Banks: Many Americans dislike them and we may speak of poorly of them. As soon as they do something we deem as ethically or morally wrong, we often jump on the opportunity to chastise them. Since 2008, this sentiment has only heightened as many Americans have come to view financial institutions as greed-filled entities.
Although many of us have a bad taste in our mouths about big banks, some of us have a specific financial institution with which we’ve been doing business for many years. We’ve come to know the tellers and management personally, and we not only trust these people with our money, but we also like them. We may even like the business as a whole.
On the other hand, there are many of us who switch financial institutions frequently. We can’t seem to find the right place where they’ll treat customers decently. In our opinion, they unjustly charge us fees and are only out to get our money, as opposed to protecting it. Why is it that some of us like our banks and others don’t like any financial institution at all?
Money Rates recently conducted a survey on banking and financial habits, and how such habits relate to a consumer’s discord with a bank. The survey, which included 2,000 respondents, found that those who have poor financial habits are more likely to be unhappy with their financial institution. Using the results of the Money Rates survey, coupled with supplemental information, we gained some insight on the reasons Americans are unhappy with banks.
1. Frequent Overdrafts
Overdraft fees are notoriously high, and many customers, at one time or another, have faced these fees. The Center for Responsible Lending reports the median overdraft fee at $35, and during the year 2011, American consumers paid $16.7 billion in overdraft charges.
Money Rates’ survey results found that most bank customers try to stay away from these fees – two-thirds of those surveyed never overdraft their accounts, nor do they bounce checks.
For a small portion of customers, though, overdrafting is a recurring problem, with 15 percent of survey respondents reporting 6 or more overdrafts in one year. An even smaller percentage, 6 percent, say they’ve overdrafted more than 12 times during a one-year span, averaging more than one overdraft per month.
These customers who face frequent overdraft fees encompass a large portion of the bank-hating population. Nearly nine out of 10 (86 percent) of those who overdraft on a regular basis report having complaints and issues with their banks, with one-third of this group having disagreements with their financial institutions on a weekly basis. On the contrary, of those who never overdraft their accounts, around 90 percent of these individuals report they rarely or never have any problems at all with their banks. Overdrafters are also more likely to leave their banks on bad terms.
2. Poor Budgeting Habits
In addition to overdraft fees, customer budgeting habits also have a lot to do with their level of satisfaction with a financial institution. Four out of five of those surveyed stay at least somewhat on top of their budgets, monitoring them at least once per month. Most of these respondents who are responsible with their budgets — 72 percent, in fact — rarely have any disputes or conflicts with their banks.
On the other hand, those who are lacking in the budgeting and record-keeping areas are more likely to have problems with their financial institutions. The survey found those who neglect to update their financial records at least monthly are twice as likely to have had three or more bad bank breakups.
3. Where Everybody Knows Your Name
A recent poll by Kasasa suggests that 78 percent of Americans blame big banks for the financial crisis we are now recovering from, and another 66 percent of Americans are still angry at the big banks for the crisis. Big banks are just as their names imply — large corporations — as opposed to small local establishments, and 26 percent of Americans report feeling guilty about banking with one of these giants.
Most Americans — 78 percent — say it’s important to bank with a smaller, more local provider. Many prefer community banks and credit unions, stating they’d rather their money go to their communities and that they’d prefer to help promote employment in their own localities. Customers want to trust their bank, which 93 percent of credit union and local bank customers do, as opposed to 31 percent of customers who trust big banks.