How to Break Up with Your Bank
Chatzky, Jean, Newsweek
Byline: Jean Chatzky
After consumers raged, some banks are trying to beat a quick retreat from hidden fees. Still unhappy? Here's how to switch.
Consumer fury may have some banks rethinking their new debit-card fees for now, but rest assured financial institutions are still devising new ways to part you from your money. And when they succeed, you might consider taking your banking business elsewhere. Unfortunately, switching banks is an administrative nightmare, particularly for people who bank and pay bills online. This is by design.
Banks sold the idea of banking online as a convenience for consumers. But make no mistake, the real point of this exercise was to improve the banks' profit margins. The more business they could move out of the branches, the bigger the boost to the bottom line. It worked. Consumers who bank online save banks $167 per person per year, according to Javelin Strategy & Research.
But banks also understood that, done right, online banking could be a very sticky application--one that could make consumers incredibly reluctant to switch banks. Typical consumers have 40 to 50 payees entered for their accounts, says Javelin's Mark Schwanhausser. However, even a very dedicated online-banking customer uses only eight to 10 a month. But the perception that you'd have to sit there for hours reentering all that information makes consumers reluctant to switch. Even worse, you have to contact all those billers who swipe money out of your account automatically. …