Tag: Banking

 

How to Make Mobile Check Deposits

By Rebecca Lake

Are you familiar with mobile check deposits?

This means you can deposit checks without going to the bank. And, being able to deposit paper checks, such as a stimulus check, without going to the bank can make things super convenient.

If you’ve never used mobile check deposit before, it’s not as difficult as you might think. Take a look at 6 tips that can help you make the most of this feature – saving you valuable time.

How to deposit checks without going to the bank

1. Check your bank’s mobile check deposit guidelines

The first thing you need to do is make sure the organization you’re banking with is set up for mobile check deposits. The easiest way to do that is to check your mobile banking app.

When you log into mobile banking, head to the menu and look for the mobile check deposit option. If you see it listed, then your app should allow you to deposit checks online. 

Before you try to use mobile check deposit, however, make sure your account is enabled to do so. While the feature may be available in mobile banking, you may still have to register first or sign up. 

 

2. Review mobile check deposit limits

If you know that you’re able to deposit a check through mobile banking, the next step is to determine whether there are any limits on deposits. 

For example, some financial institutions impose limits on the number of checks you can deposit per day or per week. There may also be daily, weekly or monthly limits on the total dollar amount you can add to your bank account using mobile check deposit.

So, make sure you can deposit your check without going over those limits. For example, say you’re married with two kids and you received a federal stimulus check for $3,400. If your bank’s mobile check deposit limit is $5,000 per day, you should be able to deposit the entire check online. 

You can usually find out about limits if you read your bank account’s terms and conditions. You can also check your online banking website and look for a section on frequently asked questions. Sometimes this is a good place to start. 

What if your check is outside mobile check deposit limits? In this case, you’ll need to find a work-around for depositing it into your bank account. With online bank accounts, for instance, you may have to deposit the money to a checking account at a brick-and-mortar bank, and then move it into your other account via an ACH transfer.  

 

3. Get your check ready for deposit

Depositing a check online isn’t exactly the same as depositing it at a branch or ATM. But you still have to sign the back of the check for the deposit to be valid. You also should make sure all the information on the front of the check is correct. 

Depending on your bank account, you may also have to write something extra on the back to denote that it’s a mobile deposit. For example, you may have to add “for mobile deposit” or “for remote deposit capture” below your signature. 

Also, make sure the check is legible. Your mobile device needs to be able to “read” the check via the camera when you’re ready to deposit it. 

 

4. Deposit your check via mobile banking

Now you’re ready to deposit a check online! 

The process can be different depending on your particular bank account. But generally, here’s what you need to do:

  • Log into your mobile banking app
  • Find the mobile check deposit option in the menu
  • Select the account you want to deposit the check into (i.e. checking or savings)
  • Enter the check amount
  • Snap a photo of the check – front and back. It’s important to make sure you get a clear image of both sides of the check. Otherwise, you may have trouble completing a mobile check deposit. If the images come out fuzzy or blurry, clean off your camera lens. And, make sure you take photos in an area with good lighting so your camera can pick up details on your check.
  • Once your device records the images of your check, review the deposit details. Make sure that you’ve signed the check, selected the right account, and entered the correct amount.

If everything looks good, you can confirm the deposit and send it to your bank account. 

 

5. Wait for the check to clear

If you deposit a stimulus check – or any check – online, you may want to use the money right away. But, you’ll need to wait for the check to clear in your bank account first. 

You may now wonder how long it takes for mobile check deposits to clear. Well, this depends on your bank account, the amount of check, and the type of check involved. Again, check your bank account terms and conditions or read through the FAQs. This might offer up some clarity on how long your mobile check deposit will take to be fully credited to your account. 

In the meantime, don’t throw the check away. Why? Because there may be a hiccup with your mobile check deposit. If you don’t see the deposit in your account within a week, you may need to call your financial institution to find out what’s happening. You may also need to try making the deposit again. 

Once your mobile check deposit clears your bank account, you can then write ‘void’ on the check and file it away. 

Are you using mobile check deposit yet?

Signing up for direct deposit can save you time, but mobile check deposit comes in super handy if you receive a paper check, like a tax refund or stimulus check. 

So, if you aren’t taking advantage of mobile check deposit yet, consider signing up. You’ll soon learn just how convenient it is! 

 

How to Avoid Monthly Maintenance Fees in 2020

By Melanie Lockert

What if you asked a friend to watch over your precious jewels and she said, “Yeah, no problem.” But later on, she hit you up for a monthly fee for babysitting your jewelry. How would you feel, especially as she didn’t tell you upfront about this so-called fee? Probably a little peeved, right?

Unfortunately, this kind of scenario happens all the time in the form of monthly maintenance fees at numerous banks. It’s true. Many financial institutions charge a monthly maintenance fee if you don’t meet certain requirements. As a consumer, it’s important for you to be aware that your bank may be charging you fees. Along these lines, you should know how to avoid paying them.

What is a monthly maintenance fee?

