This article is by staff writer Adam Baker, whose own blog featured the hit post 42 Ways to Radically Simplify Your Financial Life.
When I was 14 years old, I opened my very first checking account at Bank One. That’s where my Dad banked and so that’s where he drove me when I asked to open an account. Over the years, I continued to give them my business.
By 16, I had opened another checking account (don’t ask me why) and a new savings account, too. At 20, I started my journey into credit cards with… yep, a brand new Chase credit card. (Note: Chase ate Bank One in 2004.)
At 21, I opened my first Chase business checking account and, at 22, I funded $1000 into my new Chase investment account. When my wife and I married the following year, we canceled her National City account to combine our finances with… Chase.
You get the point. While this may not seem too out of the ordinary, there’s only one problem: Neither of us really likes Chase Bank.
In fact, I’ve never really liked them that much. I’ve wanted to switch to a local credit union for years, but just haven’t done it. I’ve been eyeballing USAA ever since they opened their checking and savings accounts up to civilians. Mentally, I want to change…but physically I’m still a Chase customer.
What does it take to make you switch banks?
There are plenty of reasons why someone might switch banks. A couple factors that come to mind:
- Higher rates. This not only applies to rate chasing to find the highest interest rates, but any form of benefits offered. Maybe there’s a 0.5% better savings rate at the bank across the street. Maybe another is offering a free $100 when you open a new account. These are all situations where the bottom line may be the primary influence.
- Customer service. I love great customer service and I’m willing to pay more for it. In banking, this now includes both in-person and online customer service features. While I abhor having to call Chase (try it someday, it’s terrible),I love a couple of the people at my local branch. I know the branch manager and business banker well, and they always greet me by name. In addition, I have specific online banking features set-up that I’ve been using for years. Their online services aren’t perfect, but they’re above average.
- Length of history. As I outlined above, I’ve had a Chase account for over a decade now (and I’m only 25). In this day and age, customers will longer histories at a single bank are more rare. Anytime I have an issue on the phone, I immediately have them look up my history. While I’m not a big fish to them in terms of money, my account history tab shows dozens of accounts over nearly a dozen years!
- Principle. The longer I’m involved in personal finance, the more I prioritize this category. I’m not a huge fan of big banking. I’m not a conspiracy theorist and I won’t be picketing in Washington, but I like the idea of giving my business to a local bank. “Principle” is a major reason Courtney and I reject credit cards, and many people point to this reason giving their business to credit unions.
- Accessibility. Years ago, the only factor I cared about was how close my bank was to my house. Here in the Midwest, no one does that better than Chase. It’s almost as bad as McDonald’s (almost…)! With the rise of online banks, the walls of this one are coming down. For some, however, it remains a huge factor in choosing a bank.
So, will I walk the walk? I’m not sure whether Courtney and I will switch our bank. We want to, but we aren’t compelled to…at least not yet.
I’d enjoy supporting a local credit union or a testing out a bank with a reputation like USAA. I’m not much of a rate chaser and accessibility isn’t a huge priority. I much would prefer a bank I feel good about supporting and that offers me fantastic customer service.
At this point, Chase seems to be just doing enough to keep us around. But after writing this, we’ll see how long that lasts!
Have you recently switched banks? What was your motivation? Any suggestions for me?
J.D.’s note: I stuck with a lousy bank for a l-o-n-g time. Ultimately, I moved my accounts to a local credit union, and I love it. I’ve since added an online bank to the mix (ING Direct). Neither of these banks is perfect, but they both provide excellent customer service and above-average deals, so I’m pleased to stay with them.
This article is about Ask the Readers, Choices, Savings
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What does it take? Enough anger and frustration. Recently I made the decision to change from Wells Fargo to my university Credit Union. I opened an account last Friday and I plan on closing my WF account today as soon as some money that’s been wired over goes through (and I withdraw it). I am really tired of Wells Fargo service and I think that in the past 3 weeks they have been exceedingly annoying. I’ve been using WF for more than 3 years, mostly because I manage my mother’s account while she is abroad and her account has existed for about 10 years. I’ve recently convinced her to close her account because she is being charged with all sorts of fees on a monthly basis and it’s difficult to change things when you’re not in the country.
