The ease of switching banks

By David Pilley on August 2, 2012

Ending a relationship is never easy, especially when the relationship has lasted many years. I started banking at Wachovia in 2005, and they got me through the many ups and downs of college. When somebody stole my bank account number, I called Wachovia, who immediately cancelled the card and sent me a new one in a week’s time. I never had any problem with the company or any of its employees.

Then, Wells Fargo bought Wachovia. The people didn’t change (at least the ones who stayed), but the policies did. Some transactions took an extra day to process or to show up in my online account. I had money taken from my high-interest savings account when I didn’t use my debit card over a period of time. Once they started charging customers for not having a certain amount of money in their checking accounts, I realized I’d had enough. I had to end the relationship and find a new bank!

Switching banks can be a difficult decision, but the process is actually quite simple. First, you need to determine why you want to switch. It may be that you do not like the high fees for certain actions, like an overdraft or simply having an account. It may be that you are moving to a place that does not have a branch of your bank. Mostly– since more regulation came down on limiting the amount banks could charge for overdraft—it will be because of the fees. The $5 and $7 checking account fee Wells Fargo now charges can be avoided by having at least a $500 direct deposit each month, having at least $1,500 in your checking account at all times, or by using your debit card at least ten times a month. This is a regressive economic policy, as the company is rewarding those who have a lot of money and punishing those who are not able to maintain a high balance in their checking accounts. Having less than $1,500 and not having a $500 direct deposit and not making ten purchases a month with my debit card does not mean I am lazy and less important than anyone else, but the extra fee certainly makes me feel less important. That’s a good enough reason to leave!

The next step is to make sure all transactions are complete. I was going to close my accounts on July 31, but I received a direct deposit, and it took 24 hours to process. When August 1 came around, the transaction was no longer pending, and I didn’t have any other transactions happening, so I decided it was the right day to close my accounts. Also make sure to close any lines of credit and stop any direct deposit you receive; if your direct deposit information is not changed and the next deposit goes to the account you thought you closed, it will not actually be closed and you are still at risk of accruing fees!

One suggestion is to balance your checkbook before the big close. It’s not necessary, but it is important to know what you have before taking it out of the bank. The teller who helped close my accounts told me what I had before giving it to me in cash. The bank employee will give you the option of receiving either cash or a banker’s check; I suggest you receive your money in cash, especially if you do not have another bank account and you need to make immediate purchases. It is also recommended to open your new account before you close your old account, just in case you need to make purchases with a debit or credit card. I closed my old accounts on August 1 and opened my new accounts on August 2, so I will be without checks and a debit card for a week. I’m a recent college graduate, and the only major transactions I have right now are a cable bill and paying off my student loans. One is due in the middle of the month, and the other is due at the end of the month, so I will have plenty of time before I receive my new checks and debit card.

Banks offer the option to close out your accounts online or over the phone. This is a bad idea because it may take weeks to receive your money in the mail. Close out your account in person! Don’t be afraid to do it in person; after all, you had to come into the store to open it in the first place. The bank employees are not going to berate you for closing your account, and if they do, this is a discriminatory action. It only takes about 30 minutes to close your account in person, and you need to bring your debit card, as well as a photo ID. The bank employee who helped close my accounts did ask why I was closing them, and you will most likely get the same question. There should not be any fees for closing your account, and the only situation this may be an issue is if your bank account is less than six months old. Also make sure to get the name of the employee who helped close your account, just in case anything goes wrong in the future.

Around the 9th of August, I will have my new debit card and a new set of checks from my new bank. I am setting up a new online account, where I can view my statements and make any transfers, if necessary, between my new checking account and my new savings account. My new FREE checking account, that is. My savings account does have a $5 fee, but I am having the fee waived by maintaining at least $300 there at all times. It is much easier to maintain a $300 minimum in an account than a $1,500 minimum, so I will never have to worry about a possible fee. It was a tough decision to switch banks after maintaining accounts for seven years, but banks change. I found one that does not nickel and dime me, and I couldn’t be happier with my decision.