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4 Tips on When It’s Time To Open A New Bank Account

By Mark Riddix

Leaving your old bank is never easy. You have to change all of your bill payments, cancel automated transactions, and switch your money over to a new financial institution. It just seems like a time-consuming hassle. While it would be great to never have to leave your bank, there are some times when you need to find a new home for your money. If you are on the fence about whether or not it’s time to leave your bank, keep reading.

If your bank engages in any of these four practices, then it’s time to start shopping for a new bank:

1. Poor Customer Service

Do you have a difficult time getting a real person on the phone when you have a banking problem? When I did most of my banking at Bank of America, it was almost impossible to speak to a live customer service representative. Automated customer service help is aggravating when you need a question answered right away. There was a time when pressing the “0” key would take you right to a customer service agent. Companies have caught onto that trend and this tactic works less and less. If you cannot speak with a live person, then it’s time to find a new bank. You don’t want to be placed on hold forever when you have a real banking mishap.

2. Tight Restrictions

Is your checking account balance slowly going to zero because of bank fees? It doesn’t matter if you use your account or not, some banks are sticking it to their customers with fees: inactivity fees for not using your account enough, account maintenance fees for not keeping enough money in your account, customer service fees for going inside the bank and speaking with a teller. If you are being charged every time that you perform a transaction then take your business elsewhere.

3. No Leniency

There should be some benefit to being a long-time banking customer. If you have never overdrawn your account or missed a payment then your bank should have some leniency with you when this occurs. One of the biggest tricks in the banking industry is when banks claim that they are unable to reverse charges on you account. Don’t believe this! Banks can forgive fees if they want to. If your bank values your business, they will not slap you with a bunch of charges for one transgression.

4. Overdraft Fees

Is your bank still hitting you with massive overdraft fees? Banks were supposed to stop those practices of excessively billing customers. Some banks are still deliberately processing large transactions first and smaller transactions later in order to have more opportunities to charge you the overdraft fee. This is illegal, but some banks are still engaging in these practices. Either opt out of overdraft protection or find a bank that has a sterling reputation. Whatever you do, you need to avoid bank overdraft fees at all costs.

Final Thoughts

The lowest transaction costs and best customer service can be found at local banks, credit unions, and some online banks like Ally Bank and ING Direct. Most commercial banks are just too large to offer quality one-on-one customer service, yet why do we stay with commercial banks?

Are you satisfied with your current bank? If not, then what is motivating you to stick around there?

(Photo credit: Omar Omar)

Mark Riddix
Mark Riddix is the founder and president of an independent investment advisory firm that provides personalized investing and asset management consulting. Mark has written financial columns for Baltimore and Washington, D.C. area newspapers and is the author of the book, Your Financial Playbook.

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