Your money needs a roof over its head. Thankfully, you have many styles and shapes of roofs to choose from. There are traditional brick-and-mortar banking institutions where you can conduct banking business in person and Internet banks that virtually eliminate most human contact, requiring all transactions be conducted online or through the mail. Credit unions as well as brokerage firms that offer cash management accounts further expand your options.
The wide variety of banking options means you don’t have to be unhappy if you’re feeling neglected or as though your bank just isn’t all that in to you.
How happy are you?
More than two-thirds of consumers said they would break up with their bank if a better alternative came along, according to a recent survey by the McGraw-Hill Federal Credit Union.
The study shows 36 percent of consumers report feeling uncomfortable dealing with their bank, comparing the experience of banking at their current financial institution with interacting with their in-laws. A separate 30 percent said banking is like dealing with the cable guy, while another 25 percent believe it is as unpleasant as going to the dentist. “High or hidden fees” was ranked as the strongest bank-related repellent, followed by a lack of relevant products and services.
A fifth of consumers with checking accounts want to switch financial institutions, according to a 2013 survey by Consumers Union, the policy and advocacy arm of Consumer Reports. However, despite being unhappy with their bank, only about 3 percent of consumers actually switch, according to a Javelin Strategy and Research report.
Sixty-three percent of consumers in the Javelin study confess to not switching banks because of the hassle. They choose to stick with a bank they’re unhappy with to avoid getting in a relationship with one they dislike even more. An additional 37 percent remain in an unhappy banking relationship because of time, saying the process to change banks takes too long. And twenty-eight percent said they didn’t want to pay any fees to transfer their own money. That’s a common issue, as some banks charge consumers $25 to move your own money while others will assess a fee if you close your account too soon.
Consumers Union continues to advocate for Congress to pass the Freedom and Mobility in Consumer Banking Act, which would prohibit several bank practices that complicate the transfer of consumers’ money. While that act continues to bounce around Capitol Hill, however, there’s no reason to continue stashing your hard-earned cash in a bank that’s just not the right fit.
Is it time for a change?
Just like when a romance fizzles out, there are some specific signs that say it’s time to switch banks. Here’s how to tell it’s time to break up with your bank.
1) You’re facing high/higher fees. There’s no reason to put up with rising monthly account fees or fees assessed because you don’t maintain a high balance. You also should never tolerate being charged for something (like the use of your debit card) that you once received for free.
2) They start taking things away. If, despite your good credit score, your bank cuts or cancels your home equity line or raises the rate on your credit card, it’s time to take your business elsewhere.
3) You get poor customer service. Don’t put up with multiple negative interactions with customer service, unanswered or under-answered questions or lack of personal attention (getting stuck in automated purgatory when trying to talk to a real, live person) — no matter how big your bank is or how many branches it has.
4) They won’t offer better interest rates. Checking accounts never used to pay interest, and traditional savings account rates weren’t much better, topping out at a paltry 0.2 percent. However, to remain competitive, many banks offer interest-earning products — even checking accounts. If your bank isn’t one of them, or doesn’t allow you the option to switch to a more lucrative account, it’s time to part ways.
5) They aren’t tolerant of even one mistake. You shouldn’t make a habit of bouncing checks or overdrafting your account. But if you do slip up just once, a bank that wants to keep you as a customer should agree to refund a rare overdraft or other miscellaneous fee.
6) Your account unexpectedly changes. Don’t stick with a financial institution that moves you into a checking account with higher fees or higher minimum balances than what you currently have.
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