How to Begin If You’ve Never Had A Bank Account
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How to Begin If You’ve Never Had A Bank Account
Written by Spencer Tierney Senior Writer | Certificates of Deposit and ethical banking, as well as banking deposit accounts Spencer Tierney is a consumer bank writer for NerdWallet. He has been writing about the personal financial sector since with a particular emphasis on certificates of deposit and other banking-related topics. The work he has written for him was covered on 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 10th, 2020
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Controlling your finances without having a bank account is possible. But it can pose challenges – and the COVID-19 pandemic has only increased the risk.
Your economic impact check may’ve been received weeks or even months after other ones with a check or a prepaid debit card due to the fact that you didn’t have the quicker delivery option of direct payment into a bank account. If you’ve visited the store lately you may be asked to pay with a debit or credit card or in exact change because of a nationwide shortage of cash and fears regarding the spread of germs.
A bank account will make life easier in these scenarios, and other things. To avoid any future problems Consider opening oneor revisiting when you’ve had a rejection previously. Here’s a step-by-step guide for getting started.
Review your financial needs
If you’re one of the 14 million adults with no banking account within the U.S., you might have a system that works for you. Perhaps that means using alternative products such as prepaid debit cards and checking cashing service. Financial counselor Brandy Baxter has worked with clients who have used check cashing services to meet practical reasons.
“They prefer to walk into the store, and leave with cash in hand” says Baxter who is a certified financial advisor and financial coach who manages the company Living Abundantly in the Dallas-Fort Worth area.
Check cashing establishments like Check ‘n’Go or ACE Cash Express may operate longer hours than banks and have easy approval processes for cash in a short time. However, they charge high fees, which could range from 1% to 6%, or more on top of the amount you pay for your check.
Bank accounts are able to meet your money needs beyond what pre-paid cards or check cashing services will. For instance, their fraud protections may limit the amount you pay if you’re victimized. Many accounts let you lock debit cards remotely in the event of theft.
Once you’ve established working with a bank, other options are available for you to consider: Credit cards as well as small or auto loans and cheaper alternative in payday loans may eventually be within reach.
Checking accounts “don’t just help you save costs; they’re the stepping stones to use various financial instruments,” says David Rothstein director of Cities for Financial Empowerment Fund, who manages BankOn the national platform which promotes financial inclusion.
Find a bank that fits you
If you are afraid of banks or had trouble obtaining an account previously, community banks and credit unions are generally more flexible than national banks and are usually mission-driven — for example, focusing on the financial health of their surrounding communities.
“We’re extremely accommodating when it comes to giving someone another opportunity,” says Pedro Murillo, area branch manager in the San Francisco Bay Area for Self-Help Federal Credit Union. “If an employee wants to apply for a loan and doesn’t have pay stubs, do they have anything else (can they) bring to us? An email from (their) company? We’re not willing to surrender.”
Like other credit unions, Self-Help will require a person to create a savings account in order to be a member. The minimum amount required to open an account is typically a few bucks. Then members can apply for additional products including a credit-building loan.
It is possible to search the internet for the term “CDFI” which is a reference to Community Development Financial Institutionwhich is a reference to . Some require that those who join to be located in the same state in which the credit union, or bank has branches.
What to learn about applying
To open an account, you’ll typically require to have your Social Security number, one or two forms of identification as well as money for your first deposit.
It is common to open two bank accounts at once one checking and the other a savings account. The checking account gives access to a debit card and bill payment system as well as other services. The savings account lets you put funds aside and, in the ideal case increase its value by making interest.
Banks generally screen potential applicants using ChexSystems which is a nationwide reporting agency that records the details of closed accounts at the request of a person. If you’ve lost access to your bank account previously it is possible that you will be refused by different banks until you have settled the ChexSystems account. This could include the payment of debts to banks or disputing the errors in the records.
When you’ve been cleared, you can think of what banks call it an approved BankOn checking account. Most of them do not charge overdraft charges, which kick in if you attempt to pay for something that would put your balance in negative.
Opening the correct bank account requires some effort. However, once you’re approved having a safe place 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 of any financial empowerment effort,” Rothstein says.
This article is written by NerdWallet and first printed in The Associated Press.
Author bio Spencer Tierney is an expert in the field of certificates of deposit at NerdWallet. The work of Spencer Tierney has been featured on USA Today and the Los Angeles Times.
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