How Banks Keep the Working Class in Debt—and What We Can Do About It

As someone who’s spent years advocating for the working people, I’ve seen how the financial system often stacks the deck against everyday people. Banks, in particular, play a central role in this dynamic, and their practices deserve a hard look. They present themselves as friendly allies, with slick ads promising to help us navigate life’s challenges. But I believe their true purpose is far less benevolent: to keep us trapped in debt, squeezing every penny they can from hardworking folks. Let’s break down the three core functions of banks—bookkeeping, borrowing, and lending—and see how they work against us, not for us.

First, banks handle bookkeeping, the nuts and bolts of managing our money. When I deposit my paycheck or pay a bill, the bank records it, updating my account balance and transferring funds where I direct them. It’s a straightforward process, but let’s be clear: this isn’t some grand service they’re doing out of kindness. Bookkeeping is routine, increasingly automated, and—here’s the kicker—partly done by us through online banking. I’m essentially doing their work for them when I log in to check my balance or transfer money. Artificial intelligence is making this even more automated, cutting their costs further. Yet, banks don’t exactly pass those savings on to us. Bookkeeping is vital, sure, but it’s not where they make their fortunes. It’s a low-cost operation that keeps the system running, allowing them to focus on their real money-maker: debt. For the working class, this means we’re reliant on a system that uses our labor—our transactions—to grease the wheels of their profit machine.

Next, banks borrow money from us. When I deposit money into my savings or checking account, I’m not just storing it there; I’m lending it to the bank. That cash becomes their property, and they owe me a debt. It’s a strange setup when you think about it—I’m trusting them with my hard-earned money, and they’re the ones who get to use it. They hold these deposits as capital, a buffer in case there’s a “run” on the bank, where depositors demand their money back. But here’s the reality: bank runs are rare. In the UK, for example, the last major one was Northern Rock in 2007, and even then, the government stepped in to guarantee deposits up to £85,000. In the U.S., we have similar protections through the FDIC, insuring deposits up to $250,000. Because of these safeguards, banks face little risk of a panic, so they pay us peanuts in interest on our savings. I’ve seen my savings account earn a fraction of a percent, while inflation eats away at its value. For working-class families, this means our money isn’t growing; it’s stagnating, while banks use our deposits to fuel their operations, offering us crumbs in return.

Finally, and most crucially, banks lend money—and this is where they rake in their profits. When I take out a loan, whether it’s a mortgage, car loan, or credit card balance, the bank isn’t lending someone else’s deposits. Instead, they create new money out of thin air. It’s a shocking truth: they simply type numbers into a computer, marking up my loan account with, say, $10,000 and crediting my checking account with the same amount. One’s a debt I owe, the other’s money I can spend, but it balances out to zero on their books. This process costs them almost nothing—just a few minutes of an employee’s time. Yet, they charge us hefty interest, often far above the Federal Reserve’s base rate, plus “risk fees” to cover potential defaults. Credit card rates can be seven or eight times the base rate, hitting working-class borrowers the hardest. I’ve seen people crushed under these rates, paying thousands in interest for loans that cost the bank pennies to create. This is their core business, and it thrives on keeping us in debt. If we paid off my loans early or avoided borrowing altogether, their profits would dry up. They need us—and millions like us—to stay indebted to keep their trillion-dollar industry humming.

This setup isn’t an accident; it’s by design. Banks aren’t cuddly institutions here to solve our financial problems. Their goal is to keep us in debt for as long as possible, ideally for life. Mortgages now stretch over decades, car loans drag on for years, and credit card balances linger with minimum payments that barely dent the principal. The term “mortgage” itself comes from words meaning “death grip,” and that’s no coincidence. It’s a lifelong burden for many working-class families, tying us to payments that eat up our income. Banks back this up with relentless advertising, pushing us to buy things we can’t afford—new cars, bigger homes, the latest gadgets—knowing we’ll turn to their loans to make it happen. I’ve watched coworkers fall into this trap, lured by the promise of a better life, only to end up drowning in interest payments. It's the system which inflate price of things which can only be afforded through debt. It's unaffordable without it anyways. That's the success of the system we often hail about making our life easier. 

For the working class, this system is a constant drain. Every dollar I pay in interest is a dollar I can’t spend on my family, my home, or my future. Banks make astronomical profits—some of the biggest in the world—off our backs, while we’re left scraping by. Their other services, like selling insurance or pensions, are just side hustles. Their true role as bankers is to bookkeep, borrow, and lend, with lending being the engine that drives their wealth. And that engine runs on our debt. I believe this is a deliberate strategy to keep us financially tethered, ensuring we’re always one paycheck away from needing their “help.”

So, what can we do? I’m not naive—I know most of us can’t avoid banks entirely. We need their bookkeeping to manage our daily lives, and their deposit accounts are safer than stashing cash under the mattress, thanks to government guarantees. But borrowing? That’s where we need to be ruthless. I personally never borrowed a penny in life neither I used any credit card. I’ve learned to distrust banks, to see through their friendly ads and recognize their true priority: their profits, not my well-being. I experienced that being a Banker not as an outsider. I always managed to differentiate between WANT and NEED which helped to have everything I ever needed without extravagance. For working-class folks, this means staying vigilant, questioning every loan offer, and resisting the urge to buy what we can’t afford.

But is that enough? Can we really break free from a system built to keep us in debt, or are we stuck in this cycle forever? How do we push back against banks that profit off our struggles while the government backs their schemes? What would it take for the working class to demand a financial system that serves us, not exploits us?