Why most of us won’t change banks

Did you ever look at a bank's website and think to yourself, “Why would they give you free bill pay when they charge for everything else?” Even with the super-restrictive accounts that limit ATM deposits and withdrawals; put holds on most of your checks; and demand monthly fees or regular savings transfers; bill pay is usually offered free. It's surely not an inexpensive process from the bank's perspective; there's the technology and software required for processing and security and for many payees the bank is eating the printing and postage costs. (If I was a betting woman, I'd put lots of money on the suspicion that, per transaction, bill pay is far more expensive than, say, overdrafts due to debit card transactions, for which banks charge more than $30 per instance.)

Why BofA Thought Debit Fees Would Fly

When Bank of America first announced they would charge fees simply for the use of the debit card (the bank later reversed its decision) it was a calculated risk based on the belief that their large ATM network and, most importantly, their freebies had their hooks in customers.

“They're hoping that people will throw up their hands and be willing to pay $5 a month to spare themselves the hassle of changing,” said Ron Lieber of the New York Times in an interview on NPR's Talk of the Nation. The hassle isn't with changing direct deposit routing and buying new checks and vanity debit cards — it's more about changing bill pay. “People have gotten used to having their credit card bill paid from their bank account and paying their utilities and maybe there's a direct connection between the school or a tuition payment plan. And, you know, by the time you're done, you've got 10 or 12 different tentacles into the account, and you start to believe that it's going to be really complicated to extract yourself.”

It's Not Just the Hassle: It's the Love

Did you know you are more likely to be satisfied with your bank — and pay for additional services — if you pay your bills online with your bank's website? (Those of you who don't pay bills online, you've seen those photos on your bank's home page of pretty, smiling women sitting at their computer paying bills with an attitude of absolute zen, haven't you? You know what I mean.) In a survey of 900 Forbes.com newsletter subscribers, of online bank users, those who paid bills online rated their bank as significantly better than those who did not.

In a press release that must have been targeted at product managers and accounting folks at banks, the firm that ran the study crowed, “Data suggests that converting online bankers to online bill paying customers represents the best opportunity for banks and credit unions to increase share of wallet while driving customers toward the most cost-efficient channel for services.”

Then, There is the Lazy Factor

Even though many of us would rather bank with a credit union, an online bank, or a bank like USAA, any of which seem like better choices than Bank of America or another too-big-to-fail-sized bank, it's just a lot of time and effort. There is, says Lieber, “the perceived pain involved with switching.” And our banks give us enough pain just by being who they are without adding in the considerable time to do paperwork and input all those account numbers, addresses, and phone numbers, again.

That's why Representative Brad Miller of North Carolina has been pitching what he calls “account number mobility” — the ability to take your account number with you when you change banks (though, presumably, you would have to change routing numbers). More importantly, his “Freedom and Mobility in Consumer Banking Act” would:

“…make it simpler to close accounts, and for 30 days following the closure any direct deposits would have to be transferred to the new bank free of charge. During that period banks would also be obligated to notify customers when a recurring debit occurs. This measure wouldn't completely remove all the hassles of switching banks, but would protect consumers from unnecessary fees and grief,” he says.

Miller points out that the technology to do this is already in place; when the FDIC takes over failing banks, customer accounts are transferred seamlessly.

It's Hardest For Those Living Paycheck-to-Paycheck

If you've never timed your payment to the mortgage company precisely so that it would be credited to your mortgage account by the due date and not clear your bank account until the following day — when your paycheck was deposited — than good for you! But most Americans have a more tenuous hold on their good credit and the funds in their bank account than that. (I know, many of you are the sort who keep an emergency fund and a personal escrow account and never worry about that at all. But you're special!)

If you do have your paycheck set up to direct deposit into your account, along with many regular automatic bill pays and debits, and you are regularly running out of money with a few days left in the pay period, it's near-impossible to get the “float” to switch banks. You'll want to have a little extra that you can deposit in the new account while you wait for the change in direct deposit to take place; and if you're also juggling checks and pending debit transactions, it might seem a hopeless mess and certain to trigger nasty overdraft fees from the banks and late fees or NSF fees from the merchants. You'd probably throw your hands up and say, “No way.”

Only the 1% Can Change Banks Easily?

