How to Choose a Bank Account -The Start to Good Credit

Full Lesson:

When you're starting out, you want a bank account that doesn't cost you anything to have. No monthly fees and no hoops you have to jump through to qualify for no monthly fees.

Usually, you will end up at a credit union because all the credit unions really want is a deposit in your savings account which is basically the way you open your bank account. This can cost you as low as $25.00 like with Resource One Credit Union, and the $25.00 stays in the account for the life of the membership. After that initial deposit, there are no monthly fees for having the account, and you'll choose the account that doesn't have a minimum monthly balance requirement. I don't think you should pay just to have an account.

Start with a credit union and once you’ve managed that account well for about 6 months, like not overdrawing the account and getting hit with fees, then you can add a regular bank account to your portfolio. I recommend opening a Wells Fargo account that is $5/month if you’re 17-24 ($10/month if you’re older). They give you the opportunity to get even that monthly fee waived by using your Debit card at least 10 times a month. I usually just buy 10 $1 items like gum, chocolate bar, or even a jalapeno....No, they don’t care what you spend it on, just that you had 10 separate transactions. If you do that once a month, then you basically have a FREE regular bank Bank Account.

When you open your accounts, make sure your download their APP on your phone so you can check your account regularly. I tend to check mine every day, but you should get into the habit of checking it at least before you use your Debit card to buy something so you know the funds are available in your account.

When you make a deposit, don’t assume the funds are available right away! This is one of the biggest pitfalls people fail to check. Check your AVAILABLE Balance to see what’s in the account before spending and then look through the last few transactions to see if any places you spent money recently is missing from the list of transactions because some companies put a HOLD on the funds they’re going to charge you and then the HOLD releases the money back into your account and then they Come Back in a day or two to do the actual CHARGE (sometimes even a week, I call these transactions BOUNCE BACKs….I HATE BOUNCE BACKS). To see if a transaction was just put on Hold, look for it to say PENDING next to it. It’s important to remember what transactions you made to keep up with whether the transaction has finished POSTING. That means the transaction has actually finished and the store you spent the money with now has the money secured and you won’t have to worry about it popping up on you.

Check your account regularly (every day if you’re a regular spender). Look to make sure the stuff you’ve been buying is in the list of transactions. Pay extra attention to the transactions that are marked PENDING and check each day to see when it shows under the POSTED transactions. Also, this gives you the opportunity to check if there are any unexpected charges or unauthorized charges on your account. I don’t know how these thieves out here do it, but somehow they get access to people’s account info and charge as much as they can on it and unless you tell the bank you didn’t do it, the banks just going to keep handing your money out and the thieves are going to keep spending your money! Don’t be a victim! Check your account every day.

Recommendations:

Resource One Credit Union is my choice for credit unions and Chase Bank is my choice for a regular bank.

Benefits of different banks:

Wells Fargo

* Only costs $10/month for adults and $5/month if you’re 17-24 yrs old. And that monthly fee can be waived if you use your Debit card at least 10 times a month buying something.

Chase

* Deposit into ATM up to 10pm (Texas) to cover charges, checks, ACH debits (there is a limit but it's enough), don’t have to deal with a teller and their hours of operation.

* ATMs and Banks are everywhere (at least in Dallas)

Resource One Credit Union

* Open an account with $25 that goes into your Savings account

* No monthly fees

* Ability to transact business through thousands of credit unions that work in a network with Resource 1 Credit Union.

* They have 2 credit building programs:

Credit Builder Loan for $500/6 mths or $1000/12mths - make $90 monthly payments until the loan is paid off, the loan amount will be deposited in your account when it's paid off like a prepaid loan, reports to all 3 credit bureaus about a week after you open the account with a positive status before your first payment.

Secured Credit Card - amount based on how much you want to deposit in the savings account ($600 deposit - $500 Credit Line) and you can't touch it until they remove the hold, usually after 1 year, once they release the hold you can withdraw the deposit and the card becomes Unsecured which makes your credit report stronger, you can request an increase to your credit line periodically (about once a year), reports to all 3 credit bureaus in less than a month after you open the account with a positive status before your first payment (payments are based on your usage of the card), you should use it only when you can pay it back like a short term loan.