When to Fire Your Financial Service Provider

When I wrote the post last week on “avoiding those pesky transactions costs,” I did not anticipate that Bank of America, a major US bank, would announce a monthly charge for using debit cards.  After all, who uses debit cards?  Well, there are many reasons to use a debit card including weaning yourself from credit, not having a lot of cash handy, and in many places, the convenience of swiping a card rather quickly.  I seem to recall just a few years ago, banks were trying to get you to use your debit card more often by offering points and incentives or cash back for using the card. Now, it seems that they want to charge you.

This announcement raises a larger question: At what point do you decide that you’ve had enough from your financial services provider and decide to call it quits.  Because of the hassle of changing financial service providers (banks, credit cards, brokers, etc…) I don’t take this move lightly, but here are some things that have made me switch in the past.  I am debating one or two more switches to consolidate my accounts.  Service providers, pay attention:

–Not being able to provide services you need — this is a key feature for me as I need to have accounts that are functional and can provide the options that I really need.  For this reason, I have kept a bricks and mortar bank account in addition to an online account.  I also keep a back up credit card that I use rarely, but is there for emergencies.

–Not being able to transact easily, with confidence — I recently shifted my investments out of one service provider to another because the previous did not have a good internet interface. They failed to provide easy transactions by internet, transfers into accounts, and real-time pricing.  The account that I shifted to (Fidelity brokerage) has all of these and to-date has provided excellent service.

–Making the administration of the account a real pain — these days, as many banks and service providers have spent a lot of resources making administration easier, those that don’t really stick out.  I particularly notice this at tax time when gathering tax documents and uploading information can be a real hassle.

–High fees — this goes without saying, that persistent high fees are a reason to switch accounts.  I have shifted much of my activity from one credit card to another because of some of the hidden fees one has.  For investments, I tend to prefer index funds or ETFs as the fee advantage is substantial.

--Poor customer service — these days, it is difficult, but not impossible to find good customer service, but increasingly, I find dealing with poor customer service more and more annoying.  The account I mentioned above that did not have a good internet interface, also had the problem of having a long lag of answering questions and not having documents delivered electronically (who keeps a fax machine these days?).  Although I used to think I would not switch an account due to customer service, I realize that great customer service can earn my loyalty.

I would love to hear of your experiences with exiting a bank/service provider relationship.

shared at Works for Me Wednesday