NEW YORK (MainStreet) – Bank of America customers are angry. In the wake of the bank’s decision to implement a $5 monthly debit card fee starting next year, a poll conducted by our sister site TheStreet found that 83% of readers are promising to leave the bank.
How many of them will actually make good on that promise is an open question. Experts we spoke to said that many of those grumbling about the new fee will ultimately decide to stick with the bank and adjust their spending behavior. The number-one reason that people will stay put? The difficult, complicated process of switching banks.
“The time [and] mental energy required to change banks may be a greater cost to consumers than what they’ll lose on fees,” Kit Yarrow, a consumer psychology expert, told MainStreet.
Still, some people will be angry enough about the fees to brave that process. And it’s not just Bank of America: Wells Fargo is also experimenting with implementing similar debit card fees, and other large banks have raised other fees on checking accounts in response to the Durbin Amendment, which capped debit card swipe fees and cut into big banks’ profit margins. If fees are driving you to switch banks, here’s what you need to do.
Choose a New Bank
You’re not going to just march down to your bank, cancel your account and stuff all the money under your mattress. There are loose ends to tie up before you close up shop – checks that need to clear, for instance – so you’ll want to be established at a new banking institution before you can actually go through with the process of closing your first account.
“If you do it hastily and just close your account, you could run into headaches,” says Paul Golden of the National Endowment for Financial Education. “Open a new account before you close the old one.”
Where you choose to open that account is the big question.
As we’ve said, Bank of America is by no means the only major bank implementing fees on checking account holders. The big banks are expected to lose around $6.6 billion a year due to the Durbin Amendment, and they’re all searching for ways to make up for that shortfall through fees on checking accounts. In some cases those fees are easily avoided so long as you have direct deposit and a minimum balance; in the case of Bank of America, you can only duck the new fee if you stop using your debit card at merchants, which many customers aren’t willing to do.
As such, look at your own spending behavior and determine whether you’ll be able to duck the fees at the new bank you’re thinking of joining.
“Determine qualifications for ‘free’ checking – they may have a minimum balance requirement or [require] automatic deposits,” says Susan Chesney of Integrated Planning Solutions, a financial services firm. “Check all other potential fees charged, and ask if the new bank is considering charging any new ones.”