My husband and I recently bought a new (used) car. Because we found an incredible deal through our local credit union, we decided to finance some of the purchase. In setting up the loan, I had the most incredible experience – a dedicated bank officer who facilitated the paperwork digitally, and was quick, reachable, and very friendly. The process was so smooth that I decided then and there that I was breaking up with my big mega bank and going the credit union route. How had I missed out on this Cadillac service for so long?
There are many reasons that people leave their bank for a credit union or another financial institution. Competitive loan rates, personal service, ATM/branch availability, technology offerings, and seeking a member-owned model are typically some of those reasons (here’s a good read on the differences). But making the switch can seem like a ton of work (especially if you have everything automated like me). Here are some tips for leaving your bank for good.
Take it Slow
Give yourself a month or two before totally cutting ties with your original bank. Open your new account and connect it to your old bank account, since there will be numerous times that you will need to move money back and forth while you are transitioning. Once everything is setup with your new bank, you can close your original bank account (don’t worry, this does not affect your credit).
Redirect Direct Deposits
Start the transition process right after a pay cycle/scheduled deposit so that you have time to change the routing information with your payroll company or financial institution. This will allow you to change the rest of your scheduled autopays and know that money will actually be in the account when the bills are due.
If you have your credit cards set to automatic payments (which is a great way to never miss paying a bill), make sure to change the account that pays these cards. Some companies bill your bank account directly because they don’t accept credit cards (like many utilities) so don’t forget to change those too.
Go Beyond Digital
Make arrangements to get a new ATM card, checks, and any other banking accoutrement that you might need. Because of the push to go digital, many banks require you to request these items separately.
Work Around Required Autopays
Some loans require you to have a checking account with their bank and have autopays turned on to get certain deals. If you have any loan arrangements like that, you may want to leave your old bank account open, and just automatically transfer enough money from your new bank into the old bank account for payment of that loan monthly. Most direct deposits allow for automatic deposits to more than one institution, so this can be setup with your payroll company. Put a little extra in that account to pad it for overdraft protection, too – worst case you end up with a little extra to go towards that loan at the end of the year.
There are so many types of banks available – credit unions, fully online banks, small local banks, and big branches. Since everyone wants different things from a bank, decide on the perfect model for you and make the switch. All in all, making the move did not cost me all that much time. And I am very happy where I have ended up.