Pick A Bank That Won't Screw You

Shopping for a bank but don’t want to get dinged with fees or unfair practices, but not totally sure you know what they all are? Those banks can be darn creative, after all. Here’s a great online guide that takes you step by step through all the practices you should watch out for. Complete the worksheet and you’ll have a good idea of whether you should stash your cash there or not.

A Shopper’s Guide To Better Banking [Center For Responsible Lending]

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  1. balthisar says:

    Hint: don’t be suckered into the video. The “guide” is the series of tabs at the top of the main article. It’s a question and answer format, and it’s not about only banking but also credit cards. And unless you live week to week by overdrawing you account, or not paying off your credit card, or taking cash advances on your credit card, it’s not really all that useful. Nothing about minimum account balances, free online bill pay, fees, and so on an so forth. Really, not much of a guide at all.

  2. Mom says:

    And this is why I’m in the middle of moving all of my money from BofA to my credit union. I was temporarily enthralled with the very slick online bill pay thing BofA has, but the one time last year that I got stupid and overdrew my account ended up costing me a couple hundred dollars for the credit card cash advances and such. My credit union’s online bill pay thing isn’t as nice, but if I overdraw my checking account, they charge me a dollar to transfer money from my savings account to checking to cover the withdrawal. Then they send me a lovely letter telling me how silly I was.

    The credit union also don’t charge any foreign exchange transaction fees when I’m traveling. I like that a lot.

    • lordargent says:

      I’ve used BofA’s billpay for years (ever since they made it free).

      I never set up automatic payments, I trigger payments manually (and update my own ledger while I do that).

      I keep enough at BofA to handle my bills, to pay off my credit card after purchases, and for large purchases.

      Everything else goes to ING.

      And the credit union is where I go when I need a loan or mortgage.

      /I abuse banks

      /All banks will screw you, in one way or another. So only go to some banks for some things.

    • pot_roast says:

      As usual, this depends. My credit union will happily transfer money from savings to checking to cover an overdraft – but they charge a fee to do it. That fee just happens to be equal to that of a regular NSF fee. After 10 years of having the account, they still won’t issue a VISA check card. I have a plain ol’ ATM card with them. They refused to refinance my auto loan because they require the vehicle be registered and titled in California.

      Some credit unions are great. Some royally suck. Just like banks.

  3. notserpmh says:

    I try to recommend to everyone I can to move away from any major bank (Chase, BoA, Wells Fargo, etc.) You can pretty much always find a local bank or credit union that has lower (or non-existent) fees, great rates on investments and loans, much friendlier service, and that invests its money more wisely so it doesn’t need a bailout. I bank at Viewpoint bank, a bank based in my area, I get free checks, 4% interest on my checking account, I can talk to tellers any time I want, I can talk to live people whenever I want. Moving from WaMu/Chase to Viewpoint was one of the best things I ever did.

    • I just blue myself says:

      I could not agree with this more.

      I’ve been looking around for a new bank because I’m moving across the country in January and sadly, the bank I have been at for almost fifteen years does not have any branches where I am moving. They’ve been great to me (even willing to work with me when I screwed up pretty bad last year and got some hefty overdraft fees). I think I’m going to shop for a small bank in my new city because it’s nice to be treated like a customer at a new bank instead only being known by my account number.

    • AustinTXProgrammer says:

      I had to deposit Canadian checks. My credit union and local bank each wanted $10. one of them suggested that I try a mega bank… I went to Wells Fargo (still have a free checking account there for odds and ends) and they only wanted $1.50…

      Clearly I am spread across too many financial institutions, but my credit union offers great local service, auto loans, etc. My small bank offers great interest checking, and Wells Fargo lets me deposit international checks, and do instant customer to customer transfers with other Wells Fargo account holders.

  4. Marlin says:

    Is the correct answer Credit Union?

    • tbax929 says:

      There are some good ones, but there are also bad ones. Due diligence is a good idea, even with a CU. Personally, I bank with USAA, but I have a BOA account for cash deposits. There’s no service charge for it, and I just transfer it right into my USAA account.

  5. klippies says:

    I don’t understand why people keep paying bank fees. If you are in control of your finances and keep an eye on what goes on in your wallet, why would you get into a situation where you have to pay fees? Keep a buffer in your account, do not spend what you don’t have, use your own bank’s ATM, use a free checking account, etc. Lots of people do it.

