Do you pay for every little extra from your bank? Hate your bank’s customer service (or lack of)? Pay for basic services? All are reasons to change banks, and you’re not the only one considering such a move. According to a March 2012 report by Javelin Strategy & Research, 11% of consumers want to change their primary financial institution in the next year. Many consumers protested Bank of America’s $5 monthly charge for use of a debit card, and “Bank Transfer Day” on November 5, 2012 encouraged consumers to switch from large banks to not-for-profit credit unions. Many consumers believe they could find a better deal elsewhere but believe that switching would be a hassle. Here are seven reasons to switch and how to clear the obstacles in the way.
1. Excessive fees
Fees for wire transfers, fees for losing your debit card, fees to download your bank statement to Quicken, charges for extra copies of checks or statements, you name the service and some banks will charge for it.
Whether you moved or your bank moved, if you visit their location frequently and getting there has been a hassle since moving, switch to a more convenient location.
3. Low interest on savings
Shop around for the best interest rate on a savings account. Some banks offer interest on checking accounts as well. This may not be a deciding factor, but it is one that deserves consideration.
4. ATM Fees
Small banks and credit unions may belong to a third-party network of surcharge-free ATMs or reimburse you for fees incurred using another bank’s ATM. Online-only banks like Ally Bank, ING Direct and Bank of Internet USA offer low-cost checking accounts and competitive interest rates on savings accounts. However, this may not work well for customers who deposit a lot of checks, who will need to mail the check or pay for wire transfer.
5. Monthly account fees
If your bank charges you for services like basic checking, using a debit card or banking online, switch. Again, shop around for the best deals.
6. Poor customer service
Not all banks have poor customer service. If yours does, take your money somewhere else. Another bank will be happy to help you when you have questions in exchange for the privilege of having your business.
7. Other perks
Little extras that sweeten the deal may include a promotion for joining, free wire transfers, easy-to-use automatic bill pay and anything else that suits your individual banking needs.
Why do many who want to switch banks never do so? There is a perception of hassle involved, and it’s not entirely inaccurate. Banks want to keep your business. In most industries, keeping loyal customers means offering perks and incentives. Instead, banks just make it harder for you to leave. Some banks will charge a fee to close an account newer than 180 days. If all automatic payments are not transferred correctly, banks may charge a fee for overdrafting an empty account or bouncing a check, and merchants may charge late penalties if automatic payments are delayed in the transfer process. Worse yet: zombie accounts. Banks may reopen accounts that customers have closed if the bank receives a deposit to it, then charging penalties or monthly maintenance fees. Inquire if your new bank will help you make the transition. It could save you a headache and a handful of cash.