A monthly maintenance fee is a fee charged by a financial institution to a customer if certain requirements aren’t met. For example, some banks may charge a monthly maintenance fee if your account balance is under a certain threshold.

These fees are charged by banks to help “maintain” your account, kind of like a service fee. Banks thrive off of managing your money and if you carry a high balance in your account, you may get hit with a fee.

How do I avoid monthly maintenance fees?

Paying a monthly maintenance fee can be annoying. What’s worse: you may not even realize you’re getting charged. I remember a friend of mine telling me she was scrolling through her Bank of America account and noticed she was being charged a fee.

Just how much was she paying? The Bank of America monthly maintenance fee was $12 per month. In order to avoid the fee, she had to have a certain balance or sign up for direct deposit. The issue? She didn’t have a steady job at the time and her income was irregular.

My advice to her was to break-up with the big bank and open a bank account that had a free checking account and no fees.

Monthly Maintenance Fees Charged by The Biggest Banks in The U.S.

Not all banks charge a monthly maintenance fee. However, many large financial institutions do charge monthly fees and these charges vary from bank to bank.

Here’s a closer look at the monthly maintenance fees at big banks and how you can avoid them.

Bank of America monthly maintenance fee

  • Fee: $12 per month
  • How to avoid Bank of America’s monthly maintenance fee: Maintain a minimum balance of $1,500 each day or make one direct deposit equal or greater than $250 per month.

Chase monthly maintenance fee

  • Fee: $12 per month
  • How to avoid Chase’s monthly maintenance fee: Maintain a minimum balance of $1,500 each day, have $500 or more in your account through direct deposit per month, or have $5,000 or more in various qualified accounts.

US Bank monthly maintenance fee

  • Fee: $6.95 per month with electronic statements or $8.95 per month with paper statements.
  • How to avoid US Bank’s monthly maintenance fee: Maintain a minimum balance of $1,500 or make $1,000 or more total in direct deposits every month.

TD Bank monthly maintenance fee

  • Fee: $15 per month
  • How to avoid TD Bank’s monthly maintenance fee: Maintain a minimum daily balance of $100.

Citibank monthly maintenance fee

  • Fee: $12 per month
  • How to avoid Citibank’s monthly maintenance fee: Have $1,500 in qualified accounts or make one eligible direct deposit and bill payment each month.

Wells Fargo monthly maintenance fee

  • Fee: $10 per month
  • How to avoid Wells Fargo monthly maintenance fee: Complete 10 qualified debit card transactions, make direct deposits of $500 or more to your account, or maintain a $1,500 balance every day.

PNC monthly maintenance fee

  • Fee: $7 per month
  • How to avoid PNC’s monthly maintenance fee: Make direct deposits of $500 or more or maintain a $500 minimum balance each month.

Say goodbye to hidden fees 👋 

As you can see, monthly maintenance fees vary by bank accounts and each financial institution has different requirements so that their customers can avoid them. While you may be able to meet the requirements to avoid bank fees, there is a better way to never worry about paying maintenance fees again.

You can avoid maintenance fees altogether and enjoy getting paid up to 2 days early by banking through Chime.

 

Chime Debit Card vs. Prepaid Debit Cards

By Robyn Parets

By now you may have heard of Chime, a bank account with no hidden fees that helps you manage your money on the go and save automatically. Pretty awesome, right?

But did you know that Chime members also get a Chime Visa Debit Card, designed to help you save more money?

You may be wondering how a debit card can help you save money. Plus, you might be thinking you don’t need another debit card as you already have a prepaid card or two in your wallet. You may also be wondering if there are any reloadable prepaid debit cards with no fees. But, once you learn more about its benefit, we think you’ll be trading in those prepaid cards for a brand new Chime debit card.  

Is Chime a Prepaid Card?

No, Chime is not a prepaid card. When you open an account online through Chime, you get a Spending Account, a Visa debit card, and an optional Savings Account. Chime’s debit card is linked to your bank account and a prepaid card is not.

So, if you use your Chime debit card, your purchases are deducted from your Spending Account. A prepaid card, on the other hand, is not connected to any bank account and it’s up to you to load money onto it in advance. Typically, you can use your prepaid card until your loaded up funds run dry. 

5 Key Differences Between the Chime Debit Card & Prepaid Cards

To make it easier for you to understand other differences between Chime debit cards and prepaid cards, we took a closer look at four of the most popular prepaid cards: Netspend, RushCard, Brink’s and Bluebird by American Express. We then compared the Chime debit card to these prepaid cards in terms of five key categories: fees, mobile apps, ATM access and fees, early direct deposit and security. Here’s what we found.

1. Fees

Chime: There are no hidden fees associated with Chime’s debit card. This is important as the average U.S. household pays more than $329 in bank fees every year. Chime, however, is on a mission to change this with no overdraft fees, no monthly maintenance fees, no monthly service fees, no minimum balance fees, and no foreign transaction fees when you use your debit card. In short, a Chime Spending Account is virtually free to use.  

