Tag: Guides

 

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. 


 

Recommended Budget Category Percentages

By Chonce Maddox

We all know how beneficial a budget can be. 

For starters: A budget outlines your spending plan so you know exactly how much money goes toward each expense. Budgets are also extremely helpful when trying to decide how much you have available to save and how much money you can put toward paying off your debt. 

At the same time, there are many different ways to budget. One of the most common budgeting strategies I recommend is to set up budget category percentages. For example, a common rule of thumb is that housing costs shouldn’t exceed 30% of your income. What about the rest of your budget categories? Luckily, they can be broken down by percentages as well. 

Read on to learn more about creating percentage categories for your budget. 

Start with the Basics

If you’re new to budgeting, using the 50/30/20 rule is a great starting point. 

With the 50/30/20 budget, you allocate 50% of your income toward living expenses and necessities, 30% toward wants, and 20% toward debt and savings. 

Here’s how this would look. Say you bring home $3,000 each month. Under the 50/30/20 budgeting method, you’d put $1,500 toward living expenses and necessities, $900 to wants and variable expenses, and $600 toward debt and savings. 

While this method is super easy to use, it may not fit in with your particular goals. For example, you may want more wiggle room for your savings account

Alternatives to 50/30/20 budget

If you want to venture beyond the 50/30/20 budgeting method, you can get more specific and add additional percentages while breaking up your spending into more categories. 

Think about your goals and lifestyle. What do you value spending money on? How much are your core necessities? Do you have debt? What are your savings goals?

Start tracking your spending to see what your current budget categories are. It can be eye-opening to see the percentage of your income that you spend on things like dining out, transportation, and even bills and insurance. 

So, think about setting your own budget percentages based on your preferred spending patterns and goals. With that in mind, here are our recommended budget category percentages that can help you get ahead. 

Basic Recommended Budget Category Percentages

 

Basic Recommended Budget Category Percentages

 

Here’s how this budget would break down if you bring home $3,000 each month:

🏠Housing (mortgage and rent costs) = $750

💡Utilities = $150

🍔Food = $300

🚌Transportation = $150

☂️Insurance (includes medical, auto, renter’s etc.) = $450

💅Personal (+ household expenses) = $150

🍿Entertainment/Recreation =$300

🙏Charitable Giving = $300

💰Savings/Debt = $450

Keep in mind that these are pretty standard budget percentages if you want to have enough money to afford your needs and wants. As you can see from the example above, you still can’t afford to splurge on housing costs, but you’ll have plenty of money for groceries, dining out, giving, savings, and debt payments. 

Once you have your ideal budget in place, you can start allocating money to different expenses when you get paid

Aggressive Recommended Budget Category Percentages

While the basic recommended budget category percentages may work well, you may want to take it up a notch if you have some aggressive savings goals and are willing to live frugally. 

If you are looking to pay off debt quickly or save to meet an important goal, here are some budget category percentages you can try.

 

Aggressive Recommended Budget Category Percentages

 

Here’s how this budget would break down if you bring home $3,000 each month:

🏠Housing = $600

For this amount, you’d likely have a roommate or rent a smaller apartment to keep housing costs low. If you own a home, you may also rent out a few rooms to offset your mortgage costs. 

💡Utilities = $150

If you have roommates, you can split the cost of utilities to save money. Perhaps you can use Chime’s Pay Friends to send fee-free mobile payments if you’re splitting bills. You can also limit your use of electricity during the day by turning off lights as well as reducing heating and cooling costs by using a programmable thermostat.

🍔Food =  $210

Although the amount is quite low, this may be enough for one or two people. If you cook most meals at home, take advantage of sales, and buy ingredients and whole foods instead of packaged food, you can make this budget work. 

🚌 Transportation = $90

While this amount is also low, perhaps you work close to home and can keep your fuel costs down. Or, maybe you can use alternative transportation like walking or cycling. 

☂️ Insurance = $300

For this amount, you likely shop around for the best insurance rates and drive an older car that doesn’t cost much to insure. You also receive benefits from your job which helps keep this category low.

