National Bank Transfer Day is tomorrow, and Better Business Bureau is encouraging customers to use this opportunity to close bank accounts that charge unfair fees or offer poor customer service and explore other options.
The idea to encourage people to close their bank accounts with big banks arose when Bank of America announced it would be creating a $5-per-month fee for customers using debit cards. Bank of America has since backed off the idea, but the flood gates are open.
Consumers are already evaluating their banks and choosing to move to rosier pastures.
According to the Credit Union National Association, customers are already moving to credit unions in large numbers, with 80 percent of the association’s members seeing increases in accounts since Sept. 29, the day Bank of America made its announcement.
Most consumers shy away from closing a bank account because they think it will be too much of a hassle to switch their direct deposit and automatic bill payment services. However, most of those processes are very easy and take only a few minutes.
If you’re thinking about closing your bank account, take the following steps to ensure the transition is smooth and hassle free:
- Find the right bank or credit union. Contact at least three different financial institutions to compare fees, services and other factors such as branch and ATM locations. Evaluate each criteria based on your own situation. An online bank might not work for someone who has to cash a paper check every week and someone who constantly travels might want to avoid a local credit union that doesn’t have a large network of ATMs. Read account information closely to check for hidden fees and other limitations that might make you regret the move.
- Start with trust. Check out your new bank or credit union’s BBB Business Review at www.bbb.org. Some unwary customers may find they have jumped from the pan to the fire with their new accounts.
- Open your new account first. Leave some money in the old account in case you forget to switch an automatic payment or have pending purchases. Once you’re sure everything has cleared, close the old account.
- Switch your direct deposit. Make sure you fill out all the necessary forms with your human resources department to have your paycheck and reimbursements sent to your new account. If you’re on Social Security or receive other government benefits, be sure to contact the issuing government agency.
- Make a list of your bills. Take a few moments to list all of the bills that use automatic bill pay services, how much those bills typically cost and when they are due. Make sure your new account has enough money to cover the total amount before switching those accounts. Don’t forget services like PayPal and Amazon.
Are you planning to switch banks tomorrow? Or have you switched bank before? Share your stories with us.