Prepaid cards: All of the four prepaid cards that we analyzed charge fees for certain services, including, ATM withdrawals and transferring funds. 

2. Mobile App

Chime: The Chime app has 150,000+ 5-star reviews.  Offering the best mobile banking experience, Chime’s award-winning mobile app helps you track your spending and savings, pay friends and relatives, transfer money, send and deposit checks, and pay bills. You can accomplish all of this from any smartphone.

Prepaid cards: These cards all offer mobile apps that allow you to manage many financial tasks, like depositing checks, paying bills and viewing your transaction history. But, none of them offer extensive features like Automatic Savings or Pay Friends. Why? Prepaid cards are not tied to full-service bank accounts, which ultimately limits your overall banking experience.

3. ATM Fees

Chime: How does easy access to money sound? With a Chime account, you can use your debit card to get cash at more than 38,000 fee-free ATMs.

Prepaid cards: With all four prepaid cards on our list, you can withdraw money from ATMs. However, there are fees involved.

  • Netspend – $2.50 per domestic withdrawal
  • RushCard – $2.50 per out of network withdrawal
  • Brink’s – $2.50 per domestic withdrawal
  • Bluebird – no fees for MoneyPass withdrawals and $2.50 per non MoneyPass withdrawal

4. Early Direct Deposit

Chime: Chime members can get paid up to two days early with direct deposit, as well as enable the option to automatically save a percentage of every paycheck. That’s right. No more waiting for your money or worrying about lost paper checks. Chime gets you paid faster and helps you save money.

Prepaid cards:  All four of the prepaid cards also offer an early direct deposit option, allowing you to get your funds two days early. But unlike Chime, these cards are not tied into your savings account, leaving your personal savings up to you.

5. Security

Chime: Security is a priority at Chime, and this includes keeping your information and money safe. Deposits of up to $250,000 are insured through Chime’s partner, The Bancorp Bank, Member FDIC. Chime also uses 128-bit AES encryption to make sure your cash is parked safely. Here are some of the other security features you’ll get with a Chime account:

  • You can instantly block your Chime debit card. This means that if your debit card is missing or stolen, you can block all transactions right from the app.
  • Chime sends you real-time, instant transaction alerts. This way you can stay informed about your money at all times.
  • You can shop worry-free at millions (yes, millions) of merchants. That’s because the Chime debit card is protected by the Visa Zero Liability Policy, which ensures that you won’t be responsible for unauthorized charges.
  • Your privacy is important, which is why Chime requires two-factor authentication.

Prepaid cards: These cards do offer some security features. For example, Brink’s allows you to add your picture to your card. RushCard, in turn, offers One Touch Access, allowing you to use your fingerprint to access your account. And, because Bluebird is part of the Amex family, you’ll get purchase and fraud protection.

But at the end of the day, none of these four prepaid cards are bank accounts and therefore do not offer the full scope of security features found at Chime.

Ready to make the switch? 

There are many differences between prepaid cards and Chime’s debit card. As you can see, Chime is not a prepaid card – far from it. Plus, the Chime debit card offers a lot more perks and benefits than prepaid cards.

If you’re looking for a singular card that wins across all categories, Chime takes home the trophy. What are you waiting for? Sign up for a Chime account today and start saving money now. 


 

How Long Does it Take to Get a Tax Refund?

By Rachel Slifka

Waiting for your tax refund to hit your bank account is no fun. In fact, you may be wondering whether there’s a faster way to get your money.

The answer is: yes. There is a faster way to get your tax refund and there are actual steps you can take to speed up the whole process. To help you get your money in the bank, take a look at how the tax refund process works. From here, you can take the necessary steps to receive your tax refund faster.

How long do tax refunds usually take?

The answer to this question is: It depends.

If you e-filed your return, you can expect to receive a faster refund through direct deposit. The IRS states that it can pay out most tax refunds within 21 calendar days after submission. Yet, nine out of 10 people who e-file receive their tax refunds in three weeks or less.

If you prefer to file an old-school paper tax return, you can expect a longer processing period. The IRS states it takes about six to eight weeks to process a refund once it receives your tax return. So, if you want to get your refund faster, e-file with direct deposit. You may want to consider filing online through websites like TurboTax, TaxAct, and E-file.

Once you’ve e-filed your taxes, you will need to set up how you will receive your payment. And, if you want to make sure you get your refund as fast as possible, set up direct deposit (eight out of 10 tax refunds are received via direct deposit).

If you’re a Chime member, all you have to do is choose “direct deposit” on your tax return software. You then can input your Chime Spending Account number and corresponding routing number.

From there, you just have to wait for your refund to show up in your bank account. Once your refund hits your account, Chime will send you a text alert and email. This way you will know that the money is there the second you receive it.

3 Tips for getting your refund check or deposit faster in 2020

While there isn’t any way to guarantee exactly when your tax refund will arrive, there are a couple of ways to get it even faster.

