It’s no secret that COVID-19 has created a financial crunch for just about everyone. As you look for ways to make your money stretch further, you might have started looking at various bonus offers and considering switching some of your service providers.
Nowadays, almost every bank is advertising new checking account offers, and that “free” money sounds pretty good. But, is switching bank accounts really worth it?
That’s a good question! Stick with us as we explore the pros and cons of taking advantage of new checking account bonus offers.
3 Ways to Get a New Checking Account Bonus
Before diving into the things to ask before switching banks, it’s important to note that there’s more than one way to take advantage of new checking account offers. Most offers don’t actually say that you have to close your old account.
Typically, they’ll require you to make a minimum deposit and perform specific tasks, like completing a certain number of transactions, setting up direct deposit, or using their app. It’s important to read the fine print carefully and understand exactly what you need to do to get your bonus. Once you understand the requirements, you’ll likely have three options:
- Keep your current checking account exactly as it is and open an additional account with the new bank
- Make a partial switch, moving certain payments and deposits over to the new account
- Close your old accounts and move everything over to the new bank
Most people choose the third option because they don’t want to deal with the hassle of managing multiple accounts. However, there are pros and cons to each approach. It’s a good idea to consider the following questions before you decide.
Questions to Ask Before Making the Switch
Sometimes, it’s clear that you need to switch to a new bank. If you’re having problems with your current bank – like ridiculously high fees or poor customer service – then it makes sense to take advantage of a new checking account bonus.
However, if you’re thinking about making a change purely for the extra money, there are some important things to consider.
1. Is the Bonus Really Worth It?
How much money do you need to make it worth your effort? Do you have to jump through a bunch of hoops to get it?
If you’re really cash-strapped then even a small bonus might sound appealing. If the bank is offering something else, like rewards points or a charity donation, you’ll have to consider whether you’ll receive a sufficient benefit to make the change a smart move.
2. Are There Any Drawbacks?
Be careful not to let the bonus offer distract you from the potential drawbacks of working with the new bank. If there are monthly fees or high minimum balance requirements, then it’s likely you’re going to be unhappy in the long run.
You’ll want to look at the new bank’s maintenance fees, ATM fees, and overdraft fees. Also, consider the new bank’s opening hours and whether the website and app are user-friendly. Do they offer other services you need like mobile deposit, easy transfers, and plenty of ATM machines?
Compare all of these things to your current bank and make sure that making the change won’t end up being a downgrade.
3. How Much of a Hassle Will it Be?
To make the switch, you’ll need to open a new account, initiate a transfer, and make sure you meet all of the bonus requirements. Transferring all of your auto-debit bills is usually the biggest hassle.
It’s easy to make a mistake and you could end up missing payments or bouncing checks. This can lead to late fees, damage to your credit rating, and more.
If you’re going to make a full switch it’s in your best interest to make sure the bank you choose is one you’ll want to stick with for the long term. Bouncing from one checking account to the next is rarely worth the trouble, even if you do get a bonus each time.
4. How Much Do You Really Like Your Bank?
Are you at your current bank because you really like the services they offer? Or is it just a matter of habit? If there’s nothing special about your bank and you’re comfortable with the answers to the other questions above, then now might be the perfect time for you to make a switch.
Tips for Finding the Best New Checking Account Offers
Doing a bit of research online will help you find out which banking institutions are offering checking account bonuses and exactly what they’re offering. However, it’s important to consider which offers are most valuable to you.
For example, if you overdraft your account frequently, then switching to a bank that’s offering fee-free overdrafts might be a great move for you. However, if an offer requires a large minimum balance that you don’t think you’ll be able to maintain, then moving to this bank will likely end up being a waste of your time.
Remember, in most cases, looking for a long-term partner instead of just a quick cash bonus will bring you the greatest benefit.
Making Smart Financial Moves in a COVID-19 World
Taking a close look at new checking account offers and other bonuses is one way to give your finances a boost, but that’s certainly not your only option. If you want to keep your finances on track, knowledge is power. We suggest taking some time to browse through more of our financial articles.
We’ll help you stay up to date with all of the latest financial developments and provide you with tips you can start implementing right away.0