For me, I think the hardest part was just getting everyone on board. My mom was the reason I started with WF and my husband is reluctant to rid of his joint account card. I’m the only one who religiously goes on to check our account status and to pay bills so I’ve found the system very convenient. However, because of my habit of going online I’ve noticed that WF frequently changes the DEBIT DATES of my transactions and in recent weeks they have used this as an excuse to charge me overdraft fees, etc. They have also done unscheduled billpay without my permission (which I’ve revoked) and their customer service has worsened in the last few months.
Not to mention how slow debit transactions are on Wells Fargo, I mean…It can take up to a week for a check deposit to show up and 3 days for any other transaction. I grew up in Europe where we use Visa Electron which is immediate “debit” and does not have any “pending time” so I have no patience for slowness.
The reason I’ve been able to transition is because I’ve been looking to do a balance transfer for my American Express and discovered that I could try with the credit union. As WF pissed me off I just stomped right in there and opened an account, loved the customer service, and knew that I wouldn’t regret it.
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I’ve had 2 banks for over 35 years; one is commercial and has banks all over this State, the other is a credit union – located in other town/district that is difficult to physically get to. The commercial bank provided checking and savings account services, etc. The credit union provided for loan products (a home equity loan, car loans, etc. with lower interest rates) and credit cards (lower interest rates that has never changed in over 20 years and no annual fees, etc). But, 5 years ago I let go of the commercial bank, kept the old credit union (and still have credit cards and paid off the equity loan), and joined another govt employee credit union that is located 2 miles from our home. I’ve never regretted the move, as the commercial bank charged fees for everything (ATM, bank accounts, notary, travelers cheques, checks, debit cards, etc.) My local credit union provides all of those services including on-line banking for free. The primary checking account is linked to the primary savings accounts (used for short-term contingency savings) and so there are no overdraft fees (unless there is no money in the savings account to cover the overdraft in the checking account – so far, that has not happened). We also have a 2nd savings account that is for long-term savings and is not linked to the primary accounts. Interest rates earned on CD’s and Savings are higher than commercial banks. Needless to say, our bank balances have increased substantially over the last five years. A credit union is also a “nonprofit” and thus can give their “owner” clients the benefits of its lower overhead costs and not charge exorbitant fees just to make a profit. They are also more conservative than commercial banks and therefore do not put their investors at undue high risks. Nonprofits are also insured by NCUA – just as commercial banks are insured by FDIC. We were paying over $300-$500 annually for a commercial bank service; not any more, thank goodness. Changing banks didn’t lower our credit score, and instead of paying the bank, the bank now pays us interest on all our accounts, investment products, etc. So, we still have two banks, but they are both local credit unions.
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What did it take to make me switch banks (From Chase actually).
The moment I saw they were holding and reordering my debits and credits (including my direct deposits and other EFT, which I know now is illegal). The moment I saw them trying to force me not only to overdraft, but to overdraft multiple times I changed banks.
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Hi! For heaven’s sake, Adam, don’t delay. Chase is a crummy bank. USAA is a superb bank. I have all my insurance and credit cards with them, too. Excellent customer service. It’s true there are no branches but you can scan your checks into your account, so there are no problems.
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Wells Fargo to Rivermark. They severely messed up my checking account and didn’t care too much about it. It took 2 weeks to fix it. Then I switched.
Funny side story. Manager asked me as I was closing my account to walk into Rivermark and ask if anyone would say hello to me and remember my name. I said in front of all of the tellers, “I’ve been coming here since this was First Interstate Bank and that hasn’t happened once here!”. That has been almost 20 years.
All the teller immediately turned away.
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I am delurking to post my love for USAA… I have never had better customer service than with them! I even lived overseas for a year and when I called to ask questions, they transferred me to an “international specialist”. When I called our credit union to let them know they would see international charges on our account, I was told they can’t handle international charges…
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I belong to two credit unions. The first one was in conjunction with my late husband’s employer. It’s located close to where we live. The second was in conjunction with my employer. It’s close to where I worked. Both CU’s have checking accounts and two savings accounts. Primary savings have $500 each as e-funds and secondary savings as play money,
My two pension checks get deposited to first account to cover all monthly bills which are setup for automatic bill pay. only check that has to be written is rent check. An automatic transfer is made to my ING account to handle all those other bills such as insurance and doctor and medical bills.