To see how hard it was to change banks and switch bill pay and other automatic debits, the Lieber used a stopwatch. “I had somewhere between 10 and 15 automated payments and direct deposits to various sorts that I needed to change, and it took me a little under two hours,” he told Talk of the Nation. And, of course, there was the float. “Sometimes, they may be taking money out of one account when you think they're taking money out of another. So you need to leave some money in both places just to allow for that,” he said.

When I was at Wharton, everyone's favorite finance professor, Franklin Allen, taught us a tongue-in-cheek chorus to his questioning. Professor Allen was (still is, I'm quite sure) adorable when he would call out: “And who doesn't pay taxes?” We'd reply, 100 good MBA girls and boys, “Rich people!” Rich people also have the benefit of no transaction fees in the Allen finance world. Indeed, it's the wealthier customers whose accounts never trigger the maintenance fees and the like (and wouldn't have had to pay debit fees, had Bank of America been stubborn).

The wealthy, who have the float to change banks easily and accountants and personal assistants to make it happen, don't care as much about changing banks, because they're being taken care of. And this is what Bank of America and many other large banks have counted on all these years. Until now.

Consumer Anger was a Perfect Storm

Who could have predicted the effects of such a small fee? Especially after my cursory analysis last month showing well over $100 per customer in fees was a pretty common average for large banks. But the timing couldn't have been worse, right at the beginning of the Occupy Wall Street movement. Suddenly, thousands of people nationwide showed that they were not just willing to put 90 minutes into changing banks; they were willing to put their lives on hold for weeks to camp out and protest bank fees. Then someone invited a few friends to change to a local bank or credit union, and Bank Transfer Day was born.

Early reports were that the Transfer Day was very successful; even before the event, it had enough of an impact to influence Bank of America's decision to charge those now-infamous debit fees. But the damage was done, not so much to the banks' reputations, but to the idea that changing banks was odious and hard.

Suddenly, it was a small thing anyone could do to show their beliefs in keeping money local and in the hands of financial institutions organized around service instead of profit alone. It was unforeseen by big banks and could, in the end, make them more reliant than ever on those “rich people” who don't pay any fees — and, sadly, the families struggling from paycheck to paycheck.

The end may not be a fairytale one for the banks, and many of us have finally found the strength to change our automatic draft to the cable company each month. But, as long as the account portability legislation stays in limbo, the banks will keep the most lucrative customers on both ends of the financial spectrum; at least, that's what I see in my crystal ball.

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Brad Moore
Brad Moore
8 years ago

I loved hearing that BOA story. I used to work for a credit counseling agency and BOA was incredibly hard to deal with! I am wondering if you can confirm something for me. I found out a while back that if you have more than 1 account with a bank, they can go into account 1 and take money – if I overdraw on account 2. To make if plainer, if I overdraw on my Cap One Checking account and I don’t pay for a while – then they can go to my 9-year old son’s account (that’s pretty sad!!!)… Read more »

Tom
Tom
8 years ago
Reply to  Brad Moore

Hm, that’s new to me. I think most banks offer linking of accounts as a courtesy option (and the opportunity to fee you for a simple transfer). It wouldn’t surprise me if they reserve the right to pursue funds from other accounts if you become very delinquent as you described, but I think most banks offer a long “grace period” to get your account back in good standing.

Julia
Julia
8 years ago
Reply to  Brad Moore

This will happen with all banks or credit unions. It’s a type of cross collateralization. If your name is on the account, the bank or credit union can take funds from account 2 to correct account 1 or make loan payments if you are past due. They cannot take from retirement accounts since these are protected accounts. If you’re worried your account will make Junior lose their birthday savings, keep Junior’s account somewhere else. And once your children are 18, remove your name from the account. The bank or credit union will take your money to make Junior’s account positive… Read more »

Brad Moore
Brad Moore
8 years ago
Reply to  Julia

Cana bank go into a business checking account also (i.e. better to get personal account at 1 bank and business at another)?

