Why Traditional Banks May Be the Wrong Choice for You

The future of banking is changing. Online and local banking options have become much more dependable over the years. With high interest rates and federal fees, traditional banks may not be the right choice for you. Traditional banks often offer poor customer service, deny loans, and

Poor Customer Service

One of the major drawbacks for traditional banks is their lack of understanding of a customer’s needs. Many large banks cut down on procedures to offer a generalized service and save them money. The problem is their formulas do not fit every individual and their needs. Employees generally treat their customers with less respect because they are not trying to win you over as a customer when they have plenty to keep their business running. While smaller institutions have a smaller demographic, that allows them to gain insight into who is banking with them and what their customers need.

Getting Denied Loans

Many large banks are less likely to approve you for a loan. To maintain the structure of their business model, they are very strict with which requirements you must meet to qualify for a loan. They want to make money, not lose money, when distributing and collecting loans. If you apply for a loan and they deny credit, there are usually a few reasons why you do not qualify. Banks are required to notify you with a letter that states why they are denying you a loan. Use the letter as an opportunity to improve your financial health and qualify for loans later down the road.

Financial Fees

Generally, the fees at a traditional bank are higher. Interest rates on loans and banking fees for insufficient funds are typically smaller at a local institution. For example, Bank for America changes a $35 nonsufficient funds fee while many local credit unions charge $25. Identifying your banking needs and then comparing them with the institutions offered within your area will be very helpful in determining which service you should select.

Large, traditional banks have the capital behind them to offer consistent and reliable resources. With more options and better convenience, they can be accessed almost anywhere in the country. Traditional banks also offer poor customer service, deny more loans, and charge increased financial fees. Identify your banking needs so you can decide if they are the right choice for you and your business.

Read this next: Why You Should Take Out a Home Equity Loan

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