, this warrants a few changes which may help with increased financial awareness on my part.  You see, even though I write about personal finance here, I still struggle with certain aspects of it in my own life.  Im not here to pretend like it’s all rosey, it aint.  I still like to shop but the last three weeks have been an eye opener.  Ive been forced to really really determine what are priorities vs what can wait.  When looking over my purchases and category spending, random ATM withdrawals, eating out and online shopping tend to be our budget’s downfall.

So I’m toying with not carrying a debit card and only using cash for things like groceries and eating out.  We are in the final stretch of paying off close to $30k in consumer debt (post about that coming up) and we’ve really reigned in our spending.  Especially since finding Rudder but again, that’s another post.

What about you?  Have you had something that was seemingly a disaster turn out to be a blessing in disguise?

This is a guest post by wowOwow, via Divine Caroline.com