Money Wizard
Money Wizard
8 years ago
Reply to  Brad Moore

An Accountant once told me that keeping everything with a Credit Union is a bad idea. Apparantely, all collateral put up for loans through a Credit Union are also subject to this “cross collateralization” that Julia mentioned. Thus, if you default on a personal loan which has no collateral connected with it and you also have a car loan through them, they can come and repossess your car. Apparantely, Credit Unions are special over banks with regards to this. I’m not certain what it is that allows them to do this, but apparantely, they can. The Accountant who told me… Read more »

Rosa
Rosa
8 years ago
Reply to  Money Wizard

Most of us don’t have that kind of debt, though – maybe a mortgage & a car loan is typical. But that’s the limit of most people’s collateralized debt. Not that many people buy cars. For us, with our mortgage and no other debts, the credit union is perfect – unlike the original bank we had a mortgage through, who resold the loan and then the new bank switched processors and every time there was a change they managed to mess something up and then act surprised when we called them on it “Oh that extra payment that said principal… Read more »

barnetto
barnetto
8 years ago
Reply to  Money Wizard

That is interesting to know.

Although when I googled this said that real estate isn’t included in cross-collateral:
http://www.flumelaw.com/cross-collateral.asp

babysteps
babysteps
8 years ago
Reply to  barnetto

If I read this link correctly, with standard loan language a bank can’t take your house if you default on another loan/overdraw an account at the same bank (but that they could do this on your car). However, the bank can tap other accounts in the other direction – that is, if you default on a home loan, in general a bank can draw from other accounts at the same bank. State laws can differ, but at least in CT the practice seems to be that banks wait until foreclosure, and when (if) there is a deficiency judgement they tap… Read more »

Ely
Ely
8 years ago
Reply to  Brad Moore

Yeah this happened to me. I’m Treasurer for a club, and shared the club account with the President. He went through a nasty divorce, his ex put his SSN on some tax thing which she then didn’t pay; her account was empty, so they took ours. Of course I didn’t know any of this at the time, I just knew that Wells Fargo had emptied our account with no notice and no explanation. We were very fortunate to have no checks outstanding. We switched banks, & got a TIN for our club to avoid future problems. The President reimbursed the… Read more »

Brian
Brian
8 years ago

I agree completely that the switching costs have risen substantially with online bill pay and direct deposits. But those are also services that have real value. I’m happy to have them for “free” every day even if it means that I have more headaches the few times in my life when I want to change banks. On switching costs, we need to look at bank fees just like any other thing we pay for. Ask the question “Is the amount I’m paying worth the 2 hours of my time it takes to make a change.” If the answer to that… Read more »

Brett
Brett
8 years ago

I just switched banks from Wells Fargo to Ally. I moved to Boston and Wells Fargo doesn’t have any branches in Boston. The switch was pretty annoying because of stuff like automatic bill pay. I tried doing it over a single month, but that’s because Ally has no minimum to open and I had plenty in savings to start my accounts off with $100 in each of them. I like to hold two checking accounts (1 for expenses, 1 for discretionary spending) and one savings account. Once I opened the new accounts in Ally, I waited until all my bills… Read more »

Andy
Andy
8 years ago

I use a credit union, but if I was at a big bank now I would definitely switch. I don’t buy into the “it takes too much time” argument. For me it’s a matter of principle, and I’d be more than willing to take the time to switch for something that would benefit me for many years to come.

Dogs or Dollars
Dogs or Dollars
8 years ago
Reply to  Andy

With Andy on this one. It becomes about the principle of the thing at some point. That’s why I switched from WaMu years ago, just before they became chase. Switched to a credit union and havent looked back. Vote with your dollars and your feet, I say! These ‘hassles’ are mostly built up in our heads. In fact, going through an exercise like switching bank accounts, forces you to audit your current architecture. You can eliminate payees you no longer need, links to accounts you might not use anymore. Its an opportunity to streamline and get in touch with your… Read more »

Matt, Tao of Unfear
Matt, Tao of Unfear
8 years ago
Reply to  Andy

Totally in agreement. Free bill pay, free checking, free savings, free overdraft protection, free financial advisors, free cooperative ATMs… and probably lots of other free stuff that I get from my credit union and don’t even realize. I can’t imagine ever paying the fees that people pay at banks. They already get to use my money, and they aren’t paying very much for the right.

barnetto
barnetto
8 years ago

I’m in the middle of transferring from BoA to a local CU right now. I wasn’t going to get hit by the debit card fee (since I never use my debit card), but I decided my laziness no longer outweighed my annoyance/fury at Too Big to Fail institutions and their lobbying to prevent any meaningful financial reform. Opening the new account went smoothly, my first direct deposit has gone in, and I’m in full swing transferring my bill pay over before I close my BoA account. I read that BoA re-opens your account and charges you a fee every time… Read more »

karen
karen
8 years ago

Really? We need the government involved in helping people switch banks?