    • crazydavythe1st says:

      This comment always shows up from someone, and someone always gives the same response. But I’ll do it again.

      a) some people can’t afford to keep a “buffer” in their account
      b) banks historically have held checks and rearranged account debits to generate overdrafts that otherwise wouldn’t happen.

      I’ve had case B happen to me. I had a Wamu account way back when, and deposited by paycheck the same way I always did. For whatever reason though, they held my check a week without telling me – and which they never usually did. I bought groceries immediately and a couple of days later, went out for fast food a couple of times. Naturally, Wamu rearranged by debits so that the fast food purchases came first, and then groceries thus generated three overdrafts. I managed to have all but one removed.

      And of course, I had to deal with a smartass bank manager that told me I should keep a better eye on my finances.

      The main point being – some banks will find a way for you to overdraft unless you have thousands in the bank, regardless of how well you track your finances.

    • chocolate1234 says:

      Eh, this has all been covered before. There are a lot of people who can’t afford to keep a buffer in their accounts, and a lot of banks have sneaky fees that cause people to overdraft. Sure, there are definitely a lot of people who spend beyond their means, but there are a lot more (less frequent) overdrafters who just get screwed by the system. I can attest to that – I used to be a bank branch manager and I saw it all the time.

    • DimTwinkle says:

      Decades ago and as a single parent it took too many NSF fees before I finally figured out that, while I was living on the edge, I was still barely making it. But “making it” was contingent on no more NSF charges.

      I skimped on my own meals to save $50 as a gift to myself. I deposited it in my checking account but never added it to the running balance. Sure, I knew it was there but I wasn’t dipping into my hard-earned gift unless I absolutely had to.

      The rapid relief from constant, daily worry was so uplifting that I found myself doing other, smarter things financially. Not that there was a lot I could do at that time but I did start keeping a meticulous running balance in my checkbook. I had to dip into my self-gift a few times but I knew I was doing so going in – no ugly surprises! I made sure I paid it back at my first opportunity (usually my next paycheck).

      My financial life was much easier after that.

    • zekebullseye says:

      If the bank tells you that you have more money in your account than you actually have, then you can get suckered into overdrawing. It’s happened to me many times. Don’t blame the victim. It’s not cool.

      • An_Album_Cover says:

        But if you were keeping track of your finances properly (i.e., without relying on your bank’s website to properly tell you how much money you *really* have), would you have gotten dinged?

        • jamar0303 says:

          I live in China and use a US bank account out of necessity (Wachovia->Wells Fargo). Since most online exchange rate sites show a different rate than what the bank uses, yes, I have to rely on seeing what the charge posts as. I could use DCC, but that exchange rate is even worse.

    • mac-phisto says:

      watch you don’t get blindsided. there are only 4 banks left in my town & two just implemented monthly service fees on ALL accounts (including savings) for anyone keeping less than a good chunk in there. & considering they’re only paying you 20¢ annually on every $100, you’re getting screwed either way.

      in the next few years, we’re going to see a major shift as banks try to control 100% of your finances or fee the shit out of you trying.

    • BHall says:

      In my family we keep $1000 in checking and treat it as zero, last week we over-drafted and went all the way down to $913 but not a fee in site. After a while it tends to grow to over $2000, when that happens I transfer around $500 into savings. This keeps our family well above the curve apparently.

  6. H3ion says:

    I’ve been using BB&T for a long time. Their services match what any other bank in the area offers and then some. I’m on a first name basis with the tellers and the manager and they’ve taken the time to call me when they think there’s a problem or even to tell me of a new financial product that would offer a greater return. Their online banking is as good as anything I’ve seen and is fully compatible with Quicken products. I don’t know how far their service area stretches but in the Mid-Atlantic they’re very convenient. No, I don’t work there.

  7. MurKam says:

    If your money management practices make you vulnerable to these terms, well then, you’ve already screwed yourself. Seriously, if you need the bank to tell you how much is in your account, what are doing by spending in the dark?

    • jamar0303 says:

      For some, it’s a matter of int’l travel and would be less of a problem if bank exchange rates matched XE or some other checkable resource pre-spending.

  8. jdmba says:

    Ummm … for those extolling the virtues of credit unions over big banks please allow me a short story from 3 months ago. My credit union since 1998 sent out a rate schedule about 4 months ago. No flags, no nothing, just a rate schedule. The rate change included an inactivity fee buried in the list. Since they send statements only quarterly, they timed this fee to kick in on the first day of a new cycle, meaning that I would not see what they did until they did it 3 times. Well, by the time they did it 3 times, they hit the magic number where you would fall below your minimum deposit. That triggered a fee also. They managed to hit almost $25 out of a $100 minimum deposit just by that trick.

