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How to break up with your bank

Bank customer uses ATM machine.

TEXT OF INTERVIEW

Tess Vigeland: Dozens of you have written to us with tales of egregious fees, bad customer service and just a generalized fury over bailouts and bonuses. You're mad as hell at your bank and you're not gonna take it anymore! In fact, the Better Business Bureau says complaints against banks jumped 42 percent last year.

So, you're leaving. But do you know what you're doing? If not, we've got some advice from Noreen Perrotta. She's the financial editor for Consumer Reports and she tells us there is a right way to switch.

NOREEN Perrotta: How you start is you decide what you need from your bank. Most people will need a basic checking account with a debit card, you'll probably want to have a linked savings account as well. You may also need to borrow -- you may need a mortgage, you may need an auto loan. So you have to evaluate a. how much the banks are going to pay you for your deposit, how much they're going to pay on your money; b. how much they're going to charge you for these services that you need, and, if you're borrowing, what you're going to pay them for the loans. And it's all over the place.

Vigeland: Now, I have mentioned on this program that I am in the middle of switching banks. Can you go through some of the other things that you have to make sure are in operating order, so that your financial life doesn't go into upheaval?

Perrotta: Yes, yes. You have to switch your direct deposit, if you have your pay check or your Social Security check deposited directly into your checking account -- you need to switch that first. Certainly, your automatic payments you may want to move to a manual system until you complete the switch. Some banks have switch kits; they'll help you facilitate all the transfer, which I would encourage you to ask about that, if your new bank has that.

Vigeland: That's a good idea. I will do that.

Perrotta: And another thing that people don't think about, and maybe you should think about, this is when you're taking money out of a bank, you may lose some accrued interest, if you take it before it's actually posted to your account. Even at these nominal interest rates, you don't want to leave any money on the table.

Vigeland: And what about the difference between banks and credit unions. Can you just run that through for us very quickly?

Perrotta: Well, OK, a credit union is like a collective. It's owned by its members. They don't have shareholders, as I said, they're owned by the members, so there's no huge executive structures, where a lot of high-paid people at the top are taking some of your money.

Vigeland: Sure.

Perrotta: They frequently offer the best loan rates on car loans and mortgages. On credit cards, the limit is something like 18 percent for a credit union card.

Vigeland: You know, we've mentioned that people are running away from lots of specific issues -- overdraft fees, annual charges for debit cards -- are things really better elsewhere? Or maybe the good guys enact these too, once you switch?

Perrotta: Well, it can happen. There's no way to know a. that your bank will stick around or not merge with another bank or b. that they won't need to start imposing fees if they run into some financial shortfall.

Vigeland: Yeah. Do you think being mad at your bank is good enough reason to switch?

Perrotta: Well, it depends how mad and what you're mad about. If you're mad about the Wall Street bail out, I personally wouldn't move on that account, and I haven't. I do have money in a major bank, basically, because it's so widely inconvenient for me to move, and I haven't personally been mistreated by them. If I thought that the bank was screwing me in some way, I would definitely move. And that kind of anger, you really need to vote with your feet when you feel like you're being taken advantage of.

Vigeland: Noreen Perrotta is finance editor at Consumer Reports, and we've been talking about how to move your money. Thanks so much for your help.

Perrotta: Thank you very much.

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