It seems we have more important things to consider as a society than shortening the time someone needs to spend closing their on- line bill payments.

Kristen
Kristen
8 years ago
Reply to  karen

I have mixed feelings about this. On the one hand, I agree with you. On the other, being able to port your mobile phone number has been wonderful. It has opened up the marketplace and allowed greater consumer freedom. That’s a role I don’t necessarily mind government playing.

Sara
Sara
8 years ago

I have always wondered what the big deal was with switching. The lack of float money makes sense. I am one of those with both an emergency fund and a budgeted amount to cover irregular expenses. This includes keeping $1000 in my checking account “just in case” so I have never needed overdraft protection. I have a friend who is regularly paying overdraft fees so perhaps that is common, but it is crazy! And I am hardly in the 1%. I live with my two kids at about 30% of the median household income in my area. It never made… Read more »

BD
BD
8 years ago
Reply to  Sara

I don’t get the big deal over switching banks either. It’s easy. And I’m poor (in the bottom 5% of earners, making well under the poverty line)! I’ve had accounts at BofA, HDCU, SunTrust, ING, PayPal, SBSU, and a couple other banks whose names I’ve since forgotten. Switching is always fast and easy. You just withdraw what you have out of one bank, and stick it in the other bank. If the banks are long-distance, you have them wire the money between banks. It takes a day. Why is this tough? And yes, I have free checking, and all that… Read more »

Gretchen
Gretchen
8 years ago

Annoyingly enough, my credit union has announced (small but irritating) fees for (pretty much) everything starting in January.

I’m not sure what I’m going to do mostly because what’s to say new bank/CU won’t start charging (worse) fees?

abby
abby
8 years ago
Reply to  Gretchen

Mine too. I’m giving serious thought to moving my money, but I need to take the time to do research and figure out where to move it TO!

Amber
Amber
8 years ago

The bank has to make it worth your while to switch. Orange just sent me a check in the mail for $25 to open a savings account there. That was sufficient for me to hassle with the work of opening the account. I recently closed an account at Citibank. The “branch” I went to to close it did not have any cash on hand (WTF?) however the nice woman there instructed me give the bank a call and request to be sent a check for the balance. So I learned that you do not physically have to go in to… Read more »

Elle
Elle
8 years ago

When we had our accounts with Bank of America we had problems with bank fees, wrong accounts being debited, and rude customer service representatives to name a few issues. It just motivated us enough to make the switch.

Our personal favorite is ING Direct which we currently use for most of our banking needs. We were a little hesitant at first since it’s an online only bank, but we’ve been extremely pleased with their services. We started a savings account to try it out, but quickly added an Electric Orange checking account with it.

Kevin M
Kevin M
8 years ago

I use US Bank and have for years since they were the only local bank that offered a Health Savings Account at the time. Unfortunately our mortgage was bought by BofA so I have to deal with them. Their customer service has been responsive to my emails, but doesn’t actually do what I’ve asked so far (re-establish a monthly mailed statement since their e-mail alerts do not work). I don’t get the “lazy factor” especially for lower income people. I wouldn’t hesitate for a second to change banks if mine started imposing fees, even if they were a tiny %… Read more »

Laura
Laura
8 years ago

I haven’t had to switch banks since merger mania in the early 2000’s, but the last time I did, Citizen’s Bank gave me an incredibly hard time when I tried to close my account, asking for all sorts of ID and documentation to prove I was who I claimed to be, and stalled so long that I finally had to call for a manager (which they tried to avoid until I raised my voice so that everyone in the bank could hear me). And I’ve had friends who have had similar experiences with other banks (and with cable and phone… Read more »

Jess
Jess
8 years ago
Reply to  Laura

I closed my BOA account about a year and a half ago, and I was worried about this very thing. I really steeled myself up before I went into the branch. But the teller just cut me a check for the balance and sent me on my way. I think she might have asked me for a reason, but there was no hassle at all.

elorrie
elorrie
8 years ago
Reply to  Jess

I was a little worried about this too when I went to close my US Bank account. They did ask why I was leaving which was because I had moved away from any of their branches, so there’s not a lot you can argue with there. It was pretty mush hassle-free, but I had already moved most of my money and all my auto-payments to another account a while back.