    So don’t accuse BofA of being the devil, while Credit Union’s are the saint. Both are well in the gray area.

    • Arcaeris says:

      I almost switched to a credit union, but when setting up my new account they assumed I would sign the opt-in form for overdrafts. I told them that no, I wouldn’t be signing it, and the woman had to call several other people to resolve it. Apparently she was so confident I was going to sign up for that crap, and set it up in the system that way. She told me to sign the form on the line at the bottom but write “I do not want overdraft protection” on it, but I told her “Listen, I’m not signing anything, I know the law, take it off the account.” I tried their customer service for getting a loan (to pay off my credit cards) and it wasn’t helpful or friendly at all (quite the opposite), so I closed the account.

      I’ve had trouble with Wells Fargo in the past and don’t like their service, but they’ve never tried to dick me over and treated me the way San Diego County Credit Union has. Screw them.

  9. AustinTXProgrammer says:

    The best banks and credit unions are going to fail most of those!

  10. c!tizen says:

    Pick a bank that won’t screw you

    Google translation:

    How to pick a bank with the smallest dick.

  11. Torchwood says:

    So, whats the matter with a credit union?

    • jamar0303 says:

      Look a couple posts above you. They’re not all better than banks. (in my personal experience, Wachovia-> Wells Fargo hasn’t treated me badly at all) Credit unions are limited in membership. If the ones that are open to you suck (bad customer service, don’t have a clue how to deal with any special needs) your only choice is a bank.

  12. TinaBringMeTheAx says:

    Am I the only completely satisfied Chase customer?

    My checking is totally free, probably because it is grandfathered in from my WaMu account. I pay maybe six bills per month online for free, saving me a few bucks in stamps, have free ATMs in a few hundred Duane Reade drug stores (a huge local chain) and they clear my employer’s checks immediately because they are with Chase as well.

    The employees, from the tellers to the managers are always polite and helpful, if somewhat pushy with offering premium services, but they take a “no” answer as a no.

    They offered me a credit card at an insultingly high rate, but with no fee, so I took it and never use it in order to lower my percent of credit outstanding and it bumped up my FICO.

    Me love you long time Chase!

    • Max5695 says:

      I also used to be with WaMu. The only reason Chase is tolerable is due to WaMu’s Free Checking which Chase still keeps free.

      However, the interest that Chase pays is very low. Keeping your money at Chase means that you are earning less money on the money you have in the bank.

      For example, at Alliant Credit Union they pay me 1.35% interest on my savings and free checking account. Chase would only pay me 0.10% interest.

      If I have $50,000 in my savings account, Alliant would pay me $675 per year.

      If I bank with Chase, they would only pay me $50 per year.

      So basically, Chase is ripping you off by $625 a year. People can move their money to better places that pay lots of interest money each year. Credit unions are not-for-profit and often offer really good rates.

      • AustinTXProgrammer says:

        I bet you can find a rewards checking and savings account that will pay a lot more. My local community bank pays 4.25% on checking and 2.05% on savings, up to 25k each. They refund ATM fees too.

        Only hoops: paperless statements, 10 mastercard debit transactions (I keep these small so I still get credit card cash back rewards), and one ACH transaction (Direct Deposit, car payment, etc).

        If I miss those thresholds they don’t pay interest (well, 0.01%APR) and don’t refund ATM fees that month (They hit me with $1 plus the other bank, both parts are rebated when the terms are met).

  13. jeepguy57 says:

    Why I got married, I left my credit union and went with my wife’s bank, PNC. Yes, I LEFT a credit union for a big bank. Here’s why:

    1. Rates are the same. In fact, my local mortgage guy got us a better rate than the credit union did. When we bought a car, Honda gave us 2.9%; credit union was 4.9%.

    2. Transfers – I can send money to anyone I want through PNC. Credit union wants $15 to do a wire transfer.

    3. Technology – PNC works great with Quicken. Credit union, I have to manually download the transactions.

    I know there are benefits to credit unions but I actually find the big bank to be better. BUT, we are responsible – we don’t overdraw, we have savings and we don’t get hit with fees. PNC even refunds ATM fees from other banks for us, because we maintain the minimum balance for that feature. PNC’s savings rate is pathetic, so I may move our savings to somewhere else.

