I Don't Like My Bank! When Should I Close My Checking Account?
If you have had trouble with your bank, late fees, monthly account fees, or bounced checks you may be considering switching banks. Before you make the decision to switch, you need to determine what caused the problem, and if it was your bank’s fault or your fault. If it was your fault, you need to change your behavior or it will happen again at your new bank. Remember you are not trapped at your bank, there are always other options available.
Here are five reason, you may need to open an account at a new bank.
Monthly Service Fees
If you are charged a monthly service fee, you may want to consider changing banks. Before you do this, you should call your bank and see if they offer an account without the service. You may have an account with a high minimum balance requirement and switching to an account with a lower minimum balance requirement can actually save you money. You may not get free money orders or travelers checks, but do you really use them enough to warrant paying the service fee? Additionally, see if your bank will waive the fee if you have direct deposit to your account. If this is the case, you may want to see if your employer is willing to offer direct deposit. You may also be willing to switch banks in order to qualify for lower interesting on a mortgage or a car loan. This can offer significant savings and it is definitely worth considering.
Break the Overdraft Cycle
If you have gotten into a cycle of returned items or being overdrawn, you may want to change banks to make the mess go away, but that will not solve the problem. You need to become more responsible with tracking your spending and using your debit card. You will still need to clean up the mess at your current bank before you open another account or you risk being reported to ChexSystems.
Before you make the switch learn how to balance your checkbook. It may be worth investing in financial software so that you can track your spending and stick to your budget throughout the month. Banks can check to make sure that your account is in good standing at another bank. It is important to bring your current account into the positive before you make the switch.
Poor Customer Service
If you want to switch because of poor customer service, moving or not enough locations, these are all valid reasons to switch. It is often easier to open your new account, and begin transferring your direct deposits and automatic withdrawals to your new account. It will also give you time to stop all activity in your old account before you close it. As you look for a new bank think about the accounts offered and fees associated with them, bank and ATM locations and bank size. You will often get better service from a smaller bank. Additionally, credit unions are the most customer friendly in policies and accounts. You can compare the different accounts and fees online. However, if you had issues with customer service in the past, you may want to visit your nearest banks to determine if the new bank will be a good fit for you.
Shopping for a New Bank
If you decide to open a new account you should shop around for a bank that will best fit your needs. Open your account at your new bank before you close your old account. This means you will have accounts at multiple banks for a short period of time, but it will make it easier to transfer all of your payments to your new account. You will need to be sure to switch over all of your monthly transfers, automatic drafts and direct deposits. When you close your bank account, you need to do it in person or in writing. It can take time, and it is a good idea to have all of your payments and deposits transferred for a bit before you actually close the account.Allow yourself a month to make sure that you did not forget a an automatic draft. This can save you a lot of headache with bounced payments.