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Top 10 Reasons To Dump Your Bank.

Use these red flags to determine when you should make a switch

WHEN JEANINE COOPER-TAYLOR MOVED TO ATLANTA IN THE winter of 1996 and opened a personal checking account with a large money center bank, she was pleased to have found an institution that offered the convenience of so many locations. She also expected to be a customer for years to come. "I like to build relationships," says Cooper-Taylor, president of JCEC/Jeanine Cooper Entertainment & Communication. "I have had the same automobile insurance since I was 16. I don't switch companies. I remain with the same ones [service providers] unless I am very unhappy."

Cooper-Taylor quickly became discontented with the bank. With her hectic schedule, she found the bank's traditional hours--9 a.m. to 4 p.m. weekdays--inconvenient. As a result, she was obliged to use ATMs after hours. Over the course of that year, because she used alternative ATMs, she was assessed approximately $1,000 in fees.

The last straw came when a computer glitch erroneously stopped an electronic transfer to her account. She needed immediate access to those funds and although the company and its bank confirmed the wire was sent, the institution's customer service representatives refused to take any responsibility for the incident. When the manager of the bank refused to call to check on the error, or be a part of a conference call with the other bank, she closed her account and went to her neighborhood Publix grocery store to open an account with SunTrust Bank, which had a branch there. [My old bank] was very cold and unappreciative of me as a customer," says Cooper-Taylor. "I had the feeling that they were uncaring and not very sympathetic or accommodating."

According to Cooper-Taylor, SunTrust's ATM fees are lower. And because their banking hours are 10 a.m. to 8 p.m. Mondays through Saturdays, she rarely goes to ATMs. Her monthly fees at her new bank are $3 less, and the money orders as well as the cashier's checks are also less expensive.

She's also found that her new bank offers a greater number of services than her previous one. Plus she appreciates SunTrust's personal touch. For Cooper-Taylor, her new bank is a better fit.

When should you consider dumping your bank? Errors appearing in your account, excessive ATM charges, and indifferent customer service agents are all strong indicators that you need a new bank, In fact, 20% of consumers switch banks each year because of these factors. Still, there are other red flags that should inspire you to make a switch. We polled several experts to determine the top 10 reasons you should dump your bank.

* Your bank charges excessive monthly fees. Look for a bank that advertises no monthly fees for checking and savings accounts. Many banks will offer free checking for groups, direct-deposit customers, and individuals who maintain a certain amount in their checking and savings accounts. Though monthly fees and special services vary from bank to bank, on average the cost is $10 for checking and $4 for savings per month. You will have to research the institutions to determine which products are best for you. You can do so by going online or by calling or by going directly to the bank.

"Monthly fees would definitely be a reason to leave a bank. Free accounts are out there with a lot of banks. Any monthly maintenance fee is not worth it in the banking industry," says Linda Sherry, editorial director for Consumer Action (www.consumer-action.org), a nonprofit educational advocacy organization that focuses on personal finance issues. The California Public Interest Research Group (CALPIRG), in its online Consumer Tips for Choosing a Bank (www.pirg.org/calpirg/consumer/ banktip.htm#complain), offers this suggestion: "If the bank tries to charge you a fee for talking to a human teller or to call them on the phone, don't simply complain. Vote with your feet!"

One way to avoid fees is to join a credit union. They are member-owned and do not have to pay stock dividends. Their fees, therefore, are lower for consumers. California and Nevada residents can find out about companies, unions, state and local governments, and communities that have credit unions that will qualify them to join by calling the Credit Union Match Up Program at 800-472-1702. Others can call 800-356-5710 (800-342-5710 in New York). "It is an across-the-board better deal," says Sherry. "Fees are lower and you get better loans."

* Your bank has too few ATMs citywide and statewide. If you frequent automated teller machines (ATMs) that are not a part of your bank you will likely incur surcharges--fees charged by your bank and the other bank--as was Cooper-Taylor's experience. Those fees usually range from $1.50 to $2 at the competing bank and vary for your personal bank depending upon the type of account you have. For example, with 12 banks and 16 ATMs in the metropolitan Atlanta area, Citizens Trust Bank the sixth largest African American-owned bank in the country, charges its customers a maximum of 90 cents per transaction. It assesses noncustomers a $1.50 fee for each transaction.