    • BurtReynolds says:

      Yeah not every CU or local bank is superior as far as how it benefits the individual. I hate the fact I bank with Bank of America, so I’ve looked at just about every other option.

      Most of the local banks in my area did not appear to offer anymore “cushion” (defined by me as the amount of paranoia I have about getting a fee) against fees. Some of the CUs weren’t any better either and others I don’t qualify for membership in. The one I’ve considered joining due to what I see as a favorable fee schedule does not have a branch near me, and a fairly nonexistent ATM network near my house. Near my office I’d be fine.

      I like the idea of going to a USAA or Schwab, but I worry about getting the money to them. Wire transfers aren’t free and don’t always “work” (money ends up at some other bank). I suppose I could slowly send checks to USAA, but that has its own risks (and I definitely don’t want to deal with stopping a check at BofA).

      When it comes down to it, I’ve never paid BofA a fee other than the few times I’ve used another ATM on vacation. Their ATM network is typically good, and I like that I can deposit checks without an envelope. The online banking is pretty good too, although I hate the strong arm approach they just implemented for paperless. Would I ever send my future loan business to BofA or invest with Merrill Lynch? No way. Yet for a checking account, I can only really find disgust in the principle of doing business with them.

      • AustinTXProgrammer says:

        My little bank asked me to opt in or out of overdraft protection 9 months before it was required. Their overdraft fees are 22.50 (nearly half that of a mega bank) and NSF returned check fees are $2.50. Yes, less than $3 when the mega bank and my credit union both would charge $35-40 for the same thing.

      • jamar0303 says:

        Schwab lets you do a two-step no-wire process to deposit- go to Schwab office to deposit money into brokerage A/C by check, then transfer over to checking online. Not bad apart from the waiting period between deposit and transfer (takes a week, I think, to “settle” into cash).

  14. Jane_Gage says:

    Thanks to a recent demand for money I exceeded the number of withdrawals allowed from my BoA savings account–fees every time. There are many ways to enjoy BoA’s fabulous and creative fees, even if you have four and five figure cushions and live frugally. In college I was concerned that wouldn’t be able to find a CU ATM, but now I can pretty accurately anticipate how much I use in a week.

  15. perfectly_cromulent says:

    Only thing is, a lot of smaller banks and credit unions have their credit cards and other things through a larger bank, like Wells, BofA, US Bank…. but they aren’t going to tell you this. So in a lot of ways, its hard to completely escape them.

  16. NeverLetMeDown says:

    I’m looking for a bank that maximizes fee revenue from those who manage their money poorly. It usually means that the accounts are very attractive for those who don’t, much like rewards credit cards.

  17. athensguy says:

    For checking, #2 is pretty much impossible.

    The whole CC section is pretty much worthless. The minimum finance charges only apply if there is a finance charge at all. If the card is PIF, there is no finance charge.

  18. greggen says:

    The problems I see with the questions to ask is that banks lie. They will misrepresent their services. Then when you get hit with one of the things you tried to avoid, they will deny your previous conversations.. I went round and round with my former bank on several issues. Tellers, customer service reps, online and in bank, bank managers would all say different things about the same issue. It was impossible to get things in writing. Being an informed consumer is one thing, getting straight answers is something else.

  19. SynMonger says:

    Wow, that site does NOT render well at all in Chrome. Oh well, guess I’ll just have to use my head instead.

  20. princess1980 says:

    Bank of America, somehow, loses cash deposits made with a live teller. They have horrible customer service & they’d rather rush you off the phone then handle your concern. I received an email alert saying my account was overdrawn, when it hadn’t been overdrawn. When I contacted customer service, the rep replied, “these things happen.” I’ve always had my savings at a credit union, but I’m moving my checking as well. Many credit unions have ATM contracts with other banks nationwide so you don’t have to pay fees. I can even make deposits at other credit unions. Bank of America is HORRIBLE. I’m just happy to be finally done with them. I’ve given them WAY TOO MANY chances.

    Reply

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    Bank of America, somehow, loses cash deposits made with a live teller. They have horrible customer service & they’d rather rush you off the phone than handle your concern. I received an email alert saying my account was overdrawn, when it hadn’t been overdrawn. When I contacted customer service, the rep replied, “these things happen.” I’ve always had my savings at a credit union, but I’m moving my checking as well. Many credit unions have ATM contracts with other banks nationwide so you don’t have to pay fees. I can even make deposits at other credit unions. Bank of America is HORRIBLE. I’m just happy to be finally done with them. I’ve given them WAY TOO MANY chances.