Second CU gets my Social Security check. My daughter also has an account with this CU which was set up when she went to college to make it easier to get money to her. She’s now married with 4 kids and I have money deposited to her account for the kids education. Plus automatic transfer to Ally Bank that has my money market account.
Because of doing business with credit unions for so long I haven’t paid a bank fee in over 30 years. I even get free checks because I’m a senior citizen. I’ll probably never leave either cu because the great service received.
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I loved WAMU, and was unhappy to see them go under and then Chase take the helm. I do not like Chase at all, but I’ve got so many auto deposits and deductions set up, that changing will be a royal pain. However, Chase sealed the deal by adding a $3.00 fee for any transfers or transactions to an external account. Basta!
In spite of the headache, I am going to open an account at a local credit union. I’ll of course keep the Chase account open for several months to be sure everything clears and gets well established, but then Chase is history.
I use ING for my Efunds and other savings, and I am very happy with that bank. They are super! Chase can rot, IMHO.
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Chase, Bank of America, and Wells Fargo are by far the WORST banks on the face of the planet. They have lots of branches, but they have to pay for the branch saturation somehow. This is done by nickel and diming their customers. Collectively they all play tricks like changing payment dates to charge people with late fees who pay automatically; accidentally charging fees on free accounts hoping people won’t catch the charges; and doubling people’s interest rates on credit cards because they didn’t like the new credit card rules that made them stop some of their most corrupt practices.
Those three banks are probably the most responsible for the mortgage crisis; received the most TARP money that they used not to hand out loans, but to purchase other banks to make themselves larger; and have refused to modify loans that they should have not have given in the first place. Further, the second a person has a financial problem [e.g. job loss] forget about asking them for help. Not going to happen.
Community Banks and credit unions are the way to go. The money you borrow and the relationships are local. If you have a problem, they will likely try to help. When you have a problem at the other banks, people in distant lands will be responsible for making decisions, not people you see every day. I have opened accounts with all three of these horrible banks in the past and still do occasionally. This, however, is mostly to take advantage of free money they are giving out. I gleefully try to cost them money at every opportunity I get because of the horrible ways they have treated myself and others I know both personally and professionally.
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I have been with Chase since it was Bank One and First Chicago Bank before that. I like them just fine, never had problems they weren’t able to resolve over the phone. I have a credit card, mortgage and checking account with them. They would have to start charging me weird fees to get me to switch since I like the convenience of all their atms around town. Plus I like being able to pay my major bills (cc and mortgage) same day from my checking.
I have been with ING since 2003 when I realized they have the best saving interest rate and am sticking to them out of loyalty even though their rate is no longer the best because I love the customer service/convenience.
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I hit the trifecta with USAA, Pentagon Federal Credit Union, and Navy Federal Credit Union. I play them off against each other for loan rates, but the past 7 years Penfed had them beat. Anyone can join PFCU if they join The NMFA first for a year membership. Saves you thousands of $ on loan fees.
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I’m surprised at what I’m reading.
My family had been with USAA since the 1960′s when my Dad was in the Army. My father had even convinced military relatives to switch. I can remember hearing my cousins (who are 20 yrs older then me) telling my parents about their good experiences when I was I kid & thanking my parents for advising them well.
I’d had a USAA checking & savings account since I was 17. As I became an adult that account was the pin to my financial life. I knew how the bank worked and all their rules – I was always a good customer. Their service has gone down hill so much in the last few years I left them last year after over 15 years of banking. On 4 separate occasions I was given very inaccurate info by their reps on new bank procedures that caused my accts to get screwed up. The final straw was when they started to freeze incoming money transfers for a week regardless of good account history – I could understand if I’d been kiting deposits(one rep accused me of doing that) but I only transferred money from my local credit union if the money was in the account. Any checks or cash people wrote me I’d put in the local bank & then transfer to USAA. Been doing it that way for over a decade – I’d tried their scanning deposit thing but had issues with private checks and obviously couldn’t scan in cash. So suddenly if a client (I run a small business out of my house in the evenings) paid me on Friday, I deposited the money and then went to USAA’s website before 3pm to transfer the funds I wouldn’t have access to the money till the following Friday. USAA would electronically remove the money from the local bank acct within hours but I couldn’t touch the funds for a week. Phone calls to USAA didn’t help. It used to be I’d have access to the money the following day – so I could use the money the during the weekend to get groceries. I was having problems with their new bill pay system too but it’s been too long and I don’t remember what the deal was there. I opened a new acct at a local Credit Union that functions the way USAA used to – so far so good (fingers crossed).
