Question: What are the pros and cons of transferring from a troubled megabank to a small bank? Charles. Winterville, N.C.

Answer: Personally, I don’t have an ingrained bias against large banks. Big is not synonymous with bad. But many small banks, community banks, and credit unions offer better services these days.

Historically, the main advantage of a big bank was its ability to offer a wide range of banking services for both consumer and business customers. The services were especially useful for people who traveled a lot, perhaps even overseas. In the early years of ATMs and online banking the big banks also had the resources to build large, convenient networks.

But those traditional competiitive advantages have eroded. Online banks often pay better rates to savers since they aren’t absorbing brick-and-mortar costs. Their loan terms are more attractive, too. In many cases community development banks and credit unions have low-fee and no-fee savings and checking account products to customers. And many of these local financial institutions now have excellent online services, too.

Fact is, many of the beleaguered big banks are not doing right by their customers these days. For instance, a number of the bigger banks are hiking fees and penalties to shore up their crumbling finances–and I thought many fees and charges were already too high. This includes making their credit cards more expensive. The behavior of many big banks is an opening for competitors.

It always pays to shop around, but now more so than ever. The real question is whether the banking services are good, the cost of doing business low, the customer is treated fairly, and the online presence up-to-date. In many cases there is no penalty to going small and independent.