Sharon
Sharon
8 years ago

I would love to bank with a local credit union (it’s the principle of the thing) but the last few credit unions I’ve banked with have had outdated websites with limited features and in some cases, lots of bugs. For those of us who do most of our banking online, this is a big deal. The last time I had a credit union account, I got so frustrated with the website that I closed my account and opened a new one with a big chain bank. It’s such a relief to be able to check balances and transfer funds on… Read more »

Laura
Laura
8 years ago
Reply to  Sharon

Sharon, do you have a good regional bank option? I’m in the Boston area and use Eastern Bank (which recently acquired Wainwright Bank which I had been using), and I’ve had a very good experience. At least here, regional banks seem to have good websites (and no-monthly-fee checking with direct deposit and decent customer service).

Thousand Yard Stare
Thousand Yard Stare
8 years ago

A few years back I put off changing from Wachovia to my CU but after the announcement of new fees I made the move on principle. Plus the CU pays 1.75% apy on my checking after jumping thru a few hoops but I should have been doing this all along.

Plus, I just started charging ALL my purchases on my credit card and paying the balance in full each month. Basically using their money interest free, hey, it all adds up.

Patti
Patti
8 years ago

I can attest that changing banks is NOT as painful as we perceive it to be. I moved my business from Wachovia/Wells Fargo to a Credit Union. The credit union offers the same services. I went into it thinking it was going to be a painful process but that was actually all in my head. I found it wasn’t. It was easy. I didn’t add all info into bill pay right away. As they came due, I added them. Since I don’t carry much debt this consisted mainly of utilities but it was easy. Do not think it will be… Read more »

Kathryn
Kathryn
8 years ago

Wonderful post, one of the best, most informative, and most through provoking I’ve ever read on this site. Thank you!

thefrugallery
thefrugallery
8 years ago

Beyond all of these factors, I think there are also people who wouldn’t even notice the fees if not for the publicity. Many people don’t balance their checkbooks or look at online banking. As long as there is money in the account, they don’t give it much thought. It’s scary to think how many fees were/would have been collected without consumers being any the wiser. Just another reason why people MUST look at their accounts.

Meep
Meep
8 years ago

One of the annoying things about switching is that if you and your spouse have joint accounts then you both have to come in together to close them. I just switched to a credit union, worth it but the process was long and rather painful.

Shawn G
Shawn G
8 years ago

My wife and I switched a couple of months ago when the CU offered us some money for opening a new account. It took time, but I’ve been pretty pleased with the switch. We still have our account at the old bank as a back up, but I’m not sure for how much longer.

Like others have said, you have to vote with your money and your feet. If you do not live your values, then it is going to be incredibly difficult to make change happen in this world.

Ingrid
Ingrid
8 years ago

I use four different banks for checking and saving. One of those is BofA. I keep a really close eye on my statement every month. Just had fees reimbursed for a new savings acct. not properly linked to other accts. Don’t like BofA, but my other half has been with them for over forty years. I don’t use on-line banking at all. Still write checks, which gives me a couple of days float, except when I pay cc and mortagage at BofA every month. Get float on all the other bills. I have had to wait up to half an… Read more »

Mary
Mary
8 years ago

I’m not sure I agree with you; I dumped our bank when they levied the fees and never looked back. I had been their customer for 20 years. The blog post I wrote (http://www.checkmatesystem.com/?p=572) was my most popular; it was written way before transfer day and by the reactions I received on a message board, I could tell that people were genuinely angry. The banks took a service we have to have and turned it into another tax. I’m not saying they shouldn’t be paid for their services but they’ve gone about it the wrong way for too long.

Marian
Marian
8 years ago

My husband & I pay the bills online with Bank Gloucester, a local bank, where we’ve done business for 32 yrs. We do not have automatic payments withdrawn; We manage the bills ourselves. If things are tight one month, we put off purchases, delay a charitble contribution or reduce our credit card pmt that month. If we wanted to change banks we wouldn’t have to worry about a float. We also have an acct at a credit union & been there 10 yrs+. We receive 3% int on our checking acct at Bank Gloucester (there are a lot of stipulations)… Read more »

Heather
Heather
8 years ago

As with most things, we all think it’s going to be a painful process, but it’s really not. I switched from Wells Fargo to a credit union (and I’m someone without too much of a cushion) and I didn’t have any problems. I made sure to find out when the automatic payments would switch over to the new account.

