How to Tell If It's Time to Switch Banks

Whether the issue is overdraft fees or outrageous cash-advance charges, unfair interest rate hikes or unjustified credit card limit reductions, consumers have had plenty of reasons to be mad at the banking industry recently. The Center for Responsible Lending released its Shopper's Guide to Better Banking on Oct. 18 -- a checklist of tough questions consumers should ask their bank to make sure that their banking needs are being met and that they aren't paying unnecessary fees.

The guide tells consumers which key questions they should ask their bank and what they should watch out for in the areas of checking-account practices, credit card terms and cash advances. Consumers can give their bank a red flag or green flag for each question as they go through the guide and rate their bank's total performance at the end.

"We wanted to create a guide, that in a thoughtful way, takes people through the kind of analysis we think consumers ought to go through if they want to switch banks," says Kathleen Day, spokeswoman for the Center for Responsible Lending.

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Day says that since the banks were bailed out, consumers have been calling her organization, angry about the foreclosure mess, the lack of loan modifications and the lack of lending to small businesses. Many callers felt the banks haven't lived up to promises that were made but didn't really know what they could do about it. While she didn't encourage people to leave their current banks, Day says the guide would help them rate banks against each other to determine if they're getting the best banking services they could.

"Instead of consumers just being mad, they can channel it in a constructive way by choosing products that are best suited to their needs," says Day. She adds that the guide would help people determine which bank was best for their personal needs: "Having consumers asking tougher questions could lead to more and better competition among the banks."

Day says there's already evidence that consumer action has worked to change bank policies. She points out that Citibank (C) and Bank of America (BAC) stopped offering debit card overdraft protection after numerous consumer complaints.