Switching Banks – Sometimes we Have to Switch Banks
Switching Banks doesn’t seem to go together like milk and cookies or hamburger and French fries. But, you will see in a moment why you are powerless when it comes to banks.
You may not consciously know it but I’d bet your subconscious knows fees are the answer. In the industry they call it switching costs. Switching costs are the amount of money and time it would cost you to switch from one bank to another.
In real life it works this way. Your bank just fouled up a deposit and you became overdrawn. This happened to me so I can relate it to you. I was furious but I was also powerless until the automaton known as a teller could or would fix it.
I swore under my breath I would switch banks this very afternoon after the problem was resolved. It took 30 minutes but the problem was resolved. I was not charged overdraft fees and the world was made right.
As I exited the bank, my desire for switching banks was muted. I was still a bit unhappy but I didn’t move my account. After all, I reasoned, mistakes do happen.
Tell me that never happened to you and I’ll shake your hand and say congratulations. That isn’t the only reason you are powerless. Banks know that even the minimal amount of customer service will keep you. They prove that every day.
Here is where the glue becomes binding. They have instituted two programs that keep you coming back over and over and over. They are direct deposit and automatic bill pay.
These two services alone make it extremely difficult for switching banks. First, the automatic bill pay service. You have become so accustomed to using this service you practically forgot about it. The bank hasn’t.
They know how difficult it will be for you to re-align all of your automatic bill pay accounts with the new bank. They know you may not successfully coordinate all of the payments to be sure you aren’t late.
Take your mortgage for example. If you are late, you incur a fee. You may also incur a ding on your credit report. You don’t want that so you think long and hard before you move from bank A to bank B.
In the United States, almost 50% of the citizens live paycheck to paycheck. They also have their paycheck on a service called direct deposit.
Think about switching banks with your paycheck on direct deposit. The results could be stifling. It becomes a high-tech military maneuver for switching banks when your check is on direct deposit.
If you mess up with your timing, you could incur an overdraft or insufficient-funds fee. If the direct deposit was transferred too early relative to the automatic bill pays, then the old account would be in jeopardy of a negative balance. If it was too late, then the new account would be.
I bet you can see the trauma your brain deals with when you think about switching banks. Remember my story at the opening of this article? Well, they messed up again and I ended up switching banks.
I simply could not cope with two huge gaffes within the space of three months. Switching banks was my only option and I took the plunge. You have to decide if switching banks is right for you but it was right for me.
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