💅 Personal (+ household expenses) = $150

This amount is just enough to buy basic needs and supplies for the house as well as some affordable personal care once or twice a month. 

🍿 Entertainment/Recreation = $150

Your dollars can be stretched with free local activities and experiences along with using coupons and deal sites to dine out. 

🙏Charitable Giving = $150-$300

Although you’re determined to save and/or pay off more debt, this budget still allows for you give back to others in need. 

💰Savings/Debt = $1,200

Accelerated debt payments and savings contributions will allow you to hit your financial goals faster, even if you don’t have a large income. 

The Power of Budgeting

It’s quite possible to save more than $14,000 annually on a $40,000 salary with the aggressive recommended budget percentages above. 

Yet, regardless of whether you prefer an aggressive, basic or other type of budget, breaking up your spending categories by percentages is powerful. It shows you exactly where your money is going and how much of your income is used for certain expenses.  

Feel free to use this new perspective and play around with your own budget category percentages. This will help you determine where you spend and how much you can save. Are you ready to give it a try?

 

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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The Ultimate Guide to the 50/30/20 Budget

By Paul Sisolak

[UPDATED 2020]

In a dream world, you’d be able to spend as much money as you wanted, and your bills would be magically taken care of. Then you wake up and realize that unless you have a limitless source of income, going without a budget is the fast track to going broke. Without a budget it’s only a matter of time before you can’t afford your rent, keep the lights on, or pay off your debt.


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Now it’s time to create a budget that works for you. And, although everyone’s financial situation is different, a percentage-based budget might be the perfect solution.

What is a percentage-based budget?

Unlike a traditional budget – where you manage your money based on your previous spending history and make changes as you go along – a percentage based budget takes into account the present and future. Huh? That’s right. A traditional budget only looks to the past without taking into account how much you should be spending and saving from your current income.

A percentage-based budget, on the other hand, divides up your monthly earnings into percentages that go toward your expenses, savings, debt, disposable income, and other categories of your choosing. This encompasses your earnings at the moment and helps you predict how to allocate your funds so that you can effectively pay your bills and save money.

One of the most common percentage-based budgets is the 50/30/20 rule. And, you guessed it: this budget divides your after-tax income into three categories. Take a look.

50 30 20 Rule:

Budget 50% towards your needs

What are your needs? Typically this includes food, rent or mortgage, a car loan or lease payment, student loans, insurance of any kind (auto, health, life, etc.), and monthly costs like utilities or electricity. You might not have all of these expenses, and you might have others to add to the list. But, in general, half of your take-home pay in a percentage-based budget should go towards the necessary bills that pay for your food, shelter, and transportation.

So, if your monthly net pay is $5,000 and you follow 50/30/20 rule, you’d set aside 50% — $2,500 — for these necessities. This might encompass $950 for rent/mortgage, $300 for your car payment and insurance, $400 for groceries, $250 for student loans, $75 for utilities, $100 for cable/cell phone, and $150 to insurance. The remaining $275? Treat it as wiggle room; you may need it for other needs, like clothing or out-of-pocket fees for doctor’s visits. With this plan, your budget covers the exact total.

Budget 30% towards your wants

In a percentage-based budget, 30% of your income is spent towards your wants or personal expenses.

Following the $5,000 take-home pay example, you can allow yourself $1,500 on “flex spending,” or anything from dining out, clothes shopping, Starbucks, your cable or cell phone plan, travel or leisure expenses, gift spending or a gym membership. In the grand scheme of things, these purchases may be important to you, but they are entirely optional costs.

Budget 20% towards your savings

Using this type of budget, the remaining 20% of your income goes towards an often overlooked part of budgeting: saving money.

This could be anything from a simple deposit account to a rainy day fund. It could also mean contributing to an investment account or a retirement plan, like a 401(k) or IRA. Once again using a hypothetical monthly income of $5,000, this would mean saving $1,000 of your after-tax money towards the savings goals of your choice.

 

50 30 20 rule

When is a percentage-based budget right for you?

