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Why consumers don’t switch banks

By David McMillin · Bankrate.com
Friday, July 27, 2012
Posted: 6 am ET

While plenty of customers have parted ways with the banking industry over the past year, it looks like many disgruntled account holders aren't doing anything about their frustrations.

A new Consumer Reports survey of more than 1,100 account holders shows that nearly 20 percent of all banking customers have considered moving their money to a new financial institution within the past year. However, when it came time to make the decision, nearly half of those customers didn't actually switch banks.

What were some of the main reasons these account holders cited for staying with their existing banks?

  • Concerns about the trouble it would take to transfer all their automated payments and deposits to a new account.
  • Concerns that the process would take too much time and effort to complete.
  • Aversion to paying any fees to transfer their own money.

Switching banks isn't easy. If you're a regular reader, you've probably read some of the horror stories of zombie accounts reopening due to account holders forgetting to rearrange all of their automatic payments and direct deposits. Even if you're able to close your account and open a new one without problems, it still requires time and energy. Bank switching can cost you a lot of money, too.

If you're truly unhappy with your banking relationship, though, I think it's worth the work to determine where you can find the services and tools you need for your personal finances. Make a list of what's important to you in your financial institution, and then, compare different account terms, interest rates and consumer reviews. From big banks to community banks to credit unions, there are plenty of options. Sure, the short-term hassles and potential fees are an obvious downside. However, if it means you'll be able to avoid fees and reap the benefits of better customer service, it can pay off in the long run.

What do you think of these survey results? Have you considered switching banks within the past few months?

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3 Comments
Buz Davis
September 04, 2012 at 12:07 am

The other day I had occasion to use two different BOA ATMs within a few hours. The second one presented a message like "temporarily unable to distribute funds", but gave no clue as to why. (Was it out of cash, or had I gone over some limit of daily withdrawals ? ) Couldn't the error messages be more informative ? Please?

J Lutgring
August 07, 2012 at 3:10 pm

I wish BofA would adapt the solution Citibank has launched which allows the customer to make check deposits by scanning them into their mobile device then transmitting that info to the bank. That's convenient (and a lot safer at night) than going to any ATM.

Ray
July 27, 2012 at 10:23 am

The survey results do not surprise me. Lots of folks complain, but when it comes to doing the work required to correct the situation they are in, they'd rather spend time picking out which flat screen tv or smart phone they want to buy.

Switching checking accounts in my estimation requires about 60-90 minutes of work spread over a couple of weeks if you do it efficiently. Many bill payments you set up do not require a mailing address (for example, Discover Card, Target, American Express), just the account number. What's your take home pay after-tax? How much money will you save/earn when you make the switch? Do the math.