I left USAA’s auto insurance division 2 years ago because of how they handled an accident where I was not at fault. Almost 4 years ago, I was hit by a speeding truck on the interstate and spun out of control. Even though there was no ticket issued, the cops ruled it a hit ‘n run USAA found me to be at fault and hiked up my rates (there was nothing else on my driving record).
My brother had a similar experience with their auto insurance division about 8-9 years ago and he left them completely then.
In June or July of 2007 a tornado came through my town followed a few days later by a wind storm. The adjuster came by when I wasn’t home. They refused to cover most of the storm damage – I had holes in my siding larger then my foot also, I was missing shingles on my roof – the adjuster completely missed this blaring damage. The adjuster had no local or toll free phone number to be reached at. I work for the govt and can’t call long distance from work(at least not for not-work related stuff) – I used multiple lunch breaks and got off working early a few times trying to reach him with no response. After getting an atty involved I got the roof covered last spring – however now the roof has been replaced they are refusing to pay the rest of the claim. They don’t want to pay for the siding to get repaired properly. USAA wants pieces of siding removed from one part of my house and then put where the holes are. And then they will replace the pieces removed. The vynl siding is 20 years old and I’ve had over 6 contractors tell me that the chances of the siding breaking while being removed & relocated during the repair is very good. Now the last message stated that USAA doesn’t think it was storm damage. Tree branches flew into the side of my house and that’s not storm related? I took pictures after the storm that I’ve even emailed to USAA. To keep it short I’m leaving out details.
I switched my home owners from them to a local person last last year and I’m relieved I did. I’m at the point I’m just walking away from USAA- my new agent is going to help me get some contractors who can get the siding fixed properly with out all this grief. I’ll have to pay for it out of pocket but at least it will be fixed.
My mother had something similar with her home coverage 5 years ago and after being with USAA since the 1960′s she left. My Dad has left USAA too but won’t say why.
The only thing I have left with them is my life insurance – I got it young enough that no one can touch the rate. Although I worry about my estate getting settled alright if I die – what if USAA gives crap about that?
I’d be very hesitant doing any business with them. My family (Mom, Dad, brother, Aunt, Uncle, 4 cousins) had great experiences with USAA but during the late 90′s things started to slip and they don’t seem to be that good anymore – I’d say local is better. Be very careful if you deal with USAA – I think they’ve gotten too big.
I don’t think it’s hard to change banks but, I don’t do any automatic pymts. I have my paycheck auto deposited but everything out going I setup re-occuring pymts in the banks bill pay system. Got burned several years ago when my water company took money out before payday. So now I just go to my bank’s bill pay 2 weeks before payday and adjust outgoing reoccurring pymts I have setup as needed. If I get ill or something I just let the reoccurring pymt I have setup handle it – figure the utilities getting paid something should make them happy even if it’s not the full amt due. If I need to switch banks I can print out the bill pay screen & put everything into the new banks bill pay system(I do it at home so I have all acct #’s handy). So far the new bank is doing good – local credit union. I can’t get used to banking with a human after so many years of doing it over the phone & on the web.
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Best advice that’s short and sweet: switch now!
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I have been debating switching banks for months now. After reading all of this I am going to. I do not think my bank has the “right touch” for my money anymore and after a major bad experience, I just need to do it.
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Like many others here I have banked with USAA since I was young (Navy dad) and I kept my banking with them when I commissioned into the Air Force. I was stationed in England for four years with no problems (they even had a London based office for British vehicle insurance). I did open a local bank account to deal with American Dollar to British Pound conversions.
When I moved back to the states I looked to USAA for a home mortgage, but they required 45 days to close because of their mortgage workload (this was in 2008 – so much for nobody buying homes). I went with a local bank, which I think turned out really well, especially since it was a first home purchase for me. It was nice to be able to sit down at the bank and ask the lender questions.
