3 steps for switching banks
As more banks increase fees and create new ones, more consumers are ready for a change. Here's how to accomplish that with minimum hassle.
This post comes from Karla Bowsher at partner site Money Talks News.
If your bank raised its fees tomorrow -- and it seems to be happening more and more -- would you ditch 'em? Most of us would, according to the National Foundation for Credit Counseling.
For their latest survey, they asked 2,200 people what they would do if their bank raised its checking account fees. The results:
- 51% would shop for another bank.
- 16% would complain to their bank.
- 16% admitted they'd probably never notice.
- 11% would grin and bear it.
- 6% would close their bank account and start using a prepaid card.
Based on a recent study by Harris (.pdf file), those of us who do switch banks will probably pick a small regional one instead of a big national one.
"When it comes to banking and investment brands, consumers seem to be leaning more toward local brands," says Jeni Lee Chapman, a vice president for Harris Interactive. "The feeling that larger financial companies let consumers down continues to weigh heavy on those brands. They will have to work hard to regain consumer trust."
In fact, when Harris asked 25,000 people to rank retail banks -- based on qualities like commitment, consumer connection, trust, and fair play -- none of the big names made the top five. The Brand of the Year award went to BBVA Compass Bank. The 10 best-rated banks were:
- BBVA Compass Bank: 62.3 (out of 70).
- Huntington National Bank: 57.1.
- TD Bank: 56.
- Fifth Third Bank: 55.8.
- Bank of New York Mellon: 54.5.
- PNC Bank: 53.5.
- Chase Bank: 53.4.
- Wells Fargo Bank: 52.9.
- M&T Bank: 52.3.
- HSBC Financial Services: 52.1.
If you're considering leaving your bank but aren't sure where to start, here's a three-step plan to moving on:
Find your new bank. Small local banks will probably offer better deals than the monster ones. Or better yet, don't use a bank at all. Use a credit union instead.
Credit unions are nonprofit and community-based, which is as close to the good old days as you're likely to find. Compared with giant banks, most credit unions pay higher interest on savings and charge less for loans. Their fees and interest rates on credit cards are often lower too -- and many still offer free checking.
If you're worried about convenience, don't be. If the credit union you pick is a member of a shared branch network, you can access it at other credit unions, even those in Europe. In fact, you might even be able to access your account from full-service kiosks at the nearest 7-Eleven. See our story "7 reasons you should join a credit union this week."
If you're not eligible for a credit union through your job, use the Credit Union National Association's credit union locator to get a list of the nearest credit unions. Look for "community" as the type. That means you're probably eligible to join by virtue of where you live as opposed to belonging to some profession or group.
Then compare their rates and fees to those you're paying now. Like what you see? Find out if they're a member of a shared branch network by going to CUServiceCenter.com. If they are, that means you can go to any other shared branch credit union or ATM in the world to conduct business just as you would at your own. (Imagine banks doing that?)
Ease away from your old bank. Ask your new bank or credit union if it offers a "switch kit." That's a collection of the paperwork you'll need (which might be online) to redirect your direct deposits and inform companies that automatically take money out of your old account to start taking it from your new one.
More on Money Talks News and MSN Money:
Copyright © 2013 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
ABOUT SMART SPENDING
Editor Bev O'Shea lives and works in the foothills of the Appalachians. A former copy editor for The Atlanta Journal-Constitution and the Orlando Sentinel, she joined MSN Money in 2007. She's a fan of sunsets, college football and free shipping, among other things.
Having worked as a writer, reporter and editor for more than 25 years, Editor Julie Tilsner is the sort of person who can't help but correct grammar in Facebook postings and on billboards. She's written for BusinessWeek, the Los Angeles Times, Parenting, Redbook, AOL and others. She lives in Los Angeles County with her family and loves to drink wine and practice yoga, although not generally at the same time.
A writer for MSN Money since January 2007, Donna Freedman won regional and national prizes during an 18-year newspaper career and earned a college degree in midlife without taking out student loans. She also writes about smart money tactics for magazines and on her own site, Surviving and Thriving.
Mitch Lipka has been warning people about scams and shining light on questionable business practices for more than 20 years. Mitch, the consumer columnist for The Boston Globe, has also been a reporter and editor at The Philadelphia Inquirer, Consumer Reports, South Florida Sun-Sentinel and AOL. He won the 2010 New York Press Club award for best consumer reporting online and was honored in 2011 for his reporting on child product safety.
Marilyn Lewis is an award-winning writer with a passion for getting readers clear, straight information that helps them stay out of financial trouble. A former reporter for The San Jose Mercury News, she works from her home in Port Townsend, Wash. Contact her at MarilynLewis@Outlook.com.
LATEST BLOG POSTS
Sounds too good to be true . . . but by using these extreme tactics, it's possible to save big at the pump.