The one Most Essential Thing You’ll want to Know about Payday Loans Near Me
How to Begin If You’ve Never Known About A Bank Account
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How to Get Started If You’ve Never Had a Bank Account
by Spencer Tierney Senior Writer | Certificates of Deposit ethics, ethical banking, bank deposits Spencer Tierney is a consumer bank writer for NerdWallet. He has been writing about finances for individuals since the year 2013, with a particular focus on deposits and certificates as well as other topics related to banking. His work has been covered on The Washington Post, USA Today, The Associated Press and the Los Angeles Times, among other publications. He is located in Berkeley, California.
Aug 11 Aug 11, 2020
Editor: Carolyn Kimball Assisting Editor Los Angeles Times, San Jose Mercury News Carolyn has worked in newsrooms around the across the country as a reporter as well as an 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 pandemic has added more.
Your economic impact payment might’ve come in a few weeks or months later than other ones and was in the form of a check or a prepaid debit card because you couldn’t choose the quicker delivery option of direct deposit into the bank account. And if you’ve gone to the market recently you might be required to pay with a credit or debit card, or with exact cash due to an overall shortage of cash and fears over germ transmission.
A bank account will make life easier in these situations, among other situations. To avoid future issues you should consider opening a bank accountor try it again if you’ve been rejected in the past. Here’s how to get to the point of starting.
Review your financial needs
If you’re one of the 14 million people with no banking account within the U.S., you might have a solution that works for you. Maybe that includes the use of alternatives such as prepaid debit cards and Check cashing companies. Financial advisor Brandy Baxter has worked with clients who utilized check cashing services to meet practical reasons.
“They prefer to go into their homes, then leave with cash in hand,” says Baxter who is a certified financial counselor and financial coach who manages the company Living Abundantly in the Dallas-Fort Worth area.
Check cashing establishments like Check ‘n’Go as well as ACE Cash Express may operate for longer hours than banks, and have easy approval processes for cash in a short time. But this comes with high fees, which can vary between 1% and 6 percent, or even more on top of the amount you pay for your check.
Bank accounts are able to meet your requirements for money that are not met by checks and prepaid cards services are able to. For example, their fraud protections may limit the amount you’ll be charged in the event of being targeted, and a lot of accounts allow you to lock your debit cards remotely if they are stolen.
And once you’ve begun an association with a bank, other possibilities are open such as credit cards, auto or small business loans and other less expensive options in payday loans may eventually be at hand.
Checking accounts “don’t only help you save costs; they’re the foundation for using other financial products,” says David Rothstein the principal of Cities for Financial Empowerment Fund, who manages BankOn an online platform in the United States which encourages financial inclusion.
Choose a lender that will work for you
If you find banks intimidating or had trouble obtaining an account previously you can open a bank account, community banks and credit unions tend to be more flexible than national banks and are usually mission-driven — for example, they are focused on the financial wellbeing of their communities.
“We’re extremely accommodating when it comes to giving someone another chance,” says Pedro Murillo director of the branch in the San Francisco Bay Area for Self-Help Federal Credit Union. “If an employee comes in to apply for an loan and does not have pay stubs to show, do they have anything else (can they) show us? Perhaps a letter sent by (their) boss? We’re not going to surrender.”
Like other credit unions, Self-Help will require a person to establish a savings account before they can be a member. The minimum amount required to open an account is typically only a few dollars. Members can then apply for additional products such as a credit building loan.
You can look up the term “CDFI” — that stands for Community Development Financial Institution – to . A lot of them require members to be located in the same state or region where the credit union or bank has branches.
What to know about applying
To open an account, you’ll typically need the Social Security number, one or two forms of identification and money for the first deposit.
It is common to open two bank accounts at the same time that is a checking account and an account for savings. The checking account grants access to debit cards and bill payment system as well as other services, while the savings account allows you to set money aside , and in the best case increase its value by making interest.
Banks typically screen applicants based on ChexSystems which is a nationwide reporting agency that records the details of accounts closed against the will of an individual. If you’ve lost access to a bank account in the past it is possible that you will be refused by other banks until you have settled your ChexSystems file. This could mean the payment of debts to the bank or disputing mistakes on the record.
Once you’re cleared, consider what banks call it an approved BankOn checking account. A lot of them don’t charge fees for overdrafts, which kick in if you attempt to make a payment that would put your balance in the negative.
The process of opening a bank account takes some effort. However, once you’re approved finding a safe location for your money as well as a greater likelihood of getting affordable loans can make it worthwhile.
“To have a checking account… will be the core of any financial empowerment program,” Rothstein says.
The article originated from NerdWallet and was first printed through The Associated Press.
About the author: Spencer Tierney is an expert in certificates of deposit at NerdWallet. The work of Spencer Tierney has been highlighted in USA Today and the Los Angeles Times.
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