The average American stays with their bank for over 14 years.
Why it matters: Warren Buffet recently predicted that more bank failures are coming, in large part because they’re not offering consumers the right incentives. “Accounting procedures have driven some bankers to do some things that have helped their current earnings a little bit and caused the recurring temptation to get a little bit bigger spread on record, a little more than earnings,” he says.
There are many reasons why consumers remain with their banks even when better incentives exist elsewhere. Inertia is a powerful force that can paralyze even those with the best of intentions — of leaving.
Here are four other reasons why people don’t leave their banks.
Fear of the unknown
Fear of the unknown is a powerful deterrent in all aspects of life. When it comes to banking, this fear stems from many different sources, including fear of losing money or fear of not having access to the same services. In reality, switching banks can be a relatively straightforward process that doesn't require much effort.
Before you switch banks, it's essential to find an alternative that meets your needs. Many financial services offer online tools and resources to help you compare their services, fees, and rates. Take advantage of these resources to find a company that meets your needs and suits your lifestyle.
Another reason people stick with their bank is the convenience factor. You may have all your accounts and services set up with your current bank, making it difficult to switch to a new one. However, convenience shouldn't be the only factor you consider when deciding whether to leave.
Many financial services offer online and mobile banking services that make managing your finances simple. With features like mobile check deposit, bill pay, and account alerts, you can easily stay on top of your finances from anywhere.
Loyalty is a significant factor when considering leaving your bank. However, loyalty can blind you to the fact that your bank may not be providing you with the services you need or offering competitive rates.
Banks are businesses, and they're competing for your business just like any other company. Loyalty is important, but it shouldn't come at the expense of your financial well-being.
Fear of fees
Fear of fees is a biggie. You may be worried that switching banks will result in hidden fees or charges that you're not aware of. Before leaving, make sure to read the fine print and understand any charges associated with the accounts and services you're considering. With an increasing number of Americans losing faith in banks, it’s important not to let inertia or fear stop you from maximizing your wealth.