Comments on: Bank Switching Costs

By: Ron

Ron — Mon, 02 Nov 2009 18:04:37 +0000

How come there is no discussion here of the subsidies credit unions receive? Banks pay taxes, usually at about 39%, but credit unions pay none. I know they are shareholder owned – so? It seems like everyone else in the economy, especially small business is paying for this loophole. Why shouldn’t credit unions pay taxes the same as community banks? Make them both comply with the Community Reinvestment Act.
I suspect credit unions would confront the same economic reality that banks face if they weren’t continually drinking from the public subsidy trough. They were started to help disadvantaged local groups, and that was legitimate. Now they have virtually no membership requirements and anyone can belong. I don’t like the big banks but this isn’t right either.

By: Karen

Karen — Sun, 01 Nov 2009 21:04:44 +0000

I have an ING account, both an equity line of credit and a savings account. Their telephone staff are courteous and professional. The online site is easy to navigate and the security measures seem strong.

I have just received a Schwab VISA card, after applying on the telephone only five days prior to receiving the card in the mail. It pays 2% cash back, there are no ATM charges (they are refunded), and there are no foreign-exchange fees (a great feature if you travel or purchase international products online).

Both companies are heartily recommended.

By: Katharine

Katharine — Wed, 28 Oct 2009 12:38:38 +0000

Credit unions, CDFIs, and local banks can all be wonderful, though you do need to do ordinary homework. There are an awful lot of former local banks that have become part of something bigger and more distant. But it is possible to find something stable that lends to the kind of people you’d like to lend to.

If you don’t think you can live without the big bank’s ATM network, you can always maintain a rudimentary account relationship for that and put your serious savings account someplace that actually pays interest.

By: Sid

Sid — Wed, 28 Oct 2009 10:35:21 +0000

Commies!

By: RER

RER — Wed, 28 Oct 2009 06:24:38 +0000

Folks,

Credit Unions are excellent in so many areas:

1. Transparency Depth x Breadth via http://www.ncua.gov includes detailed quarterly financials via “5300 Reports” (balance sheet, income statement, loan details, investment details, expense details, etc).

2. Low/no fees and higher rates – like any financial institution they make money on loan/investment vs deposit spreads and have low opex due to no Wall Stree Salaries and Dividends to Shareholders

3. Member owned not shareholder owned

4. ATMs – include any/all Credit Unions, most all 7-11′s, many refund fees when charged

5. Full portfolio of loan products: home, car, credit card.

6. Full portfolio of services: online, branch, safety deposit

By: Bman

Bman — Wed, 28 Oct 2009 04:51:10 +0000

we got monopolies up the wazoo. Arguing about whether they are natural or synthetic or whatever the heck you try and assert here is pointless. I think the whole point of the article is people are defenseless against these behomoths. Unless they band together and make coordinated consumer oriented thrusts they will be stuck with these giant things stomping around their garden patches forever.
I had a fee free checking acount with the fractional bank, I found out they had imposed a fee on my employee for cashing a check I wrote on my account with them. A fee to cash a check that was written from that bank. So they lied to me about the fee free. When I brought it up they said something like everyone else (ie. the price fixing monopoly) does it, where have you been for the last decade or two? So I closed my account with them or tried to. There was a $50 fee for closing my fee free account. I later found out they were one of the regional sized banks that still owed tarp funds and still couldn’t pay it back. I now have a business account with a bank I do not respect or want to be associated with. I have a balance of zero dollars and zero cents in it. But I can’t close it unless I want to pay them $50. They can wait for snowballs in heck before I’ll think about giving them 50 bucks.

By: mag on money

mag on money — Wed, 28 Oct 2009 02:40:56 +0000

As I have before, I again suggest to those looking for a cu to investigate mine, NuUnion, formerly the State Employees CU, based in Lansing, MI. Fully Internet integrated and pays 4.5% (up to $25,000) on checking accts. ( must make 14 debit card transactions per month to obtain interest)…but try to match that on any CD! I have been a member for 30+ years; while I have also had mortgages with large banks, my day to day financial business has been with credit unions and always will be.

By: JH

JH — Wed, 28 Oct 2009 01:21:25 +0000

I recently refused a change in my interest rate at JPM Chase card, on their offer. They closed the account. I owe nothing on it.