Now instead of me paying a bank, the credit union pays me!

elysia
elysia
8 years ago

I just dropped ING Direct and switched entirely back to my credit union. Interestingly, my credit union had just switched their bill payer system, so I’d had to update all those *anyway*. I had online billpay available with ING but no scheduled charges. If anyone wants to know, if you write a check and it gets deposited and cleared for the wrong amount, the Federal Reserve (so I am told) can reprocess the transaction for the proper amount. ING staff was unaware of this, it seems, and repeatedly gave me bad information and did not get back to me, despite… Read more »

babysteps
babysteps
8 years ago
Reply to  elysia

Many years ago (20) I helped my first boss unravel an incorrectly cashed check. Had to track exactly who had the check (in those days, physical checks often traveled through several banks from writing to final payee) and find the error (took about 4 months), and then get them to issue a correction (another 2 months).

Hopefully it’s not quite as bad today!

Amy
Amy
8 years ago

Switched banks from Chase to Wells Fargo last year when we moved, since WF bought our mortgage and they had branches closer to us than Chase. We were thankfully in that group that always has a hefty savings account, so we could afford to take our time switching banks. Set up the new one and funded it, left our paycheck direct deposit still going to the old one till the very last payment was switched over, confirmed over the course of 2-3 months. Then we switched over the direct deposit, left the old one open with some funding in it… Read more »

Anthony
Anthony
8 years ago

A banker perspective (Community banker that is). On average it costs a bank $200-300 annually to maintain a regular consumer checking account; which includes staffing branches, atms, online banking, statements, etc. When you consider that BofA wanted to charge $5 a month for a debit card and about $10 a month in maintence fees, at best they might break even. The real Irroney of the debit card fee deboccal(or a genesis busines move depending on your point of view) and the move your money campaign is that it actually helped BofA’s and the other big banks bottom line. The majority… Read more »

barnetto
barnetto
8 years ago
Reply to  Anthony

Thanks for the numbers, Anthony. It inspired me to try and find numbers for my specific CU. I went to my credit union’s website and found their financials for the previous month. They claim to have 40,000+ members and listed operating expenses as (1,769,591). So if I divide that by 40,000 then the per member cost of running the bank is $44/month, or $528/year. But their “TOTAL OPERATING INCOME” was $2,477,143, so it looks to my eye that things are comfortably in the black. Their year to date number averages out to profits that are close to that, so this… Read more »

Anthony
Anthony
8 years ago
Reply to  barnetto

To answer your question let me first provide some background. The balance sheet of a bank is confusing because it is backwards from a regular business. Both banks and CU (CU’s are really just nonprofit banks so they don’t pay taxes) take in customer deposits (Liabilities) and turn them into loans (Assets); making a profit on the spread between why they pay for the deposits and the high rate they receive on the loan. The deposits a bank/CU holds are a liability to the bank because they have to pay that money back to the depositor and they compensate them… Read more »

barnetto
barnetto
8 years ago
Reply to  Anthony

Thanks, very informative. Just one thing I still don’t understand: why the most unprofitable people are the only ones supposedly switching. Maybe other people know the answer to this too, but why would having your loan with a bank prevent you from switching your checking and/or savings to another bank? I know my BF has his home loan with BoA (because they bought out whoever gave him his original loan), but nothing else. I don’t understand how this ties anyone down. And how does bill pay make money for banks? Do they get a cut when you pay your bill… Read more »

Amber
Amber
8 years ago
Reply to  Anthony

Anthony, thanks for the informed comment.
I had my mortgage with BoA prior to bank transfer day, and as the decision time came on whether to refinance through a different bank or stick with BoA’s offer, I switched.
I was definitely influenced by the public outrage and didn’t want any more to do with BoA. They lost thousands of dollars from my mortgage alone.

KD Davenport
KD Davenport
8 years ago

I have a checking account with Wells Fargo, and I am wondering what I’m missing–I don’t believe I am being charged any fees. I don’t overdraw or do online bill-pay, and there’s no minimum balance on my account. I do have my paycheck direct deposited. I check my statement pretty regularly and I’ve never seen any fees or charges. Is there something I’m not seeing (as far as fees are concerned)? I know there are ethical issues but that’s another conversation.

Rosa
Rosa
8 years ago
Reply to  KD Davenport

If you’re checking and not seeing fees, you probably don’t have any. But it’s worth reading the small-print change notices they send packed in envelopes full of advertising, to watch out for changes.

