BEND, ORE. (CNN/Money) – The pending merger of J.P. Morgan Chase and Bank One is a big deal on Wall Street. But, the merger's effects on Main Street probably won't become apparent for at least a year, say experts.
When they do, the banks' customers may benefit from a larger network of branches and ATMs and more product offerings.
"Now you have access to a distribution network and ATMs that is almost national," said George Albright, chairman of Speer & Associates, a financial consulting company that has worked with both institutions. "From my point of view there is a benefit of being able to bank with my bank anywhere."
Assuming the Federal Reserve and shareholders approve the deal, the combined entity, which will retain the J.P. Morgan Chase name, will be nation's second largest bank, a $1.1 trillion behemoth with 2,300 branches in 17 states. Citigroup will remain the nation's largest bank.
While a larger bank may mean more in the way of convenience, one concern whenever two giants merge is that there will be less incentive to compete on price and customer service.
Consumer banking experts don't expect that to be a concern with the marriage of J.P. Morgan Chase and Bank One. "There's very little geographic overlap in these two institutions," said Greg McBride, a senior financial analyst for Bankrate.com, speaking of J.P. Morgan Chase and Bank One. "The only area where they both have significant market share is in Texas."
Similarly, the companies have traditionally targeted different types of customers, said Albright. "J.P. Morgan and Chase have focused on 'blue blood' banking customers, said Albright. "Bank One is much more diverse in its customer base."
Should I watch the fine print?
Although experts agree that this merger won't radically affect the terms of customers' checking and savings accounts, they do expect the banks to make some changes for the sake of being consistent.
"They may migrate in a direction, either up or down, depending on which bank becomes the lead on the consumer side," said Albright. For example, Bank One's account minimums could go up or J.P. Morgan Chase's could come down.
Jean Ann Fox, director of consumer protection for the Consumer Federation of America recommends that customers carefully read their bank statements and other bank correspondence in the next year of so.
"You want to watch all of the fine print that comes in the mail to make sure they don't change the features on your account," she said.
If you're not happy with the new terms, if there are any, you may want to see what kind of deals you'll get elsewhere. "Whenever large banks go through restructuring it's a good time to go out and shop for the best terms," added Fox.
Will I run into glitches at the ATM?
Whether customers initially run into technology glitches remains to be seen, of course.
When Fleet Financial Group bought Bank of Boston more than four years ago, the companies had some real issues bringing the banks' technology together, said Albright. "It took them a year to overcome that," he added.
Such technology glitches could, for example, make it difficult to use certain ATMs or complete transactions at certain branches. "I don't think Chase and Bank One will let that happen," said Albright.
Joe Sullivan, president of Market Insights, a consulting firm that specializes in optimizing banks' branches agrees. "I don't think you'll see the system problems you saw four or five years ago," he said.
Will I pay more for a mortgage?
Mortgage customers are now reaping the benefits of an extremely competitive marketplace. After record mortgage activity in 2003, lenders are now having to win over remaining home buyer and refinance customers with the most competitive rates, low closing costs and, recently, even such perks as frequent flier miles.
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A merger of giants is unlikely to dampen the competition for traditional mortgages, according to Keith Gumbinger, vice president of HSH Associates. It's worth noting, though, that community reinvestment groups are taking a close look at these mergers to make sure they don't make it harder for certain borrowers to obtain credit.
If and when J.P. Morgan Chase and Bank One consolidate their mortgage businesses, Gumbinger recommends that existing mortgage customers step up their record keeping for a while to make sure their monthly payment doesn't get lost in the shuffle.
What about my credit cards?
When Bank One, the second largest credit card issuer behind Citigroup, and J.P. Morgan Chase, now the fifth largest issuer, merge, the combined entity will be No .1 in terms of outstanding balances and No. 2 inter terms of cardholders, according to Robert McKinley, CEO of CardWeb.com.
"Fewer players do mean higher prices," he said, noting that even before this merger the top 10 issuers controlled three-quarters of the market. The price of plastic has been going up in recent years, thanks to higher fees, shorter grace periods and punitive interest rates.
With even less competition among credit card issuers, cardholders will need to be even more vigilant about the terms of their accounts.
"Consolidation makes it easier for these anti-consumer policies to take hold," added Ken McEldowney, executive director of Consumer Action.