5 ms·

This seems like it would backfire. I suspect many people are more loyal to mint.com than to their banks.

by xirdstl 11y ago

jacquesm 11y ago
Switching banks isn't easy, unfortunately. Note how banks have very successfully managed to create systems that do not have bank account number portability built in, they even engineered them in such a way that any future desire to implement such portability will meet with very substantial technical roadblocks.
- Spooky23 11y ago
  Why not? I've ditched banks a few times. Checking is a commodity product these days... it's not like a banking relationship matters anymore. In olden times, it might have been a pain. Now most automatic payments hit a credit card, so you aggregate the account changes at that level. Last time I flipped to get a 1/4 point off my mortgage. I think I had to redirect my utility account and change a few online payment portals for AMEX, etc. Took about 30 minutes, and saved me about $20k over the life of the mortgage.
  - JoshTriplett 11y ago
    > Why not? I've ditched banks a few times. Checking is a commodity product these days... it's not like a banking relationship matters anymore. Depends on what position you're in, and how you've previously organized your finances. If you still write checks, you have to leave the old account open with enough funds and wait for all of those to clear. If you have things pointing at your bank debit/credit card, you need to change those and wait for any outstanding charges to clear. If you have direct deposit of a paycheck, you'd need to change that. And any services hooked up to your bank account via the usual "tell us the number of pennies we just transferred in and back out of your account" need re-hooking.
    - toomuchtodo 11y ago
      * Write checks only when necessary. I usually use USPS money orders instead. * Always have recurring payments on a credit card, which you pay off monthly. Bill payments and connected accounts should be minor.
      - JoshTriplett 11y ago
        Sure, but those are the kinds of steps you take once you've realized you want to limit how much gets tied to your bank account. Similarly, once you go through the pain once of switching email addresses away from an ISP email address, you might move to a provider-independent address. But in both cases, you might not know that the first time.
        toomuchtodo 11y ago
        Yep, I agree. Its really an education issue more than anything.
    - Spooky23 11y ago
      Good point. I have a "no debit card" policy and don't do automatic payments, with 4 exceptions (mortgage, auto insurance, house insurance, electric/gas company) The first three are paid from a dedicated account. The electric company pays me to do pay automatically, so I do. :)
  - ssharp 11y ago
    I used to occasionally game banks for their account sign-up bonuses. You quickly learn how to set up your accounts so that it takes minimal effort to switch to something else. A few tips to stay nimble and cover your bases during bank changes: 1) Don't use any bill payment services 2) Any automatic payments you do online, set them up for your credit card if you can (I'd recommend this anyway to take advantage of rewards) 3) Keep a detailed list of where your bank accounts details are stored for auto or manual deposits and withdrawals so when it comes time to change accounts, you have a good checklist to follow. 3) Think about setting up a permanent "home base" account that you can transfer money in and out of from other banks. The idea is that you'll always have this account, so it can be used to pay bills, write checks, day-to-day, etc. and you just funnel your direct deposits from other banks into this one.
    - jrs235 11y ago
      That's basically what I do as mentioned in a comment to a sibling of you comment.
  - LordKano 11y ago
    I have switched banks a couple of times too. In all cases, it has been because the bank took advantage of me when I made a mistake. It has always been a variation on this same theme. The last time I changed banks was in 2010. I had made a mistake and I overdrew my account by $5 or so. That was obviously my fault and I should have been on the hook for one overdraft fee. My bank, reordered my transactions and caused me to incur 5 overdraft fees. When I called in to complain, they "waived" two of them, leaving me to pay $90 when I should have only had to pay $30. That was it for me. I opened an account at a Credit Union and left about $5 in the bank account so they'd have to keep paying to send me statements. That went on for over a year until the bank implemented a $2/mo convenience fee for paper statements. In three months, my account was drained and the bank closed it. People need to be willing to pick up and leave a bank if the relationship is no longer advantageous. From the bank's perspective, it's always business and never personal. That's how you have to act in return.
    - jrs235 11y ago
      The difficultly, strike that. The complexity occurs when you have setup auto payments. One just has to handle it like any other transitional period. You open a new account with a new bank or credit union and start funding it. You watch your existing bank account for recurring or auto payments coming out and work to switch them over to the new bank account. You have to maintain some money in the old bank account and possibly keep it open for several months or a year. Treat the old account as a temporary savings account with enough money to cover any checks or auto payments that might get drawn against it. After you are certain all auto payments have been transferred or you feel safe and confident then you close the account with the old bank. I primarily use a credit union but I do have a checking account with a regional bank that I use strictly for auto payments, this makes it easy to make sure there's enough money in the account and to transition away in the future should the bank displease me.
      - LordKano 11y ago
        I don't do automatic payments. I won't do automatic payments. It doesn't benefit me so I don't do it. They day after payday, I sit down and determine which bills are due and I pay them electronically. It doesn't matter which bank account I use because I handle them individually, every payday. I could switch banks today and my process wouldn't be interrupted at all.
- bovermyer 11y ago
  I think the biggest issue with switching banks is that that lowers the average age of your accounts, which affects your credit score.
  - elahd 11y ago
    That only applies to credit cards. Bank accounts don't even register on your credit report (overdraft lines may show up).
  - berberous 11y ago
    Well, the age of your checking/savings does not matter. You could just leave your old credit card open and never use it (although this does creates some minor but annoying extra cognitive load).
- jburwell 11y ago
  Switching banks is complete PIA. However, services like Mint could eventually make it much easier to do. Today, they aggregate and analyze data across multiple across multiple accounts. As they start get into executing transactions, it will be become much easier for people to simply "repoint" transactions.
- morgante 11y ago
  > do not have bank account number portability built in What do you mean? I don't see how one would even conceivably bring an account number from bank to bank, let alone why it would be desirable. In my experience, it's actually quite easy to switch banks. No more than 30 minutes tops (open account, change credit card autopay).
- jarek 11y ago
  It's also a regulation / regulatory capture issue. The UK has a switching regulation set up so that all you have to do is go into the new bank and tell them your account number at the old bank. All scheduled deposits and withdrawals switch over with no further effort on your behalf. (Then again, they also don't have things like paper checks anymore.)

