Banks: Are They Evil?
Are you one of those folks who have just had it up to here with banks and bank fees? If so, what are you going to do about it?
Before you make changes you may regret later, take a minute. Study the issue. No emotion allowed.
Is it "Time" to change banks?
What’s your gripe with your current bank?
- Do they charge for use of a debit card? (most of these fees are being withdrawn faster than a reality star can get divorced….)
- Do they charge too much for processing checks?
- Do they have poor customer service? You know CS is bad when you could play a complete game of Monopoly while you’re on hold or can have a conversation with your one year old that’s easier to understand….
- Do they block your credit card when you’re using it, but allow a crook to use it with ease?
- Do they charge too much for ATM use at other institutions?
- Are their overdraft fees, and other charges, non-competitive?
- Are you just mad they were bailed out and you weren’t?
If the answer is no to these questions, quit worrying about your bank. If you don’t write bad checks, and have no problems with your current bank, then go have fun.
Don’t let all this media hype about banks ruin your day. Remember, they are just a tool to help you manage your money.
Changing Banks:
If you do want to change banks, what should you do?
Analyze your needs and go for it.
Here are a few banking choices and their pros and cons.
Locally owned banks:
Locally owned banks are booming with all the angst about the big banks. I use a locally owned bank myself, and am also a small shareholder in a local bank. But local banks do have limits.
- They usually aren’t on the cutting edge with new technology.
- They usually don’t pay as high an interest rate as online banks.
- They may have limited services. No trust department or investment advice. (which isn’t necessarily a bad thing)
- Their fees may be a little higher, as their fixed costs are higher.
Locally owned banks do help your local economy. They provide jobs, and their success helps your community grow. The shareholders are usually your fellow community members. If you want to look for a locally owned bank, check out this search page at The Independent Community Bankers Association.
Credit Unions:
- Are non-profits and usually have lower costs.
- Some Credit Unions limit membership to certain groups, though this is less common than in the past.
- May be able to loan money based on your personal history rather than just looking at a credit score.
- Like smaller banks, may not have the latest technology such as smartphone apps and interaction with Quicken or Mint.
- May have great credit card rewards-I’ve got a 5% cash back on gas credit card with Pentagon Federal Credit Union.
Both locally owned banks and credit unions are not going to have a branch on every corner like Bank of America or Wells Fargo.
If you do most of your banking online, that may not matter. If you go to your safe deposit box to check on your Double Eagle gold coins once a week, just to feel them tinkling between your sweaty palms, having to drive across town may be a pain in the a$$.
If you have don’t have payroll direct deposit and the only local bank or credit union is 45 minutes away, then you may just need to put up with the Too Big To Fail guys.
Mega-Banks:
These large banks have their issues, but you have to admit it’s nice to:
- Have a branch seemingly on every corner.
- Easy to use online and automated banking services.
- Easy to find ATM’s.
- Easy syncing with Quicken, Mint, or other money management/budgeting software.
I don’t have access to a large Too Big To Fail bank in our small town, so I can’t rank them from personal experience. But many of my friends love Wells Fargo.
Online Banks:
The online banks, such as ING, Ally, HSBC and others have great rates compared to Brick and Mortar banks. But you do have to be techno-competent. Here is a great link to start your research on online banks.
- Check for specials/deals/rewards-do your due diligence to make sure you get a good fit.
- They will usually use only the numbers to make decisions on loans, unlike a local bank who may have leeway if they know who you are.
I have an automatic savings account with ING and so far have no complaints about their services.
Changing Banks Summary:
Don’t let all the current media attention about banks cause you undue worry or concern. If you are happy with your bank’s customer service and fees, ignore the constant banging of drums.
If you want to punish the big banks for their part in nearly bringing the US economy to a depression, then close your account and invest with the locally owned bank nearby, or one of the other choices mentioned above.
Just make sure when you open your new account that all the transactions have been closed on your old account before you close it. Otherwise, you may have a late fee or overdraft fee as a reminder of why you left in the first place!
Reader Questions:
What say you? Have the latest so-called outrageous bank fees made you close an account? If so, where did you go?
{photo credit: taberandrew c.c.}
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