When you have accounts with large financial institutions that have many branch locations, it is likely you will have an ATM near your home or job that you will not have to pay to use. Wachovia Bank, with nearly 700 branches in Virginia, North Carolina, South Carolina, Georgia, and Florida, has over 1,300 ATMs. "We have ATM machines at 100% of our banks and many freestanding machines in malls, shopping centers, and other stores," says David L. Pope, executive vice president of retail sales and service for Wachovia. "The advantage is convenience for our customers. It is nice to be able to travel to other states and still have access to your bank's ATM. Look for the bank that has an extensive ATM network so that you won't have to incur that charge."

* Your bank does not offer check cards (debit cards). When you are at a restaurant, gas station, or other commercial establishment that does not accept personal checks, you can use your check card to have funds drafted directly out of your checking account. "The benefits of a check card are that it is quick and you don't have to carry much cash. Retail establishments are very familiar with the Visa logo and you usually do not need a second piece of ID, as with writing a check" points out Pope.

Says Sherry, "Having an ATM card that can be used as a credit card is a very convenient way to pay. It is very useful and `pay-as-you-go' is a great way to manage your finances."

* Your bank does not reinvest in your community. It is unreasonable and unfair for banks that have your dollars to export them from your community into another for new car loans and new home loans. "It damages the community and the long-term effects can be very devastating," explains Willard "Chuck" Lewis, senior executive vice president and COO of Citizens Trust Bank

The bank has an unwavering commitment to the African American citizens of Atlanta and demonstrates it by offering investment planning, home mortgage loans through its full-service mortgage company, and automobile, small business, large commercial, consumer, and college education loans. Citizens Trust Bank advertises consistently and heavily with practically all of the black-owned publications in Atlanta. It is a major sponsor of De Kalb County's Partners in Education and Teacher of the Year programs, and makes regular donations to the NAACP, the Southern Christian Leadership Council, and local church events.

"We have a company philosophy of community reinvestment, and that is evident in our Community Reinvestment Act (CRA) rating, which measures and gauges how banks reinvest in the community. We received an outstanding rating--the highest possible rating--for the past three years," says Lewis. "Assess what your bank has done for your community. If they cannot give you clear answers, it is time to look for another bank."

* Your bank does not offer a credit line/overdraft protection. There are two types of overdraft protection by which your checks will be paid even though you do not have the funds in your checking account to cover them. They are line of credit and automatic transfer of funds from savings. A line of credit is lending approved by your bank, up to a certain amount of money, and usually requires a credit check. When you open your savings account, you have the option of having funds transferred from your savings account to cover checks. Although there really should be no charge for transferring your money from one account to another, there is usually a $5 fee for each transaction.

Additionally, banks should not charge longtime customers high fees for returned checks. This is another reason for leaving a bank. "Returned check fees are painful. The standard fee is $30 or less. Anything over that would be considered out of bounds for most institutions," says Lewis.

* Your bank does not allow "linked" accounts. A linked account is one which combines all of your accounts at a bank, and may include checking, savings, money market, and certificates of deposit. Banks usually offer reduced fees or eliminate them altogether when you meet the minimum balance requirements. For example, some banks may require a minimum daily balance of $2,500 in your checking account. If you find this difficult to achieve, go to a bank that will allow a "linked" account, and if all of your accounts combined total $2,500, your fees will be eliminated.

"Most banks offer linked accounts and encourage their customers to take advantage of it," says Karen Smith, a financial planner who was a sales manager at Chase Manhattan Bank for 10 years. "They feel that the more accounts that you have with them, the less likely you are to leave."

* Your bank has inconvenient hours of operation. Consumers now take pleasure in the luxury of being able to go to the bank seven days a week when their bank has branches in grocery stores and some retail stores, such as Wal-Mart. It is very difficult to deal with the traditional bank that closes at 4 p.m. daily and is not open on Saturdays or Sundays.

"When you work a nine-to-five job, it is very hard to go to traditional banks. You don't have the time to handle your important financial business on your lunch hour," says Smith. "Until people get familiar and comfortable with online banking, they need the convenience of banks that are open late and on weekends. I find that a lot of store owners definitely have this problem."