This seems like it would backfire. I suspect many people are more loyal to mint.com than to their banks.

by xirdstl 11y ago

This seems like it would backfire. I suspect many people are more loyal to mint.com than to their banks.

Switching banks isn't easy, unfortunately. Note how banks have very successfully managed to create systems that do not have bank account number portability built in, they even engineered them in such a way that any future desire to implement such portability will meet with very substantial technical roadblocks.

Spooky23 11y ago
Why not? I've ditched banks a few times. Checking is a commodity product these days... it's not like a banking relationship matters anymore. In olden times, it might have been a pain. Now most automatic payments hit a credit card, so you aggregate the account changes at that level. Last time I flipped to get a 1/4 point off my mortgage. I think I had to redirect my utility account and change a few online payment portals for AMEX, etc. Took about 30 minutes, and saved me about $20k over the life of the mortgage.
- JoshTriplett 11y ago
  > Why not? I've ditched banks a few times. Checking is a commodity product these days... it's not like a banking relationship matters anymore. Depends on what position you're in, and how you've previously organized your finances. If you still write checks, you have to leave the old account open with enough funds and wait for all of those to clear. If you have things pointing at your bank debit/credit card, you need to change those and wait for any outstanding charges to clear. If you have direct deposit of a paycheck, you'd need to change that. And any services hooked up to your bank account via the usual "tell us the number of pennies we just transferred in and back out of your account" need re-hooking.
  - toomuchtodo 11y ago
    * Write checks only when necessary. I usually use USPS money orders instead. * Always have recurring payments on a credit card, which you pay off monthly. Bill payments and connected accounts should be minor.
    - JoshTriplett 11y ago
      Sure, but those are the kinds of steps you take once you've realized you want to limit how much gets tied to your bank account. Similarly, once you go through the pain once of switching email addresses away from an ISP email address, you might move to a provider-independent address. But in both cases, you might not know that the first time.
      - toomuchtodo 11y ago
        Yep, I agree. Its really an education issue more than anything.
  - Spooky23 11y ago
    Good point. I have a "no debit card" policy and don't do automatic payments, with 4 exceptions (mortgage, auto insurance, house insurance, electric/gas company) The first three are paid from a dedicated account. The electric company pays me to do pay automatically, so I do. :)
- ssharp 11y ago
  I used to occasionally game banks for their account sign-up bonuses. You quickly learn how to set up your accounts so that it takes minimal effort to switch to something else. A few tips to stay nimble and cover your bases during bank changes: 1) Don't use any bill payment services 2) Any automatic payments you do online, set them up for your credit card if you can (I'd recommend this anyway to take advantage of rewards) 3) Keep a detailed list of where your bank accounts details are stored for auto or manual deposits and withdrawals so when it comes time to change accounts, you have a good checklist to follow. 3) Think about setting up a permanent "home base" account that you can transfer money in and out of from other banks. The idea is that you'll always have this account, so it can be used to pay bills, write checks, day-to-day, etc. and you just funnel your direct deposits from other banks into this one.
  - jrs235 11y ago
    That's basically what I do as mentioned in a comment to a sibling of you comment.
- LordKano 11y ago
