I’ve been a loyal Citibank customer for over 20 years. Not for any really good reason. It’s just been inconvenient to switch. Turns out, most people stay with their banks for convenience and only switch when they change jobs or neighborhoods. Except, of course, when the bank does something really annoying. A fellow Renegade told me the story of how Wachovia had been his long-time bank until the one time he really need them they failed miserably. He went to the bank to pick up a cashier’s check on the day he was supposed to close on a new house but the bank’s computer system was down and they couldn’t provide the needed check. They basically said, “you are nobody until our system comes back.” Not surprisingly, he switched banks the next week.
In his book “The Ultimate Question”, Fred Reicheld advises customer-centric companies to avoid penalizing your best customers and to stop with the annoying extra charges. For example, airlines continue to penalize the business traveler who basically keeps them in the air while rewarding the infrequent flyer with the cheapest possible fares. I noted in an earlier post how thrilled I was with Embassy Suites for providing a free business center which including free printing paper. (On a side note, when I stayed in the Aladdin Hotel in Vegas recently, they even charged for receiving a package for me!)
Banks have numerous ways to enhance their product offerings and reduce the everyday annoyances. Commerce offers free change counting machines and is open seven days a week so you can bank at your convenience. Bank of America has its “keep the change” program which is complicated to explain but results in up to $500/year in extra savings. HSBC offers the BankCab which provides free rides to HSBC customers in Manhattan (a Renegade program and the reason my family keeps accounts at HSBC.) And there are many more examples including Citi’s Thank You program (which they don’t really push to existing customers sending the unfortunate message that new customers are more important.)
So back to Citi and me. A few months ago, I wrote a lot of checks and unknowingly (okay, I admit to not balancing my check book on a daily basis) tapped into my overdraft account. The idea of overdraft is to protect busy/distracted people like me from bouncing checks. The good news is that I didn’t bounce a check. The bad news is that Citi charges interest the second you tap into your overdraft account. Fair enough. Banks have the right to charge for a loan. But two days later when I deposited enough money to cover the overdraft I thought all was well. Wrong again, interest breath! Turns out, Citi doesn’t automatically transfer money from your checking account into your overdraft account. By the time I got my monthly statement, I had racked up quite an interest charge. Annoyed I decided to call Citibank and discuss this. Naturally I spoke to someone in Bangalore about my accounts here in New York. My argument was “you had the money, overdraft accounts have no other purpose than to protect checks from bouncing so why wouldn’t you automatically transfer the money?” His ever so polite answer was “sorry sir, you have to transfer the money yourself.” So I asked “is the interest you earn really worth losing a customer?” His answer, again ever so polite was “sorry sir, there is nothing I can do.” Well, there was something I could do. Find a new bank.
About a month ago I had lunch with a friend who had just joined First Republic Bank. We started tallking about banks and I mentioned my annoying experience with Citi. She noted that First Republic is really a “customer friendly” bank. For example, they automatically transfer money from the overdraft account into the checking account (instantly solving my pet peeve). First Republic also reimburses cash machine fees for withdrawals from any ATM all over the world. Ready to move, my soon to be banker then noted that First Republic would even send over an intern to populate my online account with payees from my Citi account to make the transition smoother. Sold. So long Citi. Hello First Republic.