While it may be true that you’re not married to your bank, by taking a few precautions you can enjoy a nicer long term relationship if you utilize these four banking tips that can help you to avoid unnecessary fees and potential problems. The ironic thing about these banking tips is that, they can be implemented quite easily and only require a few minutes of your time, yet the effects that they’ll produce will be long lasting and can help you to make better banking decisions in the future if and when you switch to a different bank.
A lot of people don’t realize that responsible banking practices can help with obtaining loans in the future. Even if your credit is not perfect your bank will analyze your previous banking habits when considering you for a loan. If you are continually over-drawing your account this will appear negatively to a loan officer. However, if you manage your account responsibly there are times that your bank may place more importance on that than minor credit blemishes.
The best solution is to manage your banking just as you would any other line of credit. Some companies do specialize in personal loans for bad or poor credit but these loans typically have higher interest rates. If you have been a responsible bank customer you may be pleasantly surprised to find that you can obtain a loan at your local banking branch.
Here are 4 tips to consider when it comes to successful banking.
Don’t Pay A Fee For Basic Checking Accounts
Among the list of unnecessary bank fees that you should not be paying, checking account maintenance fees is on top of that list. In some scenarios your bank may charge a maintenance fee if you fail to maintain a certain degree of activity in your account. While it may be true that these maintenance fees are typically $5 – $10 per month, which would equate to $60 – $120 per year, just to store your own money. If your current bank has a policy related to maintenance fees, you should try giving them a call to see if you can have your fee waived. However, a more ideal solution would be for you to close your account and open a new account at a different financial institution that doesn’t charge a maintenance fee for checking accounts.
Is It Not Advisable to Use Overdraft Protection
Overdraft protection is a banking service that banks offers which allow their account holders to make a purchase even if their account does not have sufficient funds to cover it. In essence, the banks makes a short-term loan in exchange for a fee, which is usually somewhere between $10 – $36. While it may be true that this may seem like a convenient service to opt in for, it is worth noting that statistics demonstrate that banks generate over $40 billion per year in overdraft fees. Many banking experts recommend that you should not use overdraft protection. The reason being is that, it will act as the foundation for poor banking habits which essentially defeats the whole purpose of accumulating money in a checking account. For example, if you get into the habit of making large purchases, regardless of the fact that you may have insufficient funds simple because you have overdraft protection, you may be tempted to do so several times per year. However, even if the bank only charges $36 for an overdraft fee, this could equate to $180 if you overdraft you account on 5 different occasions.
Take Advantage of Automated Bill Pay Features
One of the other things you can do to ensure that your banking experience is a more pleasurable one is to utilize an automatic payment bill pay plan. By utilizing this plan the monthly bills that you have to services such as your cable service provider or cell phone provider for example, while be charged to your card from your checking account on a predefined date every month, without the need for input on your part. This can help to make your life easier, based on the fact that you’ll know that your bills will be paid on time, in full, every single month. Additionally, there are several other benefits that automatic bill payments have to offer. Besides the fact that it offers a certain degree of convenience some of the other advantages it has to offer includes:
* Helps to Boost Your Credit Score – Credit score agencies will see that you pay your bills on time, every time.
* Helps The Environment – Automatic bill payment plans, eliminate the need for paper bills, or check writing which in essence will decrease your impact on the environment as far as carbon footprint goes.
* Minimizes Risk Of Identity Theft – Due to the fact that it eliminates the need to have your bill mailed to your place of residence which will contain your checking account numbers, you will essentially reduce your risk of becoming a victim of identity theft.
Never Apply for a Loan When You’re In a Hurry
Many banking experts can agree that you should never apply for a loan in a hurry. If you fail to present a package that is appetizing to the lender, you may be denied and that can have a profound effect on your credit score. While it may be true that getting approved for a loan isn’t the most difficult thing in the world, it is worth noting that lenders have become more stringent when it comes to approving loans. As such, they take a look at several areas that you need to be aware of to ensure that you present a complete package to heighten your chances of getting approved. Therefore, regardless of how badly you may need the loan, you should take the necessary steps to become familiarized with the key areas that lenders will be focusing on.