A month after they announced a $5 charge to use your debit card, Bank of America is now reportedly looking into new ways for more account holders to avoid the fee. But the new policy, along with other fees from other big banks, has plenty of consumers talking about switching. Kelli Grant, Senior Consumer Reporter for SmartMoney.com, tells you how to do it right.
First assess fees and features. Make a list of all the features you use at your current bank, including mobile access and automatic bill pay. Ideally, you're looking for a new financial institution that offers all those things for free, or at least, less than you're paying now. Consider convenience, too, for those ATM and branch visits.
Cast a wide net when searching for another bank. Don't just look at other big banks. Try local banks, credit unions and online-only options. Sites like FindaBetterBank.com, Bankrate.com and FindaCreditUnion.com are good resources. Also talk to HR - companies often have bank partnerships that can result in you getting a premium account at a big bank for free.
Consider switch deals. Banks are offering some pretty big bonuses for new account-holders; as much as $400 at Citibank. That bonus is taxable and can require you jumping through a few hoops, though. Think of it as added incentive if you already like a bank. Steer clear if the incentives mean you're still paying fees.
Don't assume you can open a new account and shut the old one on the same day. It can take time to shift direct deposits, as well as automatic debits like your mortgage or student loan payments. You'll also need to wait for outstanding checks to clear. Assume that for as long as a month, you'll need to have two accounts.
If you're not ready to switch, see if you can avoid fees at your current bank. Adding extra services, like a credit card or direct deposit, might help you get them waived. Or you could add an online-only account that comes with a debit card, like those from ING Direct or PerkStreet. That's a way to avoid Bank of America's debit fee.
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