Colleen
Colleen
8 years ago

It’s really a shame that we have all become so apathethic! It’s EXACTLY why the 1% has control now. We would rather let the BOA’s of the world dictate to us just because it’s inconvenient, takes time away from TV watching, we’re lazy (or whatever). Wake up 99%!!!! Pretty soon they will be telling you how much money you can make, what kind of car you are allowed to drive, what you can eat, where you can live and more! The whole bank bailout was just a test to see if we are paying attention and care. Are you? Do… Read more »

Mike
Mike
8 years ago
Reply to  Colleen

Really, are we reduced to class-ism here? We’re talking here about taking personal responsibility for our money and the freedom of where we leave it and use it. If you want to push the point then freedom and responsibility of your money by you is a “Conservative” ideal, not a “Occupooper” ideal. BOA accomplished what they wanted, getting rid of troublesome customers which saves them much more money in the long run. They will get that money from their current customers (Illegal Aliens included ref:CNN, LA Times) in other ways. I moved from BoA to a CU five years ago… Read more »

Krantcents
Krantcents
8 years ago

I think you really have to be unhappy to change banks. The debit issue with Bank of America was a public relations issue more than reality.

Bill
Bill
8 years ago

This is easy:

Use one credit card to pay bills and rack up points, dollars, miles etc. Use any bank account to pay the card off in 21 days no fees, interest etc…

Luke
Luke
8 years ago

I switched from BofA to USAA about a month ago and I’ve been very pleased so far. I’d been considering switching banks for some time but was dragging my feet b/c I already had direct deposit and several automatic payments on my BofA account. The switch ended up being easier than I anticipated though there was a 2-3 week period where I had to keep cash in both accounts while payments cleared. I save at least $10-15/month in fees and the customer service is much better at USAA.

Nathan
Nathan
8 years ago

I’m not a fan of the big banks, I’ve done some bank switching myself. Still, I don’t understand why people are trying to demonize the big banks. They are in business to make money like all the other businesses. I’m sure they did the math and said, “A customer who doesn’t keep at least X thousand dollars in their account is costing us money.” And then they came up with a fee that would make that account profitable. If the customer pays it, they’ll be happy to keep him, if he doesn’t, they they’ve gotten rid of a customer that… Read more »

Heather
Heather
8 years ago
Reply to  Nathan

I’d like to add to it, the employees of all these banks in your town are your neighbors too. The big banks do not bus strangers in from somewhere else every day to man those branches. The managers and tellers live in your community and their salaries come back into the local economy. I have banked with a variety of banks both professionally and personally and I have stayed with one of the big banks because I get great local service backed by the huge resources such as great online bill pay service and access to our money all over… Read more »

Luke
Luke
8 years ago
Reply to  Nathan

Nathan, I agree. Banks, just like any other business, have a right to charge fees and make a profit. And I as the consumer have a right to decide if those fees and services are worth my time and hard-earned money. I’m not “mad” at BofA for charging fees. I just found a bank that charges less, so I switched. Simple.

Kurt Fischer
Kurt Fischer
8 years ago

The prospect of changing banks can feel daunting. My suggestion is to use the same method that helps with any task that feels large and complicated: Don’t think of the task as a whole; instead think of and tackle one small step at a time. First, open an account at your new bank or credit union. No need yet to close your old account. Then as each bill comes due, set it up with your new account and pay it from there. The natural spacing of bill due dates will spread out the work of transferring accounts. Keep the old… Read more »

Jason
Jason
8 years ago

I use BoA, I am not far past living paycheck to paycheck, and watch my accounts regularly. I have yet to pay any fees. Plus, with the Keep The Change, I actually come out ahead.

So, in short, I pay no fees, plus make a little scratch. Why do I need to change banks again?

Jeb
Jeb
8 years ago
Reply to  Jason

How do you make money off of Keep the Change? My understanding is that it’s simply rounding your purchase and moving money accordingly. For example, if you make a $1.50 purchase, it rounds it to $2, takes that much out of checking, and puts 50 cents in a savings account. That’s not making money.

Jason
Jason
8 years ago
Reply to  Jeb

i apologize, I meant they match for the first three months, so no fees plus that match puts me in the positive.

Alex
Alex
8 years ago

No wonder so many free offers with opening a bank account come with a requirement of making a specific number of online bill payments to get a freebie (I got my iPod Touch after making 3 bill payments a month for 3 months). I only have credit cards linked to my bill pay so it would be hardly a hassle for me, but I can see how costly it could be for someone who links all their bills to one account.