  1. File your completed tax return right away if possible (the deadline is April 15, 2020.) If you are missing W-2 forms (or 1099 forms if you are an independent contractor), then the process can take longer. So, at the beginning of January in any given tax year, be on the lookout for any forms you expect to receive. If you do not receive them by January 31, reach out to your employer or client and ask them to send these forms to you.
  2. Be prepared. Make sure you have the rest of your vital tax documents available and prepared in the event you need them
  3. Ask for help. Consider filing your taxes with a tax professional. While going to a professional won’t guarantee a faster tax refund, an expert is versed in the ins and outs of filing taxes and can advise you on making the best decisions for your particular situation.

 

What to do if you still haven’t received your refund

If you still haven’t received your tax refund after three weeks’ time, there may be a few reasons why.

First, your tax return may have included errors, such as misspelled names, incorrect social security numbers, unsigned forms and more. To avoid errors, make sure to carefully review your tax return before you click submit. Another reason for a potential hold-up: Perhaps you were a victim of identity fraud. In this situation, the IRS may hold onto your return until it can work with you to rectify the situation.

If you still feel like things are moving slowly, here are three additional steps you can take to speed up your tax refund process:

  1. Use the IRS’ “Where’s My Refund?” online tool. It’s a quick and easy way to check the status of your tax refund. All you have to do is login to the IRS’ secure website. To access the system, you will need to input your tax filing status, your social security number and the amount you declared on your tax refund.
  2. Call the IRS to check on the status of your refund. To call the IRS, you can dial the hotline at 800-829-1964. Again, you will need to be prepared and provide your social security number, tax filing status and the amount of the refund you are expecting.
  3. Use the free IRS app, called IRS2Go. Similar to the online platform, you’ll need to enter the required information into the mobile tool. It’s never been easier to check your tax status while on the go.

Be smart with your refund

Before you receive your tax refund, be sure to create a plan for spending or saving your newfound cash.

While spending it on a vacation or new clothes sounds appealing, it may be wiser to save your tax refund for future use. To get the most bang for your buck, consider opening a savings account through Chime. This way you can continue to grow your money faster! 

 


 

What Are Online Prepaid Debit Cards? A Look At The Key Differences Between Prepaid Card vs. Debit Card vs. Credit Card

By Chonce Maddox

What are the key differences between a debit card, a credit card, and a prepaid card? With so many financial terms floating around it can be difficult to figure it all out. Some people use personal finance terms interchangeably like ‘checking account’ and ‘bank account’ or ‘interest rate’ and ‘APR’. In these instances, this is understandable.

Yet, when it comes to prepaid, debit and credit cards, it’s important to note that these cards are not the same thing. While they all may show a network logo like Visa, MasterCard, American Express, or Discover, these three types of cards are actually quite different.

With that said, these cards do have one thing in common: if you’re not using cash, you’re likely using one of them to make your purchases.

Read on to learn more about the differences between prepaid cards, bank issued debit cards and credit cards.

Debit Card

A debit card is one of the most used bank cards around. Debit cards have numerous features that make them convenient. They also have downsides like:

  • Limited security
  • ATM use and bank fees
  • Potential overdraft fees

Scroll down for the specifics. We picked out everything you need to know to decide if a debit card a good choice.

Prepaid Card

Prepaid cards are another fairly common money card option. These are often used as gifts and rewards, but people with limited access to standard banking options as well as those with limited budgets often use them in lieu of a checking account. Just like credit cards and debit cards, prepaid cards have their own pros and cons. With a prepaid card, you load money onto the card and then use it to make purchases or withdraw money from an ATM. You can put money onto your card with any of these options:

  • Arrange for a paycheck to be directly deposited onto the prepaid card.
  • Add funds at retailers or financial institutions like a Walmart or currency exchange location
  • Use a reload card which works just like a gift card (it contains a code that becomes linked to the amount of money you paid the cashier. You can then load the card over the phone using your code)
  • Transfer funds from an existing bank account

Note: Be mindful that some loading methods may come with a small fee.

There are different types of prepaid cards to choose from: free prepaid debit cards, reloadable prepaid cards with no fees, and no limit prepaid debit cards, to name a few. Make sure you understand the terms and limits of this type of card before you use one.

Credit Card

A credit card is separate from your bank account and allows you to make purchases by borrowing from a credit limit, which is based on your credit score and other factors. Credit cards offer increased security, robust features, longer term payment options but have downsides too. You’ll want to read our details below to decide if a credit card is an option. It’s also important to note that you’ll receive a certain limit when approved for a card. You can then spend up to this amount regularly so long as you make your minimum payments on time.

For example, if you get a credit card with a $1,000 limit, this means you can spend up to $1,000 on the card. While you can carry your remaining balance over to the next month, you will be charged interest on the balance until you pay it off. This is why it’s recommended to purchase only what you can afford to pay for within a short period of time – preferably during that same billing period.

