Don’t Like Your Bank? Now You Can Easily Switch Your Billpay

Posted by 7 August, 2008 (3) Comment

My wife and I bank primarily with Wells Fargo, and there have been quite a few instances when we have REALLY wanted to change banks. We started accounts with Wells Fargo because of convenience – there are quite a few branches in our area and we really enjoy the online bill pay service they provide. However, we dislike that we are sometimes charged for withdrawing our own money (“foreign” ATM fees).

There are a few things in this world that make me climb onto my soap box and this would be one of them. I find it borderline immoral that people should have to pay to withdraw their own hard-earned money, especially when it is a privilege for any bank to hold anyone’s money in the first place! And how, exactly, is charging useless fees tantamount to good customer service? Grrrr! *climbing down now*

So this begs the question, do you like your bank? Do you want to switch, but like us, dread the hassle? There are numerous banks are beginning to offer easy options for switching bill pay from one bank to another. One such service is Bank Switcher. I have not personally tried their service, but it is definitely worth a look. They have a 3 step process per their website. Bank Switcher analyzes the transaction history from your current checking account to identify all the automatic payments in step 1. Step 2 displays the transactions you can switch and allows you to choose which bills you would like to include in the switch. In Step 3, Bank Switcher states that in less than 10 minutes, you can print and save your Switching Checklist with the instructions and forms you’ll need to switch your bills. Again, I have not used the service. It’s free so that’s definitely a perk, but I suspect that they receive something from the bank you switch to.

My take is that it’s a service to look into, but if you are worried about inputting your current banking user name and password into a foreign website, then you have other options. I’m willing to bet that a lot of banks are more than happy to have customer service help you switch your bill pay. Recently I visited a local Capital One branch, and they offer a Switch Kit system which can be found on their website. Before making the switch I would look over the steps to switching banks and decide whether it is worth your time. These switching kits and systems appear seamless, but my guess would be that it’s not as easy as stated. I would review Bankrate’s steps to changing banks below, and then make a decision (From Bankrate.com):

Steps to switching banks:

Analyze your reasons for switching banks, then contact your current bank. It may be able to accommodate your requests so you won’t have to move on.
Open an account at your new bank before closing your old account(s). This enables you to write checks, use the ATM and make deposits and withdrawals during the transition.
Keep open your old direct deposit and auto bill-paying account(s) until those recurring transactions have been successfully redirected and appear on your new account statement.
Be sure to leave sufficient funds in your old account to cover automatic payments in case the changeover takes more than one billing cycle.
Don’t close your checking account until all outstanding checks have cleared.
Be prepared to provide account and bank routing numbers for your old and new accounts when canceling, establishing or redirecting direct deposits and auto payments.
Have your old bank verify in writing that all accounts, including debit and credit cards if applicable, have been closed at your request with no balance outstanding.
Keep all closing statements for your records.
Don’t forget to empty your safe-deposit box, turn in the key and collect your deposit, if any.

If you enjoyed this article, please check out the other articles on this week’s edition of Carnival of Personal Finance!

Categories : Frugality,Personal Finance Tags :

3 Ways to Know if Your Bank is in Trouble

Posted by 3 August, 2008 (1) Comment

This topic of conversation came up during a real estate investors’ meeting this past Saturday. We were trying to
figure out ways to determine whether or not our banks were
in trouble. Gerard Cassidy and his colleagues at RBC Capital report that AT LEAST 150 banks will fail over the next year (Marketwatch). While there most likely isn’t a whole lot to worry about IF you have under $100,000 in an account with your bank, it’s good to stay on top of your finances.
I just happened to see a link that J.D. at Get Rich Slowly
posted here to Bankrate.com. They rate all of the banks
around the country based on their CAEL rating. The CAEL rating measures capital adequacy, asset quality, profitability, and liquidity. The rating system is shown below and is based on a star system of 1-5 stars with 5 starts being the best, or safest in this case:
Safe & Sound CAEL rating system
Safe & Sound CAEL rating
Definition
Star rating
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««««
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A second way to know if your bank is not doing so hot financially is to check on their Texas Ratio:

The Texas ratio is a measure of a bank‘s credit troubles. Developed by Gerard Cassidy and others at RBC Capital Markets, it is calculated by dividing the value of the lender’s non-performing loans by the sum of its tangible equity capital and loan loss reserves.

In analyzing Texas banks during the early 1980s recession, Cassidy noted that banks tended to fail when this ratio reached 1:1, or 100%. He noted a similar pattern among New England banks during the recession of the early 1990s.
(wikipedia.org)

Thirdly, visit Bauer Financial’s website. They are a third-party that ranks banks and credit unions:

“BauerFinancial, Inc. has been analyzing and reporting on the financial condition of the nation’s banking industry since 1983. With our help, countless depositors successfully navigated their way through the savings and loan crisis of the ’80s when others lost billions of dollars in uninsured deposits. Through the years BauerFinancial has earned the reputation of “the nation’s bank rating service”. Hundreds of newspapers depend on our ratings for their readers and federal and state regulators refer thousands of inquirers to us each year.”

Most of your larger banks are “secure” meaning that the government would not allow some of the larger institutions to “go under” because of the overwhelmingly disastrous national consequences. While this is comforting, and the FDIC insures up to $100,000 per account, it’s certainly nice to be aware of your bank’s status for the peace of mind it may bring you.

On another note, I just got this published on my first carnival, carnival of personal finance. Go Check it out here.

Categories : Personal Finance Tags :