A Consumer Reports survey found that one in five consumers with checking accounts have considered switching to a new financial institution over the past twelve months. The survey asked those who considered switching, but didn’t, to identify the reasons they didn’t switch:
- 63% cited the trouble of transferring automatic payments and deposits
- 37% said the switch would take too much time and effort; and
- 28% didn’t want to pay fees to transfer their money
Here, two NerdWallet employees document their experiences taking their wallets from big banks to credit unions. Both switchers were pleasantly surprised by the ease and speed of opening a new account at a credit union, noting that it took both of them under a half hour. Both also reported that the credit union bankers did not attempt to upsell them into higher-level accounts.
Divya, Bank of America to San Francisco Fire Credit Union
I opened my Bank of America account when I first went to college. The first thing they did was sign me up for the wrong kind of linked savings account even after I specified that I wanted the free student account. I was charged $12 a month for three months before I noticed. At that point it was January, and they said they were sorry but told me they couldn’t refund two months of my money because it was technically last year. But why? I asked. That makes no sense! It was your mistake, not mine. The teller made a few it’s-out-of-my-hands shrugs and ushered me out. My attempts at assertiveness were to no avail; $24 I had earned from working at an ice cream store had disappeared into an abyss as mysterious and arbitrary as the Disney vault.
At that point I didn’t know what credit unions were. I vaguely knew that big banks were bad, that they were full of alleged corruption and hidden fees and fee-gouging overdraft practices. I wasn’t sure what the alternatives to big banks were, other than burying my money like a pirate. Later, I became increasingly aware of the alternatives as credit unions sprung up, sparking media coverage for their focus on customer service, transparent fee structures, lower fees, and community-oriented member-owned structure.
The incentives not to switch were strong; for months, laziness and complacency stopped me from walking twenty minutes to a credit union and encouraged me to go across the street to that glowing demon, the Bank of America ATM. Reasons not to switch were abundant: my account had automatic bill payments already set up, I had four unused checkbooks, my checking account was linked with PayPal, etc.
Reasons to make the switch were compelling as well. There was the impending automatic upgrade from my free student checking account to something that was decidedly not free, the blatant misuse of financial power in the Libor scandal, increases in overdraft fees and checking fees, and the sense that banks cater to customers with lots of money while taking advantage of customers with little money.
So I had had enough; I took my savings to the San Francisco Fire Credit Union. The wait time was less than five minutes, and I met personally with a kind, relaxed man who explained the accounts clearly to me without advocating anything or attempting to upsell me. I now have completely free checking.
The account is simple and great, with no fees and unlimited surcharge reimbursements for using out-of-network ATMs. More importantly, the employees were friendly, knowledgeable and efficient. They even notarized a form I had brought. Plus there were bowls of candy everywhere.
My advice to those looking to make the switch is to go slow. Take time to research your new credit union, and give yourself time to transfer your accounts over. I’m keeping my Bank of America account open until my direct deposit paychecks and automatic bill payments fully transfer, and until the check I wrote to myself to transfer my money processes.
The Consumerist reported that banks make it difficult for consumers to switch; my advice is just don’t tell them you’re switching. I wrote myself a check and cancelled my automatic bill payments, and they won’t be aware I’ve switched until I go in to cancel the empty account.
If we dislike our large financial institutions enough that one out of five checking account holders wants to switch banks, then it’s time to collectively wield our consumer power and put our money in the hands of community-focused credit unions. Setting up my new account took a total of a half hour and was entirely painless.
John, Wells Fargo to Redwood Credit Union
I’ve been a Wells Fargo customer since my parents opened an account there when I was 11. At first it was just a joint savings account with my mom. When I got a job in high school, it was a natural next step to get a checking account there as well. I opened my first credit card with Wells Fargo when I went to college.
While I hadn’t personally experienced any banking horrors over my years with them, Wells Fargo and other big banks seemed to be repeatedly featured in the news for negative reasons. My parents complain that they would rather take their business somewhere else, but they feel too entangled by multiple accounts and services at this point.
The transition for me on the other hand, was much smoother. I stopped into Redwood Credit Union on my way into work and sat down with an employee to become a member. The accounts and requirements were simple to understand, so I chose to open the most basic savings and checking account first to establish membership. Over time, I can transfer various recurring deposits and payments to the credit union from my Wells Fargo accounts.
The experience was quick, pleasant, and actually quite relaxing. I definitely can’t say as much about the few times I’ve had to sit down with a banker at Wells Fargo (no I would not like any other services, no I am not interested in a loan, no I do not need another checking account…). What struck me most was that, while waiting for my forms to be printed, a woman walked in, approached a teller, and was greeted by name. Good luck getting that kind of welcome at the big banks.
Check out our update 3 months later!