A good rule of thumb is to only borrow up to 30% of your credit limit and try to pay the bill off in full each month. So, instead of spending your entire $1,000 credit, you may want to spend $300 or less and pay the bill off in full at the end of the monthly billing cycle. According to Experian, this is called credit card utilization and it’s a common factor when determining your credit score.

Credit cards can help you build your credit and demonstrate that you are a trustworthy borrower. In fact, credit card companies report your borrowing and payment history to the three major credit bureaus and this helps shape your credit score.

One final note about credit cards: when you decide to apply for one, make sure you understand all the fees and terms.

Prepaid Card vs. Debit Card vs. Credit Card

As you can see, there are quite a few key differences between the three cards above, so let’s discuss them in more detail.

Benefits of the prepaid card

A prepaid card is different from a debit card based on the fact that you don’t need a bank account to have a prepaid card. And, when you get a prepaid card you won’t be subject to any credit checks or inquiries into your banking history because you are using loading your cash onto the card. Another perk: you may be able to deposit your paycheck right onto your prepaid card.

Are prepaid cards safe to use? 

While prepaid cards can look and feel like debit cards, they aren’t as safe as debit cards. Why? Since debit cards are connected to your checking account, you can easily monitor your account and spending online for free. Your money will also generally be protected if your debit card gets lost, stolen, or wrongfully charged.

However, the Consumer Financial Protection Bureau (CFPU) has put new rules in place to make prepaid cards safer for consumers. These new rules are set to go into effect on April 1, 2019.

Credit cards vs prepaid cards 

Credit cards are different from both prepaid and debit cards due to the fact that when you use a credit card you are borrowing money while hopefully building a solid credit history. Better yet, many credit cards offer rewards in the form of points or cash back that can be redeemed for statement credits, travel, or merchandise. Some people like to use credit cards to purchase groceries, gas, and other everyday needs in order to rack up reward points.

As long as you’re not overspending and can pay your bill off in full each month, there’s nothing wrong with using this strategy. However, if you struggle with controlling your spending, you may want to steer clear of using credit cards for your daily purchases.

Instead of credit cards, consumers often choose debit cards for everyday spending. Why? Debit is safer than cash, you can monitor your activity online with mobile banking, and you can choose a bank that doesn’t have fees.

Debit cards vs prepaid cards

At first glance, prepaid cards might just like debit cards. And while they do have their similarities, don’t be fooled: prepaid cards and debit cards are not the same.

Debit cards are connected to your bank account, and prepaid cards only allow you to spend what you’ve loaded onto them.

Click here to learn the main differences between a debit card and a prepaid card

What is the best card for you?

If you’re not going to be using cash 100% of the time, odds are you’ll need one of these three cards.

Some people start with a prepaid card, but most choose a debit card that’s connected to a checking account for easy access to their money. Still, others prefer a credit card, especially if it offers perks and rewards.

You can choose to use more than one card! Just find the best solution for you.

We’ll leave you with this thought: you may want to consider using two or all three of these cards for different types of spending. The bottom line: the best option is the card that works best for your spending and lifestyle habits.

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Banks That Offer Early Direct Deposit

By Laura Klein

Early direct deposit proves to be very beneficial and convenient for a lot of employees. Who doesn’t want their money to be available as soon as their employer releases their pay? Many banks support this system since people are now choosing to have their pay directly deposited to their accounts, rather than waiting for their checks to come in. This provides a healthy competition among banks, and it is up to them to show how they compare with one another. There are even some banks that offer early direct deposit so that account holders can access their funds almost as soon as they are deposited.

Different banking options for different people

Because of the direct deposit option, consumers are wise to open bank accounts. Without an account, people would not be able to get their pay early. Opening an account is the first requirement before enjoying this efficient payroll system. Banks, in return, take this as an opportunity to provide direct deposit features.

While early direct deposit is very appealing, there are numerous banks to choose from that provide this offer. Examples of these banks that have a direct deposit feature are Citibank, Bank of America, Wells Fargo, and Chase. These are well-known names and have competitive offers but what they don’t have in common, though, are their own monthly banking fees such as maintenance fees, overdraft fees, minimum balance fees, and foreign transaction fees. These are the things that a consumer needs to consider before opening an account. That being said, it is best for consumers to determine the type of bank account that is suitable for them.

Online Banking Offers Many Perks

If consumers don’t like the idea of too many fees and don’t have the time to go to an actual bank, they could try opening an online banking account such as Chime. With Chime, consumers:

  1. Don’t have to worry about monthly fees and hidden charges
  2. Can enjoy early direct deposit and;
  3. Save time by not having to visit a bank location to deposit their paychecks.

 Early Direct Deposit

Banks are becoming competitive because of the need to respond to consumers’ needs. Early direct deposit provides consumers an easy way to get their pay early without waiting for paychecks to come in the mail. While a lot of banks offer an early direct deposit feature, it all boils down to their banking fees. Surely, some people do have the capacity to pay for these fees, but for those who can’t, there are alternatives to traditional banks like Chime.

