By Quentin Fottrell
American consumers have a love-hate relationship with their banks. Some 33% customers say they will leave their bank if it introduces higher credit fees, according to a new survey by market consulting firm Trig. And another 43% said they would change their method of payment to either cash (28%) or credit cards (15%). Perhaps more concerning: 14% said they don’t know what they would do or don’t have a debit card.
However, experts say it will take a lot more than the “Occupy Wall Street” protest or higher debit card fees, like the $5 monthly charge recently introduced by Bank of America, to push people toward credit unions and community banks, says Dennis Moroney, senior analyst at TowerGroup consulting firm. “Only when banks start to lose large numbers of customers will they adjust their prices.”
What customers say in surveys and what they actually do are two different things – especially when it comes to leaving their bank. When banks raise fees, Moroney says most people stay put. Why? It’s too much trouble to move all of their direct debits, especially if they use their checking account for their mortgage payments and salary. One bounced mortgage payment can impact your credit rating, he says.
This appears to go against popular sentiment. As Pay Dirt reported, consumers “strongly distrust” the legitimacy of banks, with over 70% saying that bank charges are unfair, according to a survey by marketing firm Russell Herder. The American Bankers Association says there’s a reason: 11% of consumers spend $3 or less in monthly service fees, while 14% spend $4 to $10 a month.
Read more on how to cut bank fees here.