Fed up with your bank's fees? How to move your accounts

At first, it seemed like the perfect match. Thoughtful gifts. A smile every time you walked in the door. An occasional note thanking you for, well, just being you.

But like so many romances that looked promising at first, your relationship with your bank has soured. You've been ground down by ATM fees, overdraft charges and penurious earnings on your so-called interest-bearing checking account. You're angry and you want out. But breaking up with your bank can be messy and expensive, especially if you use direct deposit, online bill payment and similar automatic services.

Because of the hassle, most consumers don't switch banks unless they move to another part of the country, says James Van Dyke, president of Javelin Strategy and Research. Every year, only about 11% of bank customers change their bank accounts, he says.

While consumers often complain about fees and services, Van Dyke says, "It takes dynamite to remove them from their bank."

However, attitudes may be changing. While the overall percentage of bank account switchers remained about the same during the first quarter, 44% cited higher fees as the reason for the change, up from 36% for the past 12 months (see box), according to a Javelin survey. Only 8% cited a move as the reason for the change, vs. 26% for the past 12 months.

The findings suggest that consumers who have long complained about fees and services "are getting up and walking away," Van Dyke says.

Banks have given them plenty of reason to leave. Average ATM and bounced-check fees continued to soar last year, according to Bankrate.com. Banks have also made it easier for consumers to overdraw their accounts with checks, ATMs and debit cards, triggering hefty overdraft fees. Meanwhile, the average interest-bearing checking account is paying less than 1%.

In this tight-fisted economy, there's no reason to pay more for banking services than necessary — especially when there are so many banks and credit unions vying for your affections. Some community banks and credit unions are offering interest rates of 4% or more on checking accounts if you meet certain requirements, such as using your debit card at least 10 times a month. You can find more information about rewards checking accounts at checkingfinder.com or bankdeals.blogspot.com.

How to orchestrate a painless breakup:

•Take advantage of "switch kits" offered by some banks and credit unions. These kits, typically available online or at bank branches, provide all the forms you need to change direct deposits and automatic payments. They also contain forms you can send to your old bank and other institutions, informing them that you're closing the account.

•Leave a cushion in your old bank account to cover outstanding checks or debits. You're probably not going to forget to change your mortgage payments, but you might overlook the monthly debit for your Netflix subscription, or the quarterly deduction for your health club dues. For that reason, it's a good idea to leave your old account open for at least three months, says Marc Hedlund, chief executive of Wesabe, an online money-management service. Every time you get an automatic payment on the old account, switch it to the new one, he says.

What you want to avoid is having payments hit your bank account after it's been closed. Some companies will send a bill that has bounced back to a collections agency, Hedlund says.

•Set up online accounts for your new and old bank and monitor them frequently. That will make it easier to determine whether your employer, mortgage lender and other businesses you deal with have switched over to your new account, says Bill Hampel, chief economist for the Credit Union National Association. You can also use your online accounts to move money between your new and old account as needed, he says.

If you have money in a savings account, Hampel adds, it's not a bad idea to deposit some of it in your old bank account temporarily, just in case there are some outstanding checks or debits you've forgotten about.

•Don't burn bridges with your old bank. Your ex may need to get in touch with you weeks, or even months after you close your account, so make sure it can find you. If you move or get a new phone number, notify your old bank in writing. Don't rely on a phone call.

Sandra Block covers personal finance for USA TODAY. Her Your Money column appears Tuesdays. Click here for an index of Your Money columns. E-mail her at: sblock@usatoday.com. Follow on Twitter: www.twitter.com/sandyblock