Chime offers banking with no hidden fees 

No monthly fees, no personal appearance to a bank. Chime is an online banking option that is very convenient and accessible for consumers. Not to mention that people can save money when they have a Chime account. Without the monthly fees, the money they get from their early direct deposit is in their hands, which means more money can be saved for other purposes.

Think Before you Choose an Account

With all of the bank competition, a person should first think carefully about a bank’s services before getting an account. The consumer needs to think about taking care of their finances in the long run, and part of this is determining the best option for keeping their money safe and secure.

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Is There A Totally Free Checking Account?

By Kim Ogletree

Nowadays a lot of people, especially millennials, prefer to use online banking over traditional banking to manage their finances. Online banking makes it easy for anyone to handle the most common banking transactions using a laptop or internet-ready mobile device.



What is an online checking account?

Having an online checking account enables a person to access their money anytime, anywhere using a computer or a smartphone as long as these are connected to the internet. It is also called a transactional account since it can be used to pay your bills and make most of your financial transactions. Moreover, when compared to online savings accounts that only allow limited transactions per month, checking accounts don’t have limits regarding the number of transactions you can complete every month.  And this means that you can use your online checking account for your everyday spending, bills, and other online debit transactions.

Benefits of an Online Checking Account

  • It can easily manage your finances: Imagine having the ability to deposit checks using only your phone, view your current balance instantly, and pay your bills quickly. There isn’t a good reason not to try opening an online checking account nowadays. Moreover, online accounts never close, meaning you can access your account anytime where you can check your balance, transfer funds, and pay bills.
  • It brings peace of mind: An online checking account also provides some automated tools and features. If you are having a problem remembering to make regular payments, you can use the online bill pay feature where it makes sure all of your bills get paid on time. You can also use the automatic transfer tool, so you don’t have to stress yourself about a payment slipping your mind or showing up late. Moreover, the automatic transfer also lets you transfer from your online checking account to an online savings account if you are planning to save for your future.
  • It can save you time: In traditional banking, you have to wait in line when making a simple withdrawal or deposit transaction. But with an online checking account, you can do whatever you want with your money instantly without having to wait in line for hours.
  • It comes with better rewards: Online transactions usually come with rewards. For example, you may be able to get a cashback or a special discount when you use your online checking account to make purchases online. Furthermore, having an online checking account with a rewards feature is an excellent alternative to credit cards that offers reward points. After all, using a credit card is risky since the possibility of overspending is high.

Is opening an online checking account free?

It can be. There are several companies that offer free online checking accounts; meaning, they do not require an opening deposit and don’t charge monthly maintenance fees.  For example, if you open a Chime online checking account, they won’t charge you anything. Having an online checking account comes with no monthly fee and no minimum balance requirement. There are also no hidden fees which may pop up with other accounts on the market.

How to open a free online checking account

When opening an online checking account, there’s no need to look for a physical bank to apply. All you need is to sign up and create an account on their website. Make sure to provide all the essential pieces of information they require of you such as your first and last legal name, your social security number, and email address. Those are needed to verify your identity to help them to minimize the risk of money laundering and fraud. Once you are confirmed eligible, you have to download their mobile banking app so you can access all of their offered services. To transfer your hard-earned money to this online checking account, you can either make direct deposits or make a money transfer using your other bank accounts.

Final Word

Opening an online checking account is a great option for managing your daily expenses, making bill payments, and engaging in other online debit transactions when compared to traditional banks. Having an online checking account nowadays can truly make your everyday life easier.

 

 

Prepaid vs. Debit Cards: Here’s Which One You Should Choose

By Susan Shain

In 2003, Americans put less than $1 billion on reloadable prepaid cards. In 2012, they put $65 billion on them.  

By 2020, the Consumer Financial Protection Bureau (CFPB) expects that number to grow even further: to $116 billion. 

But what, exactly, are prepaid cards? How do they differ from debit cards? And which one is better for you? Keep reading for all the answers to your prepaid card questions. 

What is a prepaid card?

At first glance, prepaid cards seem just like debit cards. And they do have their similarities.

As Korrena Bailie, senior editor for Wirecutter Money, explains: They both provide a way “to make cashless payments without getting a line of credit.” Because of that, you should also note that neither prepaid nor traditional debit cards will help your credit scores; for that, you’ll need a credit card or credit builder loan. 

The purchasing process is almost identical, too. Once you’ve loaded money onto a prepaid card, you can swipe it anywhere its payment network is accepted — whether that’s at a restaurant, movie theatre, or online store. You can also use prepaid cards to withdraw cash from an ATM. 

But don’t be fooled: Prepaid cards and debit cards are not the same thing. 

Whereas debit cards are connected to your checking account, prepaid cards only let you spend the amount you’ve loaded onto them. 

In fact, that’s what many people find appealing: A 2014 survey from Pew Charitable Trusts discovered that most Americans use prepaid cards to “gain control over their finances.” 

Others might use prepaid cards because they don’t qualify for a traditional bank account, have concerns about identity theft and privacy, or want an easy way to teach their children about budgeting. Something to note: If you think you can’t get a checking account, second chance banking may change your mind.

