Controversy surrounding Bank of America’s decision to introduce a $5 monthly fee for using your debit card continues.
In fact it’s picking up steam!
There is now a movement underway encouraging a mass exodus from BofA and other major banks by November 5th. Some of the talk on the Facebook event page for what’s been dubbed Bank Transfer Day sounds similar to the “Occupy” protests going on around the country. The big difference is that this protest actually has a specific purpose and actions you can take.
So what’s the best way to close your checking account with a major bank? Here’s a step by step guide to help you get it done!
It does take a little bit of time, work and organization to switch banks. But just realize that Bank of America and many other financial institutions are banking (no pun intended) on the idea that we’re all too lazy to make a change.
Step 1 – Find a New Bank or Credit Union
This is going to require a little research on your part. But you can do it! There are a ton of online resources that will help you find the right fit with the least fees and the features you’ll actually use.
The Bank Transfer Day movement is suggesting you use the site findacreditunion.com. Community credit unions are a good choice because they’re more likely to use the money you put in your account in a way that helps small businesses and others where you live.
IMPORTANT: Do not close your current bank account right away! The safest way to transfer your money is electronically. So you’ll need both checking accounts open at the same time. There are some other good reasons to hold your horses, which are detailed in the next few steps.
When you open your new account, deposit the minimum amount that won’t involve any potential low balance fees.
Step 2 – Identify All Your Automated Payments
You more than likely have a bunch of recurring bills that are set up to be automatically debited from your checking account each month.
Make a list of all those payments and when they are typically withdrawn. It will help you stay organized when the time comes to switch the account information.
I would suggest paying these bills manually for a month while you get things set up. That will ensure there won’t be any confusion, and eliminate the possibility that you’ll bounce a check or miss a payment because it went to your old checking account.
Step 3 – Reroute Direct Deposits
If your paycheck is direct deposited, let your employer know you are switching banks and fill out the necessary forms with your new account number and routing number.
Make sure you find out how long you’ll have to wait before the first direct deposit will go to your new checking account. Sometimes it can take more than one pay cycle. For that reason, do not set up your automatic payments until you know your paychecks are being deposited in your new account.
Step 4 – Wait a Month
Before you leave that big bank behind, keep at least a little bit of money in your old checking account. Again…be careful about extra fees for having a low balance.
You’ll want some funds in that account just in case there are payments out there that haven’t been processed, or in case you forgot about any of the automatically withdrawn bills.
When you are finally confident all payments have gone through, and that direct deposits are going to your new checking account, you can set up automatic bill pay again. Just keep an eye on things for another month to be safe.
Step 5 – Close That $&@%# Account!
It may have been a painful process – but closing that oppressive fee-crazy bank account is going to feel really good!
Realize that removing all your money from the account does not mean you’ve actually closed it. Take care to follow the steps provided by your former bank in order to close the account properly. Then make sure you’ll get a written confirmation that the account was closed.
You can find an even more detailed description of how to close your bank account put together by the Consumers Union. The personal finance blog Consumerism Commentary has specific steps for closing a BofA account.
What if You Are Just Too Lazy?
So maybe the thought of reorganizing your personal finances makes you cringe. You may hate the idea of a debit card fee, but you hate the idea of switching banks even more.
Fear not! You can still send a message to the big banks by switching the way you pay.
Many financial institutions that are introducing monthly debit card fees are assuming, and in some cases encouraging customers to start using credit cards instead. There’s a reason for that…
Swipe fees on credit cards are still higher than debit card interchange fees. The elimination of those debit swipe fees charged to merchants every time you make a purchase with plastic are the main reason for new bank fees. However, banks and credit card issuers can still make the most out of a bad situation. With credit cards they make money on swipe fees as well as interest for those with a revolving balance.
But there are a couple of ways to pay that don’t have fees…cash and checks!
Bank of America won’t charge you for using a debit card at an ATM, and those good old-fashioned personal checks work the same way as debit cards.
But here’s the interesting part!
Debit card transactions are actually a lot cheaper for banks to process than personal checks. Ironically, there are no fees connected to using personal checks!
So if your bank wants to start charging you more money to make up for profits they aren’t getting from merchants…then why not make them pay a little more too?
Just a thought!
Take it one step further and refuse to order checks from your bank. It’s much less expensive to order personal checks online!
Will you be participating in Bank Transfer Day? If so…leave a comment and tell us what pushed you over the edge.
If you found this article to be helpful or want to spread the word about Bank Transfer Day – Please Share & Retweet!
Image Credit: Eddie Colla
+Kasey Steinbrinck is the lead blogger on personal finance and the economy for Check Advantage. When you order checks from Check Advantage, you’ll find hundreds of unique photography featured on our Scenic Checks as well as cute Dog Checks and much more!