What to Do When You Have Been Rejected for a Checking or Savings Account

Most adults and many young people have a checking and/or savings account; but did you know that financial institutions can turn you away when you try to open an account? It is important to know why some consumers are denied checking and savings accounts and what to do if it happens to you or someone you know.

A common reason financial institutions deny applications for checking or savings accounts is that reports show that a previous institution closed an applicant’s checking account due to unpaid overdrafts. Mismanaging of your accounts can cost you. The Fair Credit Reporting Act (FCRA) allows negative information to appear on your reports for up to seven years. Such negative information can include checks written without sufficient funds, or even possible fraudulent transactions if not resolved. A poor credit report can also hurt your chances of opening a new account.

If you are denied a checking or savings account because of mistakes you’ve made, ask the bank or other financial institution if they will reconsider. According to Keith Ernst, FDIC Associate Director of Depositor and Consumer Protection, “Every bank decides for itself how to evaluate the information in a consumer’s report.” Just because you have negative information on your report does not necessarily mean a bank will want to reject your business. Also be sure to request the report the bank used to deny your account. You might find incorrect information; if so, you will want to dispute it, providing the correct information wherever possible. This might enable you to open up a new account, after all.

Another option for getting needed financial services is a “second chance” account. According to the FDIC, “one in four banks offers accounts that give an option to some consumers unable to open a regular checking account.” Even though these accounts have higher fees and added restrictions, they are easier to manage and cost less than money orders and check-cashing services. You might also be required to attend free money management training, but look at that as a bonus: it never hurts to learn more about managing your money.

READERS, what do you think?

1.    Have you ever tried opening a savings or checking account? Were you able to open one? If not, did you find out the reason?

2.    What would you do if you were rejected for a savings and/or checking account?

Reference:

Federal Deposit Insurance Corporation. (2013, Fall). You’ve been turned down for a checking or savings account. Now what? FDIC Consumer News. Retrieved October 22, 2014, from https://www.fdic.gov/consumers/consumer/news/cnfall13/deniedchecking.html.

What are you More Afraid of: Catching Ebola or Crossing the Street after Getting off the School Bus?

Visit NBCNews.com for breaking news, world news, and news about the economy

Every day more and more drivers are endangering the lives of children by passing stopped school buses. The police are using more technology to catch this illegal act.

Disclaimer: There is some disturbing content in the video. 

So far, the chances of catching ebola in this country are remote. But getting hit while crossing the road is more likely than you might think. Whether you are driving or walking, be careful and watch out for others!

Readers, what do you think?

1. Have you ever seen someone violate the law? Would this be something you would report to the police?

2. How would you feel if this happened to your brother, or sister? 

Reference:

Rossen, J., & Billington, J. (2014, October 20). New technology targets drivers who      pass stopped school buses. Retrieved October 20, 2014, from                        http://www.today.com/parents/new-technology-targets-drivers-who-pass-stopped- s    school-buses-2D80217961

Save Money by Minimizing Student Loans

Do you know any students who have borrowed more money for college than they know how to pay back? These might be students a few years older than you, and they might be entering the job market by now. What are the struggles they face?

Fortunately, as a recent blog entry showed, more students now are finding ways to minimize the amount they borrow for their education and/or career training. Many students work to earn money for their education, and many families are using their savings to avoid student loans. This saves them a lot of what they would otherwise pay in interest. It enables them to pay less money in all, and pay back their loans much earlier than they would otherwise.

It might not be a concern to you now, but you will likely want to buy a house eventually, and that costs more than your education: a lot more. There will be many things you will need to save money for over your lifetime: for down-payment on a car, and eventually on a house. Farther down the road, you will also want to save for your children’s education and for your own retirement.

Don’t take this as a downer; it’s simply the truth. It’s the reason why your parents might be concerned about your spending habits now. Over-reliance on college loans, and using them to pay your living expenses, can lead to crushing debt.

And consider this one other fact: Educational loans are not covered under bankruptcy law, so you can never get out of them! Defaulting on your student loans can lead to an existence similar to debtor’s prison, which was abolished many years ago. This is something we all want to avoid.

College costs more all the time, but many students choose to attend less expensive colleges. By paying in-state tuition, you save a great deal. You also might consider attending a less expensive two-year community, technical, or junior college, and then transfer your credits to a four-year university. Just be sure that the four-year institution you want to transfer to will take your credits.

By attending a community college in your area, you could save money by living at home. You might also be able to do this if you attend a four-year institution that is close enough to home. This way, you don’t have to pay for a dorm room or apartment, and you also save on food expenses.

Reducing your dependence on student loans will save you a lot in the long run.

READERS, what do you think?

How much do you think you could save by living at home while going to school, rather than in a dorm or apartment?

And what are other ways you can think of to save money on your education and living expenses while in school?

Reference:

Hicken, M. (2014, August 1). How Americans Are Paying for College. CNN Money. Retrieved from http://money.cnn.com/2014/07/31/pf/college/paying-for-college/index.html?iid=SF_PF_River.