As long as you have leftover income after covering your needs, a percentage-based budget may work well for you.

Take a closer look at both the flexibility and discipline offered in a percentage-based plan:

  • Flexibility. You could be on a fixed income and set fixed percentages or set up a more flexible plan based on fluctuating income. A percentage-based budget works for both. You can tweak and modify your spending/saving categories according to how your earnings and expenses change over time. This way, your budget takes into account your financial situation at any given time.
  • Discipline. If you’ve been prone to overspending or struggled with debt, percentages keep your budget balanced and make sure you live within your means. It’s an equitable form of budgeting and allows you to meet all your wants and needs without making too many concessions.

Granted, the 50/30/20 plan isn’t the only percentage-based budget. All percentage-oriented budgets are entirely customizable.

Perhaps a 60/20/20 or 40/20/40 would work best for you. You can even break it down more specifically. For example, you can choose to allocate 30% to housing, 20% to transportation, 15% for food, 10% to insurance, 10% toward health expenses, 5% for savings, 5% for personal expenses, and so on.

When is a percentage-based budget wrong for you?

A percentage-based budget isn’t great for everyone. For example, if you are in-between jobs or if things are really tight, you may not have the financial breathing room for this type of budget. In this case, your goal might be increasing your monthly earnings to make sure you can cover your needs. Wants and savings can come later.

Making the most out of a percentage-based budget

A budget is only as good as you make it. With that in mind, remember some of these tips to maximize your success with a percentage-based budget:

  • Prioritize your percentages. Calculate a percentage-based budget for needs, wants, and savings – in that order. Then, ensure that your bills are being paid and money is being socked away. Remember that there’s bound to be some budget crossover. For example, if the 20% category in your 50/30/20 budget is for a specific purpose, like paying down debt, use the money for its intended purpose once you reach your goal.  (And if you need some motivation to save money, signing up with Chime gives you the opportunity to sock away your hard-earned cash into an automatic savings account each time you spend on your debit card.)
  • Make adjustments where needed. Just because you have a percentage-based budget doesn’t mean you should set it and forget it. All budgets are a case of trial and error, and in the first few months of your budget, it’s possible that you might be overextending one portion of your budget, or not devoting enough income to another part of your initial plan. Tweak the numbers depending on your current situation and lifestyle. If you just got a raise, for instance, you might be able to increase your percentages to pay more towards debt. But, if your rent or insurance rates have risen, it could mean cutting back on the amount you set aside for personal expenses. Look at your current finances to set a plan for the long term. Remember that your percentages shouldn’t be decided upon arbitrarily. Calculate them based on your existing finances.
  • Reduce your costs. When you find ways to pay less money on expenses, it frees up more money to use where it counts most. If you’d like to cap your housing costs at 35% of your budget, but you’re earmarking 70% toward your rent, then it’s time to start looking to relocate to more affordable digs. You can also look at other creative ways to free up funds like shopping on sale or buying generic to cut grocery costs, negotiating lower car insurance rates, or refinancing your loans. Every saving effort counts. Once you’ve found ways to save, it’s now important not to go out and spend this newfound cash. Use it instead as bonus money towards the savings percentage of your budget. This way you’ll save money and meet all your financial goals.
 

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.

 

 

How to close a bank account at the biggest banks in America

By Melanie Lockert

Here’s the deal: not all banks are created equal and there’s not a lot of clear information on how to close a bank account. Like many of us in banking relationships with big banks, you probably had a good start and all was going well. Then things started to get complicated and expensive. There were overdraft fees, monthly maintenance fees, minimum balances fees, etc. And, perhaps the worst part: you felt as if you were giving up more than you were getting.

Don’t worry, there’s still time and there are plenty of other no-fee bank accounts in the sea that fit your needs. If you feel like you’re ready to part ways with your bank an open new account with a better banking option, take a look at our primer on how to close a bank account at the top 5 big banks.

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How to close a Wells Fargo Account

Wells Fargo has seen a flurry of press coverage in recent years — and not the good kind. As it turned out, Wells Fargo employees created millions of fraudulent accounts in order to try and inflate their sales numbers, according to the New York Times and other news outlets. Not only did Wells Fargo create fake accounts, but employees received bonuses for meeting phony sales goals, too.

