How to Get the Best Bank Account: A Bankruptcy Perspective
Bank Accounts are almost a requirement of being an adult. Direct deposits, bill pay, spending and savings tracking, and so much more of our lives depend on the ability to store and access our money. There are many types of bank, savings, and money-storing accounts available. However, many of them are predatory, and take a huge chunk of your money as payment for their services. You can do better! Banks should be willing to hold on to your money for free and give you benefits, you just have to shop around and know what to look for when signing up for a new account.
Filing bankruptcy adds challenges to finding a bank account. Often times, debtors include their bank in the bankruptcy because they are overdrawn or owe them money on a loan or credit card. Banks will shut down accounts if a customer owes them money when filing a bankruptcy. What's even worse, is that bank reports can report overdrawn accounts to a system that other banks can see. Under the Fair Credit Reporting Act (FCRA), those close accounts can remain on your record for up to 7 years. Bankruptcy does not remove those reports from your account. You are able to reach out to the two larger bank data collection agencies, ChexSystems and Early Warning Services, and dispute wrong information. You can also request a free report from these agencies once a year. Furthermore, banks are not required to do business with you after filing bankruptcy. They still have to manage their risks and expenses, so don't get too upset if you face some rejection. With that being said, there are still plenty of banks that want to do business with you. Shop around and check out places like credit unions or online banks, which provide better service or features than some of the bigger banks around.
Regardless of where you are in the bankruptcy process, you will definitely want to look for the following features in a bank account. Review the terms, fee schedules, and ask the banker if you are unclear about their policies. Here are some initial considerations when opening a checking account:
Make sure the account has no monthly fees. Some banks have requirements before they give you free service. If you go to one of these banks, ask what requirements they have for maintaining a fee-free account. You may be required to have a direct deposit or keep a certain amount in the account at all times.
Review your overdraft options. Choose an account with lenient overdraft options. Understand the fees and options they have. You may want to choose rollover protection from a savings account rather than keep incurring daily overdraft fees.
Understand withdrawal options & ATM fees. You definitely don't want to pay for withdrawing your money from an ATM. Check to see what ATM system your bank uses and how convenient that is for you. Check for daily withdrawal limits and understand how you can access your money.
Get a debit card that is convenient for you. All banks offer a debit card to make purchases at stores. This is essential if you want to buy groceries, pay utility bills without using a check, and paying for gas at the pump. Make sure there aren't any hidden fees with using a debit card, and understand what overdraft protection you have if you accidentally charge for more than you can pay for.
Get an account with easy to access balance summaries and transaction reports. Ask about what smartphone apps your bank uses so you can monitor your accounts. Many banks will provide notifications through the app about low balances and deposits. This way, you can properly manage your finances without the headaches of having to call or visit a branch for balances.
Only use accounts that insure your deposits are safe. Look for Fderal Deposit Insurance Corporation (FDIC) insured accounts. These type of accounts protect your money if the bank itself goes bankrupt or is unable to pay out on its accounts. If you choose to bank with a Credit Union, look for accounts that are protected by the National Credit Union Share Insurance Fund (NCUSIF).
When you finally choose an account, be sure to bring proper identification with you when you apply. You will have to fill out a few forms, but read them carefully. Ask for fee schedules to verify the information. Banks will often try to push other types of accounts to make more money, feel free to decline their offers and choose only the ones that work for you. You can always investigate other types of accounts later and open one down the road.
You may also want to look into online-only accounts. Usually these types of accounts have better fee structures because they don't have to maintain the costs of running brick and mortar branches. Banks like Ally, Capital One, and Charles Schwab, all have low or no fee accounts. They also have more technological features like Apple Pay or Samsung pay to make secure payments using your phone. However, you can often find similar features with local banks nowadays, too.
Take your time to shop around for the best account. Banks want your money (they make interest on keeping your money in their accounts). Find the best fit for you, and don't waste your money on fees or services you won't use.
Since 1997, the St. Louis attorneys at The Law Office of Tracy A. Brown, P.C., have helped thousands in Saint Louis stop creditors from harassing, garnishing, and threatening clients through Chapter 7 and Chapter 13 bankruptcy filings that alleviate excessive debt. Contact us today to free your future from your past.