I feel free of them at last!

But have I screwed my credit rating? And for how long?

Do any of us know what we’re doing, really?

By: Adam

Adam — Tue, 27 Oct 2009 19:11:24 +0000

Just an FYI Ed, most credit unions belong to the Credit Union Service Center Network. That means you can use just about any credit unions branches no matter where you are in the US; and if you’re overseas near a US military base you probably have access to the base military credit union.

The other option is to find a credit union like the one I work for where you can create inter-institutional account transfers. Then you could transfer money to a “big” bank when you really needed access outside the US.

Oh, and for your information, it’s impossible for the US government to be insolvent. You (and I) may not like the financial situation but the government can not run out of US dollars – they just make more.

By: Donald A. Coffin

Donald A. Coffin — Tue, 27 Oct 2009 18:44:36 +0000

I mostly don’t use ATMs. I make purchases at stores that provide cash back. No ATM fees. No problems. (I live outside Chicago and have done this in New York, in central Florida, in southern California…)

By: Donald A. Coffin

Donald A. Coffin — Tue, 27 Oct 2009 18:38:43 +0000

And, frankly, switching costs have increased over time. In the mid-1970s, I switched banks three times in one year, because of lousy service. But, then, all that meant was closing one checking account and one savings account and opening one of each elsewhere. No direct deposit to deal with, no automatic payments/debits. No ATMs, so no ATM fees.

Furthermore, if one moved, one absolutely had to change banks (no direct deposit…).

What we now routinely do through our banks has become much more complicated, so switching has become much more costly. And as we develop new ways to use financial institutions (and as financial institutions develop new ways to do things), the costs of switching can only rise.

By: KevinC

KevinC — Tue, 27 Oct 2009 17:42:38 +0000

Has anyone addressed the catch-22 with the credit rating services which is happening? Assuming a good credit rating is a good thing, which seems reasonable- if I dump my cards, my credit rating will suffer. Hence, in order to maintain my credit rating I’ll have to keep my cards and continue to pay their fees e.g. user, inactivity, etc.
No big deal to some, but very irritating to me. In fact with just the slightest amount of collusion between bank and credit rating service this kind of cleverness can really amount to a lot of cash for both parties.
kc

By: carol

carol — Tue, 27 Oct 2009 17:41:52 +0000

James said: ¨… but I’d rather overplan than give money to banks.¨

EXACTLY!!
We can pretend to be keyboard revolutionists, and our outrage is completely justified, but it does not change anything (so much for change you can not believe in….).

The WH/Congress route is clear: shovel the bad assets out of the banks and onto the taxpayers, bail-out the banks with hundreds of billions, to be paid for by issuing RECORDS of treasuries — this week alone $ 123 billion: WHAT!!! $ 123 billion in a week; it used to be we needed that in a year — and guess what… government sachs et al. get money for free from the FED with which they buy those treasuries, getting 3.5% interest from the taxpayers, letting those banks ´earn´ almost record profits, etc. etc.

If we do not like that process: wealth transfer from middle class Americans to the few bonus banksters and friends, than we have to STOP it ourselves.

ANYONE WHO STILL GIVES HIS/HER HONESTLY EARNED MONEY TO THESE TBTE (too big to exist) and/or BAILED OUT BANKS IS CO-RESPONSIBLE FOR THE ONGOING THEFT AND WEAKENING OF THE COUNTRY.

Sorry to use caps, but it is utterly incomprehensible to me how a few hours of ones life spent to search for a non-TBTE and not bailed-out bank, would me too much. Really, it are the BEST hours of your whole life.
Individually we are quite powerless indeed, but collectively we can stop this theft and injustice.

How long do you think these TBTE banks could continue if we organize bank runs?!
Please take action yourself, and tell all your family and friends to do the same.
See among others:
http://market-ticker.denninger.net/archives/2009/10/20.html
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By: cityislander

cityislander — Tue, 27 Oct 2009 17:16:59 +0000

I’m looking into ING Direct and Charles Schwab as alternative checking accounts because the they have no maintenance fees, yet interest bearing checking accounts. CS say they even reimburse all ATM fees.

Anyone had some experience with either?

By: cityislander

cityislander — Tue, 27 Oct 2009 17:13:41 +0000

Interesting. I did a google search but no success. Do you have a link for this?