If you’re a Wells Fargo customer, it’s understandable if you no longer trust your bank. So if you want to close your Wells Fargo account, here’s three ways to do it:

    1. Calling 1-800-869-3557. Submit a request to Wells Fargo to cancel the account. You can do this either online, in-person, or over the phone.
    2. If you have a remaining balance, you’ll want to transfer your funds to another financial institution before closing your account. You can also fill out the Account Closure or Partial Withdrawal Request form if you want your balance to be sent to you via check. Make sure you switch the accounts on any bills you have on auto-pay, so your payments can continue to go through.
    3. Contact Wells Fargo by visiting a Wells Fargo branch to close the account in-person or sign into your Wells Fargo account and click on ‘Contact Us’. From there, go to the ‘More’ menu to submit a formal request to close your account.

To make sure Wells Fargo canceled your account, get a written confirmation for your records.

How to close a Chase account

Wondering how to close a Chase bank account? There are a couple of ways to close the account. It should also be noted that your cancellation cannot be processed online. Here’s how to close a bank account with Chase:

    1. Transfer your remaining funds to your new bank account. Remember to leave a small sum of money in your Chase Bank account to cover any unexpected expenses.
    2. Fill out the Account Closing Form. You’ll need to provide information, including the name of the account, your address and the address where you want Chase to send you the remaining balance in the account.
    3. Bring the form to a nearby Chase branch and request to close your account. You can also call Chase at 1-800-935-9935 to get assistance with closing your Chase account.

To cancel the account completely, make sure you get written confirmation for your records.

How to close a Bank of America account

If you’re a Bank of America customer and want to avoid a monthly fee, you need to keep a minimum balance. If you don’t meet that requirement, you could end up paying $12 to $25 in monthly maintenance fees. Customers that are unable to consistently meet the minimum balance pay between $144 to $300 per year! Ready to ditch fees and minimum balances? Here’s how to close a bank account with Bank of America:

    1. Transfer any remaining balances to another financial institution. Then, update your payment preferences on bills that use auto-pay so you can continue to make payments automatically.
    2. Go to a local Bank of America branch to close your Bank of America account.
    3. Call Bank of America at 800.432.1000 to close the account.
    4. Send a written request to close the account to:  Bank of America, FL1-300-01-29, PO Box 25118, Tampa, FL 33622-5118. Sign the letter and include instructions on how to receive your remaining balance, if eligible.

You might be wondering, “Can I close my bank account online?” As with Chase Bank, you cannot close a Bank of America account online, so your safest bet is to use one of the methods above. 

To confirm closing a bank account, get a written confirmation for your records.

How to close a PNC Bank account

Closing bank accounts can be difficult as there are not always clear-cut instructions on how to do so. If you’re wondering how to close a PNC bank account, it can be tough to find available information online.

However, according to some PNC customers, you can close a PNC account online through their web chat system. It’s likely you can also call the bank or go into a PNC branch to learn how to close your PNC account. Here’s how to close a bank account with PNC:

    1. Transfer any remaining balances to your new bank account. Update your payment preferences on bills that use auto-pay so you can continue to make payments.
    2. Close your PNC account online through their chat system or go in-person to your local branch. You can also call their customer service line at 1-888-PNC-BANK for assistance on how to close the account.

When closing a bank account with PNC, be sure to get a written confirmation for your records.

How to close a Citibank account

If you’re interested in closing a bank account with Citibank, there are a few ways to do this. Here’s how to close a bank account with Citibank:

    1. Transfer any remaining balances to your new bank account Update your payment preferences on bills that use auto-pay so you can continue to make payments.
    2. Visit your local Citibank branch and tell them you want to close the account.
    3. Call 1-888-CITIBANK (1-888-248-4226) to talk to a representative and let them know you’re interested in closing a bank account.
    4. Send a message through your Citibank online portal with a request to close the account.