* Your bank does not offer online banking. Most of the larger banks offer online banking. It affords their customers an opportunity to pay their bills online, at their leisure, and to view their daily balance without being charged a fee. Online banking also allows the consumer to transfer funds from one account to another from a remote location while most traditional banks expect consumers to go to the bank in person.

Some consumers opt to switch to online banks such as Wingspan Bank.com (www.wingspanbank.com) because it offers them the convenience of banking at any time. Whether you're at home in the process of cooking dinner, at work on a lunch break, or sitting in the airport on a business trip, you can check on all of your accounts. If your traditional bank does not offer what you need, an online banking company may be for you. "We offer access to WingspanBank.com customer service representatives 24 hours per day, seven days a week to help consumers with any questions or concerns they may have with their accounts. If you're banking at 2 a.m., your questions can be answered at 2 a.m.," says Kevin Watters, senior vice president of marketing for WingspanBant.com.

WingspanBank.com rebates ATM fees each month up to $5 per month. It could cost from $1 to $2 for each transaction depending on where you went to the ATM. Wingspan Bank.com offers a higher interest rate on checking and CDs, and has the ability to scour the Internet for the best rates on insurance as well as mortgages. It offers free online bill paying and complimentary checks when customers first join; there is a charge when customers renew. It is, in other words, a one-stop financial shop for checking, credit cards, CDs, loans, brokerage, and insurance.

* Your bank refuses to give you a loan. There are some customers who find that they are constantly turned down by their bank for car and home loans as well as home equity lines of credit and financing for short-term personal needs and investments. You are not obliged to be loyal to a bank that is not loyal to you if you are credit-worthy. Credit problems in your distant past should not affect your future.

"Many times I have been turned down by banks. I was turned down four times by other banks before City and Suburban Savings Bank gave me a 75% loan toward the purchase of an eight-unit brownstone," says Smith. "The important thing to remember is to really examine the reasons that you were turned down. If your debt-to-income ratio was too high, address it and correct it."

* Your bank does not offer financial planning. Some banks meet with customers to discuss their needs for retirement, an investment portfolio, mutual funds, Fortune 500 stocks, estate planning, and various types of insurance. "It is good to have a knowledgeable group of people behind you. Your bank would like to see all of your resources in one place. Banks that do not offer financial planning lose this market share," says Smith. "For consumers, the advantage is that it is a one-stop shopping situation."

Asserts Cooper-Taylor, "Banks need to get back to more personal attention and consumers need to get back to making demands on these banks. I would encourage people to be more vocal if they are not pleased with the service. If we, as African Americans, do that, I think that we would find, over time, we will be taken advantage of a lot less."

Banking secrets that could have save you money

Get checks for cheap. You may pay less if you don't use your bank's designated check printer. Current Inc. (800-533-4443)charges $4.25 plus $1.95 handling for 200 basic checks.

Demand a waiver for unwarranted bounced-check fees. If you've written several checks on the same day, the bank typically clears the largest one first. Under this strategy, the remaining checks will bounce and you will incur separate bounced-check fees for each of them. Ask for a fee waiver if this tactic was used on you.

Use your check/debit card to avoid ATM charges. Many banks don't charge a fee or the fee is nominal if you use their debit or check card. You can avoid a hefty ATM surcharge by paying for your goods and services with your debit/check card instead of making a withdrawal.

Find out if you are listed with ChexSystem. Most banks check with ChexSystem, a financial database, to see if you've bounced a check or had other financial problems when you apply for a checking account. They may use this information to deny your checking account request. Find out if you are listed in error by writing to: ChexSystems Inc., Attn: Customer Relations, 1550 East 79th St., Minneapolis, MN 55425.

Beware of stand-alone ATMs. You may find making a withdrawal at your local drugstore or supermarket convenient, but it could cost you as much as $2.50 for the transaction because the merchant hosting the machine has to get a portion of the proceeds. Find out the amount of the surcharge before you make a withdrawal.

--Monique R. Brown
COPYRIGHT 2000 Earl G. Graves Publishing Co., Inc.
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Author:Brown, Monique R.
Publication:Black Enterprise
Geographic Code:1USA
Date:Nov 1, 2000
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