What’s OK for Sports…
If you are a sports fan you know what it is like to love someone despite their faults. Certain fans may know this more than others (Browns fans we’re thinking of you) but all know the sting of being terrible. We have loyalty that runs deep through our histories, the ups and downs of each team’s success and sometimes beyond common sense. We love them and are willing to stick with them through it all because that’s what being a true fan is.
What we’ve noticed is a tendency for some to apply this principle to a particular financial brand. This loyalty sometimes extends through similar types of ups and downs and even against common sense. The difference is that this type of loyalty can be harmful to you and your family. Your bank is not a football team. Your bank is trying to make money. If they aren’t a good fit for you moving on is not a party foul. It’s part of making responsible decisions that don’t start with phrases like “but I’ve always banked with them.”
Here are three reasons why brand loyalty can hurt you.
1. You’re willing to accept fees, percentage cuts and stipulations that you don’t need to.
So many banks out there are willing to have no fee checking, savings and credit card accounts. Alongside no fee accounts there are plenty of banks that offer discounts or interest rate increases for using cards a certain amount each month or maintaining a certain balance in the account. If you’ve been banking at the same place for 10-15 years you may have an account with these fees that newer accounts don’t have.
If you really love your bank but are paying fees and percentages that aren’t being charged by other banks or different accounts within your own, call and ask them about it. See if your bank is willing to make a deal since you’ve been a loyal customer. Should they refuse to make the deal tell them you’ll be moving your business elsewhere. We aren’t recommending hopping from one bank to the next as each flashy new ‘no fee’ plan arises, but make sure you’re not losing money just because you don’t want to go through the hassle of switching accounts or asking questions.
2. Not all bank accounts were created with the same type of customer in mind.
Many times young people head out to college or the workforce and use all of the same accounts they first opened as a high school student, often wherever their family banks. This is fine. It’s also pretty sweet when mom or dad can slip you some extra money when you’re still trying to figure out what budgeting looks like.
However, at a year or two out of college you’ve probably changed quite a bit. Likely you’re living in a new place, have a different level of income and are starting to think about financial priorities like savings and retirement. Certain banks have great advantages for those just starting out with low minimum balances and affordable rates for young people with short credit history. You also might want a bank willing to teach you what’s going on rather than expecting you to understand financial jargon.
Sticking with your parent’s bank is fine for a while but it’s an important step to figure out what you need in a bank and to even take a look and see what’s out there to research your options. Do you want to travel? You may need a bank with many international locations and limited foreign transaction fees. Want to ‘shop local’ for banks and have generally lower fees with some tie in to your community? Maybe look into a credit union. We have suggestions on our sister site Myxur about what we feel are the best types of banks but the point we want to drive home is that banks are not one size fits all, shop around!
3. You don’t need to keep everything in one place.
There is a certain level of convenience that comes form having all your accounts in one place. Many large banks use this as one of their primary sales pitches, but it isn’t always an advantage.
If you’ve kept everything at one place for convenience ask yourself a few questions:
- Do I have savings goals that could benefit from a more competitive interest rate?
- Is there a credit card somewhere else that offers better rewards, lower interest rates or potential benefits based on my unique spending habits?
- Where will my dollar go the furthest for these separate needs; day to day checking, investing and saving?
You may have a great bank that deserves your loyalty. Perhaps you even have long-time customer benefits. However don’t assume that it’s always better to stay where you’ve been rather than to research a new bank and new accounts that could provide you a number of financial advantages. Your banks ‘feelings’ are secondary to… just about everything,
Do you love your bank? Have you been considering switching? What’s made you want to switch?