If you want to close Citibank accounts, be sure to get a written confirmation for your records.

4 ways to make switching banks easier

1. Find a new bank

First, you’ll want to find a new bank. If you’re fed-up with bank fees, want a better mobile banking experience, and need a bank that actually helps you save money, Chime is a great new bank account option. Opening a Chime bank account only takes a few minutes and can be done from your phone or desktop. Get started today!

2. Set all of your bills to autopay

Track down and set all of your bills to autopay to ensure there is no lapse in payments. A good way to make sure you’re covered for all of your auto-payments is to pull up your last month’s statement and find the monthly recurring transactions. Look for: power, garbage, transit passes, subscriptions, etc. For subscription services, Chime offers a Bill Switch option which allows you to instantly switch bills for services like Amazon, Netflix, Spotify, and more once you enroll.

3. Keep a small amount of money in your old bank account for a month

Make it official and stop using the bank account you are closing, but keep it open for a month and leave a small cushion in the account (i.e. $100-$200). This will cover any unexpected transactions or bank fees that may hit your account while you’re making the transition.

4. Gather your bank information

Have your bank account numbers and an I.D. at the ready to answer any security questions. If your bank requires you to cancel in person, be sure to fill out the required documentation ahead of time so that you can make the process as painless as possible.

 

The Ultimate Back-to-School Budgeting Guide

By Chonce Maddox

Back to school season is right around the corner. That happened fast! 

While kids are probably not ready to give up on summer fun, it’s important that parents start planning for back-to-school expenses and consider creating a budget. Indeed, as it gets closer to crunch time, every paycheck counts. 

According to a recent survey, families plan to spend around $685 per child during the back-to-school season. In order to help you figure out how to manage these costs, we came up with the ultimate back-to-school budgeting guide.

Get started by prioritizing your expenses and planning out your spending. Take a look:

Narrow Down Your Back-to-School List

If back-to-school shopping is overwhelming, you’re not alone. You probably have tons of school supplies and more on your list and if you’re not organized, you can easily overspend or forget something. 

So, before you head to the store or start shopping online, narrow down which expenses are your priorities. Some of the most popular categories are:

  • School supplies
  • Clothes
  • Shoes
  • Backpacks and lunch boxes
  • Books
  • Technology

For starters, set a recommended spending amount for each category and notate this in your budget. This way you have something to shoot for. For example, if you only want to spend $120 on clothes, include this in your budget to help you plan your spending strategy more effectively.

Factor in Any Hidden Costs

Don’t forget about hidden back-to-school costs, like after-school activity fees, band equipment fees, setting up a school lunch account and the likes. Identify these costs early so they don’t bust your budget. 

Take Inventory Around the House

Before you start doing any shopping whatsoever, take a look around your house to see what you already have. I do this each year and it saves me a ton of money

When my son comes home on his last day of school, I unload his backpack, remove all of his leftover school supplies, and store them away. I often find unused pencils, packaged notebook paper, markers, crayons, and folders that are in pretty good shape. 

When August rolls around, I take the stash of school supplies I saved and use that to determine what items I actually need to buy. 

You can do this with clothes as well. Go through your child’s closet before shopping and start to piece together existing outfits that still fit and are in good condition. 

Determine Your Savings Timeline

Once you know how much you have to spend and what you need to buy, start developing a timeline for your shopping so you can save up in advance.

For example, if you find that you’ll need to spend $400 on back-to school items this year, break out that amount over your next few paychecks and start saving. You can make it even easier by setting up automatic transfers every time you get paid. 

Also, see if you can spread out any purchases. For example, school starts a week later for us this year so I plan to use the extra time to spread out my spending. I’ll buy school supplies first, and then take my time purchasing clothes and anything else.  

Follow the Deals

When shopping, make sure you take advantage of deals and coupons to save money. Stores like Target and Walmart, and office supply outlets tend to have competitive back-to-school offers. 

One year, we took advantage of Office Depot’s penny sale and scored several items for a single penny. 

You can also shop in spurts as some stores may give you a coupon to use when you come back. In this case, it makes sense to do one round of back-to-school shopping and then return a few days later with the coupon. 