How prepaid cards work

Curious about how to get a prepaid card and how these cards work? 

You can buy them online or at a variety of retailers, including most supermarkets, big box stores, and drugstores.

You decide how much cash you want to load on the card, and voila, you’ve got the convenience of paying with plastic. There aren’t any credit checks, and if you’re purchasing the card from a store, you won’t even need to share any personal information. 

If you try to buy something that costs more than the balance remaining on your card, your purchase will be declined — which is why some people use prepaid cards as a way to stay under budget and avoid overdrafting. (Some prepaid card suppliers do allow you to sign up for “overdraft protection,” but we don’t think the high fees are worth it.) 

When you’re ready to reload your card with more cash, you have a variety of options. Here are some popular ones: 

  • Set up direct deposit with your employer (cards come with routing and account numbers)
  • Transfer money from a bank or PayPal account
  • Deposit money at an affiliated bank or participating retailer
  • Virtually deposit a check through your card’s mobile app
  • Physically deposit a check at an ATM

Another thing to know about these cards: Some employers offer prepaid “payroll cards” in lieu of paychecks, and the government also offers benefits on prepaid cards. Yet, it’s important to note that if an employer offers you a prepaid card, you have the right to ask for other methods of payment instead, like direct deposit.

Are prepaid cards safe? 

Until recently, prepaid cards had very few protections. If your card was lost or stolen, it was like cash, and you were out of luck.  

But in April 2019, a new CFPB prepaid cards rule went into effect. Among other things, this made fees more transparent and offered recourse in case of loss or theft. To qualify for these protections, you must first register your card on the issuer’s website. Registering will also make you eligible for FDIC insurance, which protects you if your bank fails. Note: If a card doesn’t offer FDIC insurance, it must say so on the packaging.

Once your prepaid card is registered, your liability will be limited to the following amounts, depending on when you report the card’s loss: 

  • Within two days: up to $50 
  • Within 60 days: up to $500
  • More than 60 days: no limit 

If the investigation will take longer than 10 business days, the CFPB also states that card providers are generally required “to credit the disputed amount to your account while investigating the problem.” 

Two reasons a debit card is better than a prepaid card

Although the new CFPB rule makes prepaid debit cards much more secure, we’d still say that traditional debit cards rule the roost. 

David Bakke of Money Crashers agrees. He says that “true debit cards are almost universally a better choice over prepaid debit cards.” 

Translation? Instead of wondering “what is the best prepaid debit card?” you might want to consider a traditional debit card instead. 

Here are two major reasons why. 

1. Lower fees

The majority of prepaid debit cards come with a barrage of fees for everything from withdrawing cash to reloading the card to using the card. Some even charge for calling customer service.

With the popular Green Dot Prepaid Visa, for example, you might pay: 

  • $1.95 to purchase the card
  • $7.95 per month
  • $5.95 to reload the card
  • $3 to use an ATM

So, in one month, if you bought the card, reloaded it twice, and withdrew cash three times, it would cost you more than $30! 

Most debit cards, on the other hand, will cost you less than this. The average checking account fee, for instance, is less than $6 per month — and debit cards don’t require “reloading” or charge in-network ATM fees. Plus, if you bank with Chime, you’ll pay no fees.  

2. Wider usage

Want to book a hotel? Or rent a car? With a prepaid debit card, this might be a problem. 

Loren Sweigart of Supporting Strategies discovered this the hard way. 

I went to a U-Haul rental that accepts debit cards,” she says, “so I tried to use my prepaid debit but they wouldn’t accept it.” 

That’s not unusual. Vendors who need to put a hold on your card may be reticent to accept one that’s prepaid — especially if it doesn’t have a name or expiration date. 

An alternative to prepaid cards 

If you’re ready to leave the fees and hassle of prepaid debit cards behind, look no further than the Chime debit card. It’s a fantastic – and FREE – prepaid card alternative. 

We won’t even check your credit when you apply. All we ask is that you’re 18 or older, and a citizen or permanent resident of the United States. 

The Chime debit card offers a slew of sweet perks and features, including: 

  • No unnecessary fees, ever
  • Free overdrafts with SpotMe
  • The option to freeze your card or order a replacement from within the app
  • More ATMs than the top three biggest banks combined (over 38,000!)
  • The ability to round up your change into a separate account
  • EMV chip technology for convenience and security
  • Connection to the Visa network, the most widely accepted worldwide
  • FDIC insured up to $250,000

What are you waiting for? Get started with the Chime debit card today.

 

How to Finally Stop Overdrafting (And Avoid Fees!)

By Susan Shain

Raise your hand if this sounds familiar: You head to dinner with friends and charge $30 to your debit card

But little do you know that a bunch of bills were auto-drafted from your checking account this morning — and you only have $25 in your bank account

Yikes. You’ve just overdrafted

Most banks charge an average fee of $35 for this tiny mistake, costing Americans $34 billion in 2017. (Here’s more on how overdraft fees work.)

