Are you having trouble opening a bank account? There are some alternative options that can suit your needs
Having a bank account is considered one of the basic signs of financial stability. It shows that a person has their finances under control and allows them access to other banking products. In many ways, a bank account holds the key to the whole world of finance.
However, it is a world that is blocked off for many who find it difficult to get on the first step of the financial ladder by opening a bank account. If you have been turned down for a bank account, there are still options and they don’t entail having to keep your money in a shoebox under the bed.
Here are some steps you can take if you have had difficulty opening acurrent accountwith a bank or building society:
Check Your Credit Report
If you have been turned down for a bank account because of apoor credit history, you should check exactly what your credit report says. You are entitled to a free copy of your credit report from a credit agency. It will provide you with details of any borrowing you have made in the past as well as details of any missed payments.
Banks and financial institutions also use your credit report to verify your identity. Take the time to go through your report to find out if there is any inaccurate information contained in it.
If an inaccurate report was the reason you were rejected for a bank account, you can request that the wrong information be removed. You can challenge any aspect of your credit history while you should also make sure that all the details about your identity are accurate and up to date.
Basic Bank Accounts
You can also explore the option of opening a basic bank account. These are accounts that do not offer credit cards or overdraft facilities. As such, there aren’t very profitable for banks to offer, so they normally do no promote them as heavily as their headline products.
However, opening a basic bank account does not require a credit check as there is no borrowing element to it. You won’t get an overdraft or credit card, but you will be able to make payments and withdrawals and get adebit cardwhich you can use at ATMs and to make purchases.
A basic bank account allows you to set updirect debitsand other regular payments and have your salary or benefits paid into it. Some basic bank accounts come with a monthly fee and a minimum monthly deposit requirement.
Prepaid Cards
If you can’t open a bank account, you can still get a debit card by exploring the many options forprepaid cards. A prepaid debit card works in the same way as a normal debit card in that it has a card number and expiry day as well as a CVC number on the back.
However, you don’t need a bank account to get a prepaid card. You must load funds onto the card to use it and you can only spend the money that is on the card at any time. This means there is no credit involved and therefore it is a good option for someone who can’t open a bank account due to credit difficulties.
Alternative Accounts with Suits Me®
Suits Me® is much more than just aprepaid card. Suits Me® provides account holders with an account that is packed full of banking-like features including the option to makepayment transfers, managedirect debits, set upstanding ordersand more.
All banking-like features can be managed throughyour online accountand ourmobile appthat is available to download from both the Apple Store and Google Play Store. All account holders will also receive acontactless Mastercard® debit cardthat can be used in over 24 million places worldwide.
Applying for a Suits Me® accountis quick and easy and only takes minutes using our online application form. Your account will be open within 20 minutes of completing the application and you will gain instant access to your account and our mobile app to start managing your money. Your contactless debit card will arrive in the post within 3-5 working days.
Open Your Account Today
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Prepaid Cards 101: Different Types of Prepaid Cards
Prepaid cards. If you are struggling to open a bank account, a prepaid card can be a good alternative if you don't want to pay with cash but lack access to a checking account. Prepaid cards must be front-loaded (monetary value added to them) before they can be used for purchases.
When the bank denies your application for a checking account, checking your ChexSystems report and fixing any problems or errors could help. If you still can't get a regular checking account, consider getting a second-chance bank account or prepaid debit card to help manage your spending.
You failed to pay insufficient funds fees after overdrawing your account. You have a history of writing bad checks to merchants. You've committed fraud.
If you've been denied a bank account, ask the bank why this happened. Depending on why you were turned down, you may be able to move forward by clearing up your checking account report, trying a different bank or using alternative banking products.
Reported information usually is removed from your ChexSystems file after five years. Until then, you might be able to open a second-chance checking account. These accounts are designed for people who have a record with consumer reporting agencies such as ChexSystems.
Why can't I open a bank account? A bank can deny your request to open an account because of past accounts that were closed due to negative balances, a history of overdrafts or problems verifying your identity. If you're unable to open a bank account, here are some tips on what to do next.
The severity of the issue, the credit reference agency, and the reported information can determine how long you are blacklisted. Negative information on your credit record normally stays for six years before being deleted.
Bottom Line. The primary reasons people can't open a bank account are negative items on a ChexSystems or Early Warning Services report, errors on the reports or bad credit. If your bank account application is denied, find out why.
Second-chance checking accounts allow those who have been denied a traditional account to open a specialized one to help them build a strong financial foundation. Financial institutions offering second-change checking accounts include Capital One, Chime, GO2bank, GTE Financial, Fifth Third, Varo and Wells Fargo.
Then you may have a record on ChexSystems, a database that banks use to check whether potential customers have outstanding accounts at other banks. You also may have a ChexSystems report if you have a history of bouncing checks or mishandling your accounts.
If you have a poor credit score, your bank could see you as higher risk, which can affect your eligibility for opening a new account. However, this score is just one of many other factors considered when you apply for a bank account.
Being blacklisted by banks often results from negative banking histories reported by ChexSystems, affecting account opening. ChexSystems operates like credit bureaus but focuses on banking behaviors, not credit management.
Money market accounts and certificates of deposit (CDs) may provide higher yields.Peer-to-peer lending is another alternative to savings accounts. Credit union bank accounts may provide higher rates than bank accounts, but you must be a member to open one.
Prepaid debit cards and online payment apps make it easier to function without a bank account. No-fee checking accounts with no minimum balance requirements may cost less and be more secure than non-bank options.
Introduction: My name is Dan Stracke, I am a homely, gleaming, glamorous, inquisitive, homely, gorgeous, light person who loves writing and wants to share my knowledge and understanding with you.
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