Thanks to the Internet, you can also save money shopping from your living room. Sites like Rakuten are great for earning cash back on your purchases without having to use a credit card. You can also use sites like Flipp and Hollar to scan for deals from your phone. 

Shop Used or Find Free Items

Another great way to help you stick to your back- to-school budget is to shop for used items. Clothes can be expensive and sometimes I wait around for the Labor Day sales, but I also like to mix in some used clothing.

Thrift stores like Goodwill and local resale shops allow you to get more bang for your buck and you can often find great name brand items. 

If you need specific supplies, you can also ask around to see if family or friends can help. For example, an older child may need a special calculator for math. Before you run out and buy one, see if anyone you know has that calculator and will let you borrow it for the year. Perhaps they’ll even give it to you if they no longer need it! 

Avoid Overspending 

Try to use some of these savings strategies to help you stick to your budget and avoid overspending. Odds are, you have other expenses to consider during the fall and winter months so remember not to drain your finances with back-to-school shopping.  

A good tip is to set realistic expectations with your kids and plan to mix in used items. With the proper planning and budgeting strategy, you can still get everything you need for the school year! 

 

How to Pay Off Debt in Collection: A Guide to Saying Goodbye to Credit Collectors

By Melanie Lockert

You’re in debt and you have no idea how you’re going to pay it off. 

The due date passes by. You want to pretend your debt doesn’t exist. As the days and months go on, you’re delinquent on your loans and they end up in collections. Your credit is shot. The menacing calls begin and all you want is for them to stop. 

Yet, while this is indeed a difficult situation, it’s one you can take control of and fix with the right actions. In this guide, we offer up ways you can pay off debt in collections. Take a look.

What is a Collection Agency and Why are Debt Collectors Calling?

First, let’s discuss the cast of characters involved with debt collections. 

There is the collection agency or credit collection service, which is a third-party company hired by a lender to collect an outstanding balance from a borrower. The collection agency then hires debt collectors, who are the actual people doing the dirty work and calling borrowers to get the money back

Credit card debt, student loans, medical bills, utility bills and more can all go to collections. Business debt isn’t eligible for debt collections. 

While debt collectors can take certain actions like call you at work, there are restrictions so that the hounding doesn’t become an abusive practice. For example, debt collectors can only call you during certain hours, in many cases between 8am-9pm.

How to Find out Which Debt Collection Agency You Owe Money to 

If you want to get out of debt collections, you need to pay money to the credit collection services agency. 

But how do you know exactly who to pay and who the debt collection agency is? In some cases it might be clear but if not, here are ways to find out which debt collection agency you owe money to: 

  • Contact the Original Creditor 

If you know what bill is in collections, contact the original creditor for more information about your collections account. You can then ask which debt collection agency they are using and get the contact information. Then, contact the debt collection agency and ask how to proceed to get your payment in good standing. 

  • Check Your Credit Report 

If you know you’re in debt collections but are unsure of which loans are not in good standing, you’ll want to get your credit report. Your credit report is a document that contains your full credit history, including outstanding loans that may be in debt collections. 

Many debt collection agencies report to the three major credit bureaus — Experian, TransUnion and Equifax. You can access all three of your credit reports once a year at AnnualCreditReport.com

Make sure you check all three as some debt collection agencies only report to one credit bureau, not all of them. 

  • Answer the Phone When Bill Collectors Call You

In some cases, your debt collection fees won’t appear on your credit report. And sometimes, the debt can be passed onto other debt collection agencies, leaving you wondering who to contact.

In this case, you will likely have to wait until the debt collector calls you to get more information. It’s not fun and no one wants to deal with debt collectors on the phone. But if you’re unsure of who the debt collection agency is, answer the phone, get the information and ask how to get your loan in good standing. You’ll also want to get a debt verification letter and check your records to make sure you’re not overpaying as debt collectors can make mistakes too.