If you’re wondering how to avoid overdraft fees, keep reading. We’ll reveal 5 tips for nixing this costly habit — followed by how to join a bank that doesn’t charge any overdraft fees, ever. 

1. Monitor your balance

When it comes to debit card purchases (the most frequent cause of overdrafts), the median overdraft-causing transaction amount is just $24, according to the Consumer Financial Protection Bureau

Since it’s pretty easy to spend $24, one of the best ways to avoid overdrafting is to get intimately acquainted with your balance. Download your bank’s mobile app, and set a reminder to check it every Friday morning — that way, you’ll know exactly what you can spend over the weekend and following week. 

Alternatively, you can connect your bank account to an AI-powered budgeting app like Charlie, or you can try a no-frills, straight-to-the-point app like Daily Budget.

If you’d prefer to go super low tech, ask your bank for a checkbook register. 

“Each time you authorize an item or debit from the account, record it in the ledger and maintain a running balance,” suggests Adam Marlowe, the principal market development officer for Georgia’s Own Credit Union

Call it old school, but forcing yourself to write out each expenditure is a good way to stick to your budget and (hopefully) avoid another overdraft.

 2. Cancel overdraft protection

While removing the protection to prevent overdrafting may sound counterintuitive, overdraft protection can actually be detrimental.

Despite the fact more than two-thirds of overdrafters would rather have their purchases declined than pay a fee, many consumers don’t know they can opt out of this so-called benefit, according to Pew. If, up until a few seconds ago, you were one of them, call your bank ASAP — or just switch to a bank that doesn’t charge fees.

Here’s why you should do this. When you sign up for this “protection,” your bank will “let” you overdraw your account — and then smack you with an average fee of $12.30. (One exception: If your bank draws from a linked savings account to cover your purchase, the charge may be lower or even free.

How kind, right? Although $12 is less than a $35 overdraft fee, we think no fees are best of all. 

“Legally, banks must allow you to opt out of overdraft protection and simply get denied for the purchase when you don’t have enough money,” Michael Outar, founder of Savebly, explains. 

“That will prevent you from paying any ridiculous fees.”

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3. Create account alerts

Your phone notifies you whenever someone follows you on Instagram, and whenever your favorite makeup brand goes on sale… why not when your bank account dips to risky levels? 

To keep herself from overdrafting, Marissa Sanders of Simple Money Mom signed up to get an automatic notification if her balance dips to $100 or less.  

Setting up a $100 alert will give you time to institute a spending freeze, as well as check for recurring charges that will be debited before your next paycheck.

“If you know in advance that you are having certain bills drafted, contact the creditor and ask them to delay payment for a few days,” suggests Roslyn Lash, an accredited financial counselor. 

While your utility company, for example, may charge a late fee, Lash says it’ll usually be “considerably less” than what your bank would charge for overdrafting. 

And, here’s a tip: if you often find yourself squeezed between paychecks, consider getting paid early with Chime.

4. Avoid putting holds on your debit card

Got a vacation coming up? You might want to pack your credit card rather than your debit card. 

As David Bakke of Money Crashers explains: “Try to not use your debit card when renting a car, staying at a hotel, or purchasing gas. Oftentimes, with these types of purchases, there’s a hold placed on your account for more than the actual purchase amount.” 

Lightbulb moment, right? When you check into a hotel, it puts a “hold” — often to the tune of several hundred dollars — on your card. Worse, with debit cards, the hold sometimes doesn’t appear as debited from your account (and could thus make you think you have more to spend than you do). 

The best solution, of course, is to pay with a credit card. But if you only have a debit card, enter your PIN. That will process your transaction as debit rather than credit, forcing the money to come straight out of your account. Just make sure you have enough to comfortably cover the entire hold, as it could take several days after check-out before it is returned.   

5. Get overdraft fees waived

Fine, fine, so this isn’t a preventative measure — but if you hit a rough patch and accidentally overdraw your account, it’s important to know how to get overdraft fees waived. 

The good news: It’s easier than you might think. 

“When overdrafts do happen, we encourage our members to contact us if they have fallen on bad times and need a little help,” says Marlowe of Georgia’s Own Credit Union. 

“Financial institutions will often refund the fees as long as it is not a normal occurrence. After all, everyone makes mistakes.” 

As soon as you spot an overdraft fee charged to your account, call your bank. If it’s your first time in a while (or if you mention switching banks), the agent may be sympathetic to your cause. 

Are there banks without overdraft fees? 

While it’s always a good idea to take better control of your finances, wouldn’t it be nice to find a bank that had your back when you slipped up? 

As Lash, the financial counselor notes, “It’s difficult to find a bank that doesn’t have overdraft fees, but if you can, by all means do so.” 

Luckily, if you’re reading this, the hard part is over; you’ve already found that bank. At Chime, we’re proud to have fee-free overdrafts. (And fee-free everything else, too!)

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