How to Start If You’ve Never had A Bank Account
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How to Get Started If You’ve Never Known About a Bank Account
by Spencer Tierney Senior Writer | Certificates of deposit and ethical banking, as well as banking deposits Spencer Tierney is a consumer banker at NerdWallet. He has covered finances for individuals since the year 2013 with a particular focus on deposit certificates and other topics related to banking. He has had his work featured by The Washington Post, USA Today, The Associated Press and the Los Angeles Times, among others. The location of his work is Berkeley, California.
Aug 11, 2020
Written by Carolyn Kimball Assigning Editor – Los Angeles Times, San Jose Mercury News Carolyn has been employed in newsrooms across the nation as a reporter and editor. Her passions are personal finances, science-fiction novels and ridiculous Broadway musicals.
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The management of your money without having a bank account is possible. But it can pose challenges – and the COVID-19 epidemic has only made it worse.
The economic impact payment may have been received weeks or even months after others’ did with a check or prepaid debit card because you couldn’t choose the faster payment option of direct payment into an account at a bank. If you’ve been to the store lately, you may be asked to pay with a credit or debit card, or with exact change due to an overall shortage of coins and concerns over germ transmission.
A bank account can be a boon in these situations, among other things. To avoid problems in the future Consider opening oneor try it again if you’ve been rejected in the past. Here’s a step-by-step guide for getting to the point of starting.
Review your financial needs
If you’re one of 14 million Americans who don’t have a banking account within the U.S., you might have a system that can work for you. Maybe that includes making use of alternative products like credit cards that are prepaid and Check cashing companies. Financial advisor Brandy Baxter has worked with clients who used check cashing services for practical reasons.
“They preferred to walk into their homes, then leave with cash,” says Baxter the accredited financial advisor and financial coach, who runs the company Living Abundantly in the Dallas-Fort Worth region.
Check cashing shops such as Check ‘n’ Go or ACE Cash Express may operate for extended hours than bank, and offer easy approval procedures to get cash quickly. However, they charge an expensive fee that can range between 1% and 6 percent or more on top of the amount you pay for your check.
Bank accounts are able to meet your the needs of money beyond what prepaid cards and check cashing services will. For example, their fraud security can restrict the amount you’re charged if you’re victimized. Many accounts let you lock debit cards remotely if they are stolen.
And once you’ve begun an association with a financial institution, you’ll have other possibilities are open: Credit cards as well as small or auto loans and more affordable options to payday loans may eventually be at hand.
Checking accounts “don’t just help you save expenses; they’re also the stepping stones to use different financial services,” says David Rothstein, principal at Cities for Financial Empowerment Fund who oversees BankOn, a national platform that encourages financial inclusion.
Choose a lender that fits your needs.
If you find banks intimidating or had trouble obtaining an account before you can open a bank account, community banks and credit unions tend to be more friendly than national banks. They are often mission-driven — for example, focusing on the financial health of their neighboring communities.
“We’re extremely accommodating when it comes to giving someone another chance,” says Pedro Murillo, area branch manager in the San Francisco Bay Area for Self-Help Federal Credit Union. “If an employee wants to request a loan but doesn’t have pay stubs, what else (can they) bring to us? A letter from (their) company? We don’t want to be left out.”
Similar to other credit unions, Self-Help will require a person to open a savings account to become a member; the minimum required to start an account is typically a few bucks. Then members can apply for other services, like a credit builder loan.
It is possible to search the internet for the word “CDFI” which stands for the community-based financial institution — to . Some require that those who join to be part of the same state in which the credit union, or bank has branches.
What to be aware of when applying
To create an account, you’ll generally require your Social Security number, one or two forms of identification and the money to make your first deposit.
It’s common to apply for two bank accounts at the same time that is a checking account and savings account. The checking account gives access to debit cards, bill payment system and other services, while the savings account allows you to set money aside , and in the best case increase its value by earning interest.
Banks typically screen applicants based on ChexSystems, a national reporting agency that maintains records of closed accounts against the will of an individual. If you’ve lost access to a bank account previously and you’re not sure if you’ll be denied by different banks until you pay off your ChexSystems record. This could include the payment of debts to the bank or disputing mistakes on the record.
When you’ve been cleared, you can think of what banks typically refer to as an approved BankOn checking account. Many of these don’t charge fees for overdrafts which are charged if you attempt to pay for something that could put your account in negative.
Finding and opening the right bank account involves some effort. However, once you’re approved finding a safe location for your money, and a better chances of getting low-cost loans can make it worthwhile.
“To have a checking account… can be the core for any empowerment financial initiative,” Rothstein says.
The article is written by NerdWallet and first released by The Associated Press.
Author bio Spencer Tierney is an expert in deposits in certificates at NerdWallet. The work of Spencer Tierney has been highlighted by USA Today and the Los Angeles Times.
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