I keep my checking, savings, retirement, investment, and insurance accounts with USAA and have always been impressed with their customer service. They really understand the needs of active duty military members an go out of their way to be respectful and helpful. I’ve never had a bad experience over the phone with a USAA rep. With the ability to scan a check for deposit, and with ATM fee reimbursement, I have never run into a time where I really needed a brick-and-mortar bank.
USAA interest rates aren’t that great right now, but then again who in the world has good rates right now?
I am loyal to USAA because they have been good to me for over 15 years. I have taken my banking elsewhere at times out of pure situational necessity, but always look to USAA first.
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I recently dumped Chase in favor of a local credit union. Besides all the other benefits you mentioned, I have to say that I love their ATM’s. To get $40 out of a Chase ATM, it takes a minimum of 2 minutes because between every step, you get a picture of a supposed smiling customer with a caption about how Chase is the greatest bank ever. Now I can get money in under a minute.
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I’ve used USAA for my insurance, checking and auto loan for about five years (I’m a youngster so it’s really served as my first bank). It is an amazing bank. I hear all the horror stories but USAA has never failed to impress me so far. Lost a card once at a bar which someone promptly ran up a 300 dollar tab on and they reimbursed me within the week–no further questions asked. Low rates and the ATM refund are great too. The one time I was late making a payment because I misread the due date, I received a friendly–yes, friendly call–asking if I knew this payment was due. I didn’t. I paid it the next day and I paid no fees and I received no record of deliquincy. Of course, I think there might be a learning curve for the online banking for some less technically savvy folks (Deposit@Home, iPhone Deposit are sweet). Its only downside is the savings accounts aren’t very competitive (so I use ING).
Just thought I’d comment here. Seriously, I’m okay with paying a little extra interest (at very competitive rates, mind you) to a bank that GETS IT.
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I recently made a blog entry about my experience.
http://www.yourfinancialwatchdogblog.com/yfw/2010/03/my-journey-back-to-local-banking.html
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After 20 years with a credit union that became a savings banks, then was swallowed up by the largest regional bank, I had enough. Instead of great CU service, I was being fee’d to death. Nor could I reach competent people on the phone. The last straw came when the bank refused to pay my electronic mortgage payment to Wells Fargo, something I had set up for nearly a decade (Wells was very nice and did not charge me anything for the late mortgage payment- they couldn’t talk to the bank either to get things resolved).
So I looked for a local CU or savings bank. Found a smallish regional bank where the manager knows me now, waives fees when I ask him to, and my printed checks are free. I also have an ING Direct account.
If anyone wants to know the name of the Big Bad Bank, e-mail me. It’s in the NYC area.
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All of these comments are great! I just switched this evening from BofA to one of the local credit unions here in Portland, Northwest Resource. My company is a member and I’ve been meaning to do it for awhile; what finally sealed the deal was the same thing a few other folks have mentioned — the IRRITATING moving around of EFTs in my checking account. On Monday I had ~$800 in my checking account, no pending transactions despite writing a $495 check and a $200 check. I had just written a $74 check so I transferred an additional $80 to make the difference. Well, today I discovered that BofA had pulled $100 from my savings (my automatic overdraft protection — comes with a $10 fee) because of “insufficient funds.” When I looked at my account activity, checks had cleared on 3/6-8 which were not even listed when I looked on 3/8. SO INFURIATING. I had to pay $10 for that. BofA charges me NINE dollars a month for my secondary checking, which is the account I use to write checks from (my primary checking is my direct deposit/debit account; I transfer money from it for the checks I write so that I can very clearly monitor my bill money). They charge me that fee because I don’t keep a $500 AVERAGE minimum in the account. I’m not interested in paying $108 a year anymore. Done. It’ll take me awhile to move everything over to the CU but I feel really good about going local. The rep who helped me today was very, very nice and they have a lot of great things to offer, like bike loans (in such a bike-centric town this is awesome), a great, low-interest, friendly credit card, and other member-oriented services. Their bill pay is clunkier than BofA but that’s OK. Glad to see that the move to local banks/credit unions has been almost universally positive for everyone here!
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