Three Ways to Pay Off Debt Collectors 

If you want to get out of collections and repay your debt, there are a number of routes you can take. Some of them may require negotiation and whatever you do, get everything in writing. Here are three ways to pay off debt collectors:

1. Negotiate a Settlement With Your Debt Collector

In some cases, you may be able to negotiate a settlement with your debt collector. A settlement is typically less than the amount owed and is used in exchange for deleting the account from your credit report. 

You’ll need to get a letter in writing about the settlement terms before making your first payment. Make sure you understand your rights and responsibilities, and that you know the terms of the settlement. 

2. Pay Off the Debt In Full 

If you have a small bill that is outstanding and in collections, you can choose to pay off the debt in full. Under this option, the good news is that your debt will be paid off. The bad news is that the collection account will remain on your credit report. 

3. Create a Debt Repayment Plan

If you can’t negotiate a settlement or pay the debt in full, you can talk to the debt collection agency about a debt repayment plan. 

In this case, it’s important to make all of your payments on time and in full to get your loan in good standing. 

What Happens if You Don’t Pay a Collections Agency?

If you have debt collectors hounding you, you might want to bury your head in the sand. Unfortunately, if you aren’t paying off collections, your problems will only get worse. Here’s why:

  • Your Credit Score Will Take a Hit 

The debt collection agencies report to the major credit bureaus. So, if you ignore them, your credit score may go down. This can make it more difficult to get approved for loans and may result in higher interest rates if you do get approved. 

In some cases, you may be able to negotiate the mark off your credit report. If not, the negative entry will remain on your credit report for seven years. And remember: This can have a sweeping impact on every area of your financial life. 

  • You May Have Late Fees, Making the Debt Harder to Pay Off

If your debt is in collections, it’s not just the outstanding balance you have to worry about. There could be additional late fees tacked onto your balance. All of the extra fees can add to the total cost of your loan, making it even harder to pay back. 

Deal with Your Debt

Debt collectors have one job — to collect your debt. In order to do that, they will call you many times until they reach you. This can be stressful and annoying.

So, answer the phone and face the issue head on. Talk to your debt collector about your options, whether that’s a settlement, payment plan or paying it off in full. Make sure you get everything in writing.

It’s not fun and can be tough to deal with, but getting out of collections will help you breathe easier and free up stress. Once you do this, you’ll be able to focus on other financial goals like saving money and investing. 

 

Credit 101: The Basics You Need to Know

By Erica Gellerman

 

 

 

 

Women and Money: Financial Wellness Advice From Women

By Melanie Lockert

In March, we celebrated Women’s History Month and now that it’s April, we’re bringing awareness to Financial Literacy Month.

We wanted to celebrate both occasions by gathering the best money tips from a cross-section of women — from successful female entrepreneurs to women working in male-dominated industries

Here are 6 women who offered up their best tips on women and money, women-owned businesses and more. Take a look.

1. Sandi Knight, Senior Vice President and Chief Human Resources Officer for HealthMarkets

Sandi Knight knows how important protecting yourself is. As the Senior Vice President and Chief Human Resources Officer for HealthMarkets, an insurance marketplace, she works to help consumers get the health coverage they need.

“I think it is important that women start young in their careers understanding finances, the need for insurance and what creates wealth – and on the opposite end, debt. Insurance, especially life insurance, is critical if they have young children and even more so if they are single parents. If something were to happen to them, how would their children be taken care of?” says Knight.

Knowing the type of coverage you need in terms of life insurance, disability insurance and more can protect you from the unthinkable. While many of us don’t want to think anything will happen to us, it’s better to be safe than sorry.

2. Mira Violet, CEO of digital agency Amethyst Design

Mira Violet is the CEO of digital agency Amethyst Design. The agency helps companies with SEO, web design and more. As a woman owned business, she is all about getting paid what you’re worth.

Many women are underpaid with the gender pay gap and it’s key to boost your pay, says Violet.

“Make sure you’re being paid fairly. Ask male co-workers in the same position and experience level what they’re being paid. Look at sites like GlassDoor to compare your income to others in your job position. The culture of not talking about our finances only serves those who seek to underpay and undervalue us,” she says.

