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Tim Chen, Technorati: Saturday, November 5 is Bank Transfer Day


Saturday, November 5 is Bank Transfer Day
by Tim Chen, November 2, 2011

chers—

lots of jpegs

—rk

• RSVP to Bank Transfer Day
• @BankTransferDay on Twitter
• Download Flyers

• Find a Credit Union in the United States
• Find a Credit Union in Canada
• Find a Credit Union in the United Kingdom

• Contact Bank Transfer Day

Read the FAQ:
• Why was BTD started?
• Who’s behind BTD?
• How do I join in?
• Why can’t I invite people?
• Why credit unions?
• Won’t this cause another depression?


Ever heard of Bank Transfer Day? A week or two ago, your answer would likely have been no. But the holiday devised by Kristen Christian, a disgruntled LA art gallery owner, has gained steam rapidly. If you’ve missed the buzz, let me fill you in: This Saturday, November 5th, will mark the first ever Bank Transfer Day, a holiday meant to inspire the masses to close their accounts at big-name banks like Bank of America and Wells Fargo and shift their finances into credit unions and smaller for-profit banks.

The reason? Christian, along with my great aunt, your best friend, and the neighbor’s dog, is fed up with the high fees these banks are charging for essential services like checking accounts and debit card transactions. While an increasing number of big banks are backing down from the fees they’d announced or implemented in recent months, this isn’t likely to dissuade thousands of accountholders from moving to greener pastures.

Beyond free checking and debit cards, consumers stand to find better interest rates as well. According to NerdWallet’s analysis, credit unions’ savings accounts give nearly twice the interest rates as big banks’. In addition, they tend to offer lower interest rates and fees on credit cards, many eschewing penalty APRs and cash advance or balance transfer fees.

Consumer dissatisfaction with the banking status quo is great news for credit unions, which have long struggled to compete against big banks. Currently, credit unions serve only about 6% of American consumers, a number that has remained steady for the past few decades.

Whether Bank Transfer Day and, more generally, the current atmosphere of distrust and outrage over banking practices drive consumers to move en masse to credit unions, remains to be seen. But you’d better believe the credit unions are cashing in on Bank Transfer Day. In honor of the holiday, many are extending Saturday hours, and some are offering special promotions for people who become members.

Credit unions can’t let it all get to their heads

Some analysts warn, however, that credit unions should avoid getting too overzealous in their attempts to snag new members through promises of free banking services. Rather than get caught up in a rising tide of feel-good advertising promises, it’ll be important for credit unions to maintain trust with an already disillusioned public by providing clear and straightforward information on what they’re actually offering new members.

Free checking, for example, is too often fraught with hidden minimum balance or direct deposit requirements.

Likewise, free debit transactions too often means free debit card transactions if you sign for purchases. When there are fees associated with PIN-based transactions, it’s important for credit unions to make this clear from the start

And for Christian and her tens of thousands of Facebook followers, it’s critical to remember that just because most credit unions are community-based and all are not-for-profit (and generally awesome), it’s still important to shop around for the one that will give you the lowest fees and best rates, and you’ve still got to read the fine print for yourself.

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