Nick
Nick
8 years ago

I’ve been writing quite a bit aboutmy recent frustrations with Bank of America. I have joint and linked accounts with two cards and two people, so I need quite a movement to change. But one of my near-term goals is to transition out of BofA. I don’t pay fees, but am frequently annoyed by policies that don’t make any sense (like the one discussed on my posts liked here).

Ann
Ann
8 years ago

I already use a local bank and a union bank that’s not local, so I didn’t have to change banks. BUT am I the only one who finds that the recipients of the bills being paid can cause trouble as well as the banks when changes are made? I pay most of my bills automatically on credit cards, and these cards change expiration dates (and sometimes numbers and even banks!) quite often. When this happens, I have to notify the recipients, and there’s often a problem. Once when a credit card changed its expiration date, it took Cablevision 6 months… Read more »

Anna
Anna
8 years ago

Foo on this noise. I changed from BOA to a credit union today and I’m already much happier with my decision.

LennStar
LennStar
8 years ago

For alle Americans out there: Banks can be cheaper. I’m from Germany, and I pay nothing for my bank accounts (yep, more then one). Most banks here have free accounts, at least if you have a regular income. Transfers cost nothing. Checks aren’t used, even big businesses often don’t accept them anymore. You can do all your needs with a) real money (thats normal here) or with a debit card, which is also often free for your acount (or at a minimum sum like 10€ a year). At my online bank I get 1,6% in the normal account if there… Read more »

Heather
Heather
8 years ago

I got great results switching banks by canceling ALL automatic payments, switching direct deposit, paying bills manually as they were due until deposits switched, then setting up automatic payments with the new account. Switching is definitely not a one-day deal for accounts with bill-pay, but it was worth it. For the account without bill-pay, it was easy peasy. Walk into one, close the account, get the cash, walk into the other, deposit, done.

Jaime
Jaime
8 years ago

I don’t agree either that “it takes too much time and it’s too complicated to switch.” These days all banks and Credit Unions have switch kits, and corporations also make it easy to switch direct deposit accounts if you are switching banks. How hard is it to fill out a new direct deposit work form for your paycheck to go to a new account? If you’re an organized person then it’s not hard at all. How hard is it to sit down and make a list of where your bills are going? Rent Food Utilities Insurance Entertainment etc. I don’t… Read more »

Molly (Mike and Molly's House)
Molly (Mike and Molly's House)
8 years ago

When I was in over my head with credit card debt I dealt with B of A, Chase and Capital One. What I learned was even though I paid my cards on time I was NOT a valued customer. All of them had there nickel and diming or at some point would attach a paid service that I had not requested. I love that they were so clear on how much they did not appreciate me because it spurred me on to pay off my debt to them faster and close the accounts. I really wanted to be without a… Read more »

Zanne
Zanne
8 years ago

I use a bill pay method I didn’t see referenced in the comments – it’s called mycheckfree.com. The site sends me emails for each bill I have set up on it, and I go to the site and pay the bills from my checking account. I used it to begin with because my bank charges for bill pay and I wasn’t paying for that, but this service is free to me. I am pretty sure the creditor is paying for it, but I don’t see a specific fee for the service. I have complete control over when, how much, from… Read more »

A-L
A-L
8 years ago

I had an account with a big bank (it bought out a local bank) and I was pretty happy with it, with the only bad thing being the ridiculously low interest rate. But all of the BoA hoopla made me investigate other options, and we’ve opened up an account with a credit union that pays us 4% interest. There are a few (simple) hoops to jump through to get it, but going from virtually no interest to 4% was too tempting to resist. We did not completely close out our other accounts at the big bank though. Should we ever… Read more »

John G.
John G.
8 years ago

For the record, I have changed banks a few times, all based on a fee I didn’t like. I have no issue changing banks like underwear.

shawmutt
shawmutt
8 years ago

I have as many accounts as possible piped through my rewards credit card, get 1% back on bills, and pay off the credit card online each month. I started doing that after I switched banks the first time.

I’m currently going through Charles Schwab bank. Not only is everything fee-free, they reimburse any ATM fees I pay to other banks for money withdrawal.

Going through an internet bank was sort of strange at first, and I was a bit nervous–but other than small inconveniences (not able to deposit cash) it’s not bad.

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