So, it’s key to talk to your colleagues about pay. Look up salaries in your area and compare what you’re earning. At the right time, negotiate your pay so that you get paid what you deserve.

3. Deborah Sweeney, CEO at MyCorporation.com

Deborah Sweeney is the CEO of MyCorporation.com, a company that helps other businesses form an LLC or corporation. Her top women and money tip for female owned businesses is to know just how you will fund your business. Funding is the bloodline of any business and you want to be clear how you will get your money.

“Starting a business is not easy, especially if you don’t have the funds,” says Sweeney.

According to Sweeney, here are seven ways women can access funding:

1.   Angel investors

2.   Pitch your business idea to venture capitalists

3.   Apply for grants with the Small Business Administration

4.   Crowdfunding

5.   Donations from friends and family

6.   Open several credit cards and increase the limits on each one. (Remember, you’ll have to pay everything back, plus interest)

7.   Ask your bank for a business loan. (Most business loan applications get rejected. You’ll need to have a high credit score to increase your chances of acceptance. Also, you’ll need a detailed business loan plan. You need to give your loan provider an exact plan on how you will spend the money. Without this information, you will likely be rejected.)

4. Gemma Roberts, Chartered Accountant for a large non-profit organization

Gemma Roberts is an accountant and also founder of TheWorkLifeBlend.com, where she helps others build flexible lifestyles and businesses. The crux of getting your money right starts with seeing where your money goes, says Roberts.

“Carry out a full audit of your spending habits. Do you have any savings? If you had an unexpected expense, could you cover it? Do you have any loans or an overdraft?”

“Once you have a good understanding of your current situation, you can set yourself specific financial goals. It might be to pay off your debt, retire early or save for a house. This can seem like a lot of work, but it’s never been easier to improve your financial wellbeing. There are a variety of apps available that help you to budget, save money and set financial goals. Many of them can access your bank account and assess your spending habits.”

In order to improve your financial well-being, knowing where your money is actually going is the first step. Then you can adjust and set goals that work for you. You can even use a bank like Chime that helps you automatically save.

5. Danielle Kunkle Roberts, Co-Founder, Boomer Benefits

Danielle Kunkle Roberts is the co-founder of Boomer Benefits, an insurance agency that helps people with Medicare. She knows first-hand what it’s like to make mistakes in business. One of her top tips for female entrepreneurs is to be wise about partnering up with others.

“Don’t partner with someone you don’t know very well just because you are nervous about starting a business. I made this mistake in 2005 and it took me two years to buy out my other two partners,” saus Kunkle Roberts.

“It’s vital that you know the work ethic of anyone that you get involved with and that all parties have the same money philosophy,” she explains.

“In my scenario, I wanted to invest all the profits back into the business but my other partners wanted to take it all home every month. This left me doing the bulk of the work to generate sales while having only one-third of the profits – my own – to invest back in. Believe in yourself or partner with someone whose work ethic you are very sure about.”

It can be enticing to want to work with others but don’t use it as a crutch. Going into business with someone is like a marriage and you want to make sure you’re on the same page when it comes to your business goals and financial habits.

6. Daniella Flores, senior software engineer

Daniella Flores is a senior software engineer who works on an all-male team for a credit company. As a 20-something Hispanic and creator of blog ILikeToDabble.com, she believes that when it comes to women and money, it’s all about paying yourself first.

“Pay yourself first every time you get a paycheck and by that I mean, automate transfers into savings accounts and investment accounts so you can grow your money,” says Flores.

“Make payments towards debt every two weeks instead of every month. Automate as much as you can, but always track where your money is going.”

With a Chime bank account, for example, you can automate your savings through our round-up program and also save 10 percent with every paycheck. Putting money away for yourself first is a great way to ensure your financial wellness.

Bottom line

When it comes to women and money, it’s all about advocating for what you’re worth and going after what you deserve.

If you’re a female entrepreneur, you’ll also want to make sure your business is financially healthy, too. Just remember: Financial wellness can provide the foundation you need to weather the storms both personally and in your business life.

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