How to switch to a more ethical bank
How I did it: This took several months to acheive. Bear that in mind while you read this.
Firstly, find an ethical bank. Personally I was lazy in this aspect. I walk past the head office of the co-operative bank whenever I walk to work and knew they were supposed to be a nice bunch. It turns out that they had a separate internet only bank (smile) which had slightly better interest rates than the bog standard co-op bank. So that's the bank I opened my account with.
The obvious next step is to actually open an account. It was a while ago so I can't remember it being much of a problem, but I remember it taking a while.
Next up I switched the bank account with the company I work for. The big thing to remember at this point is that all your money will be going into one account, but all the direct debits/standing orders will still be coming out of the old one. You need to have some cash left in your old account at this stage (which became really important to me later on).
Then comes the hard work. Finding out all the people who have direct debits and getting them to switch over. This was a real headache but there is an easier way if you don't care about your credit rating or about getting nasty letters - just close the old account and wait for companies to complain you're not paying them. Naughty, but it does work. I'd not recommend this. Do the next step instead.
At this point you should have a nice shiny new bank account that's being used for everything. Or so goes the theory. Usually there'll be one or two things that have fallen through the gaps. Leave the old account for a couple of months and check on the activity on that account. If you've remembered everything then you shouldn't see anything. If you've forgotten anything they'll show up and then you can deal with them.
Once you're happy with that, go ahead and close the old account.
And that's how I did it. It was a lot more work that I anticipated. It turns out changing a bank account is actually quite hard work - most people jsut don't expect you to do it.
Lessons & tips:
- Don't believe the bank when they say they've closed your accounts. Mine closed my bank account but didn't cancel the associated credit card. That caused some grief because the bank said they were going to pay off the credit card from the final balance of the bank account but didn't. In general, check your old bank does what they say they are going to. It's not in their interest to close your account so they tend to be awkward about it.
- It's a good idea to have a couple of months worth of outgoings as spare cash. It gives a decent grace period to find monthly outgoings.
