More Reasons to Change Banks

Estimated reading time: 5 minutes

In 2014 I wrote about how my daughter got a Student Line of Credit. It helped pay for her second degree. She pursued it as a Chiropractor. Remember, I often talk about being willing to change banks. Unfortunately, my daughter is changing banks due to mistakes by the local branch. This branch is part of the National Bank of Canada. This is the reason I changed banks.

Some of the Issues

The problems started when the line of credit was first set up and has compounded since then:

• It took three visits to get the student line of credit set up (we thought) with the local branch. Once the application forms were set up, the first application for the account was declined. The young lady at the local branch did not know how to do the application. They said No. This happened because the application asked for the entire value of the loan. It covered all four years of the school. There had to be a reapplication to get the loan set up.
• The Student Line of Credit was actually set up as a standard unsecured line of credit. This caused the National Bank head office to call. They called more than once, and were somewhat irate. They asked why the minimum payments weren’t being made to the account. It then took an hour of explanation and investigation. Finally, someone figured out that the account had been set up incorrectly (by the local branch). The only way it could be fixed was by the local branch. They failed (more than once) to remedy this issue. The account should have been set up so that the interest payments accrued. The account would then ask for payments after the term was complete.
• There was an inability to make payments from other banks to the National Bank for this loan. This meant all banking would have to go through the National Bank only (or use Interac transfers to do things). This is also a shortcoming with the CIBC Student Line of Credit.
• The online banking at National Bank never really worked correctly for my daughter. She had to keep calling their on-line help folks to get access to the account. This was just to see what the balance was on the account. This happened every time she tried to access the account. Each time, she would ask, “You have just given me information. Can I access my account now?” The help line person would say “Yes.” It worked that time. The next time, she had to call back in. It would not let her in.
• The straw that broke the camel’s back was the decision made by the National Bank Head Office. They decided to decrease the “ceiling” (maximum for the loan) for students in Chiropractic College. The maximum was reduced by 33% for their entire program. Because of this, the line of credit would not have covered the cost of the entire program. We theorize the reason for this change was that the Chiropractic College in Trois-Rivieres was consulted. They wanted to see how much their program cost. The maximum for the line of credit was lowered to reflect that program’s total cost.
  • This is a serious issue. My daughter is attending college in Toronto. Fees and living costs are significantly higher there. As a result, she was forced to switch banks to avoid running out of money. She is now in the process of moving to CIBC for a Student Line of Credit and free banking. We inquired at the local National Bank branch about the loan cap reduction. We received no clear explanation. We were only told that it was being implemented. Even though she enrolled last year with an agreement for a higher cap, her limit was reduced. This change was due to the new rules.

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Good Reasons to Change Banks

Thanks to a great deal of frustration and confusion lead to my daughter changing her accounts over to CIBC. I was involved in the decision to change. I am a student line of credit guarantor. As Michael James would say, I have a Student Line of Credit. The change of the maximum loan limit was the main reason. However, the other frustrations also influenced the decision. It was certainly a simpler choice.

Remember, never be afraid to change banks, especially if you feel that you are not getting a very good deal. Also, this is why student debt is so darn high.