  I have switched banks a couple of times too. In all cases, it has been because the bank took advantage of me when I made a mistake. It has always been a variation on this same theme. The last time I changed banks was in 2010. I had made a mistake and I overdrew my account by $5 or so. That was obviously my fault and I should have been on the hook for one overdraft fee. My bank, reordered my transactions and caused me to incur 5 overdraft fees. When I called in to complain, they "waived" two of them, leaving me to pay $90 when I should have only had to pay $30. That was it for me. I opened an account at a Credit Union and left about $5 in the bank account so they'd have to keep paying to send me statements. That went on for over a year until the bank implemented a $2/mo convenience fee for paper statements. In three months, my account was drained and the bank closed it. People need to be willing to pick up and leave a bank if the relationship is no longer advantageous. From the bank's perspective, it's always business and never personal. That's how you have to act in return.
  - jrs235 11y ago
    The difficultly, strike that. The complexity occurs when you have setup auto payments. One just has to handle it like any other transitional period. You open a new account with a new bank or credit union and start funding it. You watch your existing bank account for recurring or auto payments coming out and work to switch them over to the new bank account. You have to maintain some money in the old bank account and possibly keep it open for several months or a year. Treat the old account as a temporary savings account with enough money to cover any checks or auto payments that might get drawn against it. After you are certain all auto payments have been transferred or you feel safe and confident then you close the account with the old bank. I primarily use a credit union but I do have a checking account with a regional bank that I use strictly for auto payments, this makes it easy to make sure there's enough money in the account and to transition away in the future should the bank displease me.
    - LordKano 11y ago
      I don't do automatic payments. I won't do automatic payments. It doesn't benefit me so I don't do it. They day after payday, I sit down and determine which bills are due and I pay them electronically. It doesn't matter which bank account I use because I handle them individually, every payday. I could switch banks today and my process wouldn't be interrupted at all.
bovermyer 11y ago
I think the biggest issue with switching banks is that that lowers the average age of your accounts, which affects your credit score.
- elahd 11y ago
  That only applies to credit cards. Bank accounts don't even register on your credit report (overdraft lines may show up).
- berberous 11y ago
  Well, the age of your checking/savings does not matter. You could just leave your old credit card open and never use it (although this does creates some minor but annoying extra cognitive load).
jburwell 11y ago
Switching banks is complete PIA. However, services like Mint could eventually make it much easier to do. Today, they aggregate and analyze data across multiple across multiple accounts. As they start get into executing transactions, it will be become much easier for people to simply "repoint" transactions.
morgante 11y ago
> do not have bank account number portability built in What do you mean? I don't see how one would even conceivably bring an account number from bank to bank, let alone why it would be desirable. In my experience, it's actually quite easy to switch banks. No more than 30 minutes tops (open account, change credit card autopay).
jarek 11y ago
It's also a regulation / regulatory capture issue. The UK has a switching regulation set up so that all you have to do is go into the new bank and tell them your account number at the old bank. All scheduled deposits and withdrawals switch over with no further effort on your behalf. (Then again, they also don't have things like paper checks anymore.)