Need some financial wisdom here. I have a very longstanding free checking acct (and a credit card) with Bank A. Some time ago, for various reasons mostly involving 0% APR, I opened a 2nd credit card at Bank Z - nothing else. Yesterday I received a flyer from Bank Z offered me $100 for opening a checking account with them.
Details:
Acct. will need to stay open for at least 6 months to keep the hundred smackaroos. Okay, fine. Whatever.
Acct. will need a direct deposit to qualify for no monthly fees. Okay, I think - I already have direct deposit with Bank A, and I think it’s no problem to fill out a form with HR here at work to divert, say, 50 bucks off my paycheck into Bank Z.
Sooooo … is there any reason I shouldn’t take them up on their offer? I could use a hundred bucks, but not if it’s gonna cost me something down the road. Specifically: could opening the acct. **affect my credit rating **in any way? Furthermore, if I open it, keep it open for, say, eight months (long enough to qualify) and then close it, would that affect my credit rating somehow?
The existence of multiple deposit accounts should not impact your credit score. The existence of multiple credit accounts, will impact your credit score.
No, technically a checking account is a demand deposit account, which is actually you giving credit to the bank, not the other way around. (When you deposit the 100 dollars to the bank, you’re loaning them the money and they can do what they like with it, but they have to pay it back to you immediately upon your request - that’s where the ‘demand’ part comes from.)
Anyway, no impact on your credit score.
ETA: The length of time also doesn’t matter. BUT - ask the bank if they bank if they will pull a credit report on you Sometimes they do this if they offer overdraft preotection. The ‘hard pull’ can show up on your credit report for up to 2 years, but credit inquiries have a minimal impact on credit score (usually less than 5 points).
Well, we have one for the Groceries, one for the regular monthly checks, one for my wifes Charities and ‘Causes’, one for Christmas shopping and one for large purchases.
For the most part we only use the groceries and regular ones. Now, more than ever, we use things like bill pay or debit cards rather than checks, but they’re still called checking accounts. All are free by the way.
I assume you checked fine print, like minimum balances, minimum monthly fees, and so forth? The last “free” account I was offered required an average monthly balance of $5,000 or they charged a fee.
I don’t know anything about how a credit score is calculated, but I find an extra checking account handy. I use the debit card from one account for all online purchases, and generally only keep enough in it to cover what I’ve spent. That way, if my card information is ripped off, they can’t empty out my regular checking account or destroy a credit account.
Of course, both my accounts are with the same institution, so that I can transfer money into the spare account using online banking.
You know, Saltire, I hadn’t even thought of using it as a way to keep potentially hackable funds separate. Thanks for bringing up that point. (I do nearly all of my online shopping thru the big boys like Amazon and Overstock, but still … )
Gary, no mimimum balance, and no fee if I either a) direct deposit (no mention of a minimum, but I bet there is one - I doubt they’d want me to DD a nickel per payckeck!) or b) make at least 5 debit card purchases per month on that account. Otherwise it’s $6/month - more than I’d want to pay, so obviously, I’d have to stick to a and/or b.
Something has been nagging at the back of my mind for a couple of hours, and I just now thought of it.
Saltire, I was always taught that you should neverevershmever use a debit card for online purchases. Always a credit card, never a debit card. That way, if there’s a dispute about the charge, the CC company will (sometimes) go to bat for you. If it’s a debit card, that’s it, the money’s gone.
The people that ask these types of questions obviously haven’t looked at their own free credit reports recently or they wouldn’t ask them. The method for calculating a FICO score and other types of credit scores is a little secretive but they will show you the base information that goes into it. Most people are more surprised about things that aren’t included more than the things that are. They don’t care how much money you make or how much you have in the bank or invested somewhere. It is irrelevant to the credit report. Lots of bill types, especially those for things like utilities aren’t included either unless they go into collections. You can also pay bills late every month and still keep a great credit score because the first credit score penalty starts at 30 days late and gets worse from there but there is no credit score hit earlier than that.
For anyone that isn’t informed on this type of thing, there are three major credit reporting agencies in the U.S. and they have to give you a free report each once a year. Request one every 4 months rotating between them through www.annualcreditreport.com and see what they really track. Once you go over those, it is easy to understand what goes into it and what doesn’t and can help you figure out ways to keep your credit score pristine even if you are a little short of cash for a while.
You can cancel a check, even if it is more difficult. It sould seem odd that a debit card would not also have this ability. It’s still a checking account.
I sure hope so, since I’m still paying (figuratively, not literally) for the credit card I got right out of college. I got paid on the first of the month, but they had their stuff due on the 28th. All I had to do was miss one payment, and even my minimum was too high for me to afford.