Bank branches across America are being shut down at the fastest pace in decades and money expert Clark Howard says that’s OK.
According to the Wall Street Journal, the number of branches in the U.S. declined by more than 1,700 over a 12-month period that ended in June 2017.
The paper’s analysis of federal data found that closures continued in the second half of 2017 as well.
Banks are closing branches at a record pace, WSJ reports
What’s going on here? Changing consumer habits. Foot traffic to bank branches has fallen in recent years as customers do more business at ATMs and through mobile apps.
And the strategy of closing branches isn’t hurting banks, it’s helping them reduce costs and reach record profits.
“A bank to a millennial is his or her smartphone,” Clark said. “By the way, I’m far from a millennial, but for me, that’s true too.”
Bank closures are hitting many rural areas the hardest because there are fewer options. But whether you live in a small town or not, Clark says you’re better off switching to an online bank or credit union for lower fees and higher returns.
In addition, he says replacing closed bank branches with vibrant businesses — like restaurants — can revitalize communities.
“Bank branches destroy the soul of a neighborhood. They’re open very few hours because of the problems with bank robbery — they’re very closed off kind of fortresses — and they’re incredibly expensive to run,” Clark said.
Listen to Clark talk about this issue on The Clark Howard Show Podcast
If you’re interested in switching to a better bank for you, Team Clark is here to help. Follow our step-by-step guide that will walk you through the process of getting started with an online bank or credit union.