Look, if you’re keeping money in your house, using check cashing services to get paid, or spending your hard-earned dollars on money orders to pay your bills, you’re using “alternative financial services.” Alternative financial services are a big industry. According to the Federal Reserve, these companies handle more than $320 billion in transactions each year, and make as much as $36 billion each year in profits, just for cashing checks, writing money orders, and making payday loans. Often, the people who can least afford to pay the premiums of these services are the ones who have no other choice but to use them. A checking account can eliminate a lot of these fees, and community banks lends at rates much lower than most payday lenders.
A Federal Reserve report notes that 6 percent of Americans are “underbanked.” And 14% of households making less than $40,000 don’t have a bank account. Half of the people who don’t have bank accounts think they don’t have enough money to have a checking account. The truth is this: at Ponce Bank, our Simply Free Checking account is for everyone. There’s no minimum balance fee and no monthly fee!
Here are some reasons why it’s time to get a checking account:
1. Alternative Financial Products are Expensive (and Time Consuming to Use)
Check cashing services can charge you up to 2.27 percent on every check, money order, or draft you cash in New York. So, if you’re trying to cash a $1,000 check, that’s $22.70 that you’re basically giving away to the check cashing company. When you get a checking account with Ponce Bank and set up direct deposit (meaning your paycheck goes automatically into your bank account—convenient, right?), you can save money and in some cases even earn interest on your deposit. At Ponce Bank, we can pay you to keep money in our bank. Sounds a lot better than having to walk in the snow, wait in line, and spend money to get money, right? Best of all, when you have a checking account at Ponce Bank, you’ll have more immediate access to your money. Plus, you can avoid losing checks.
2. Pay Your Bills More Easily
If you’re still buying money orders, you’re giving away money to the alternative financial services machine. At Ponce Bank, you can set up direct payments to pay your regular bills automatically, meaning no more money orders (and in most cases, no more checks). And if you don’t want to set up direct payments, that’s okay, too. Some of our most popular checking solutions let you order free checks. Never pay for a money order again; never pay for a check.
3. Safety & Peace of Mind
If there’s a fire at your home and all the money gets burned, or if there’s a flood and all the money washes away, or if your home is robbed and all the money is stolen, your money will most likely be lost for good (unless you happen to have a really good renter’s or homeowner’s insurance policy). When you put your money in a checking account, your money is insured by the Federal Deposit Insurance Corporation up to at least $250,000. You can’t say the same about the money you’ve stashed away at home.
4. Track Your Spending
A checking account provides you with a convenient record of your deposits and purchases. Need to figure out which streaming or online subscriptions passed their free trial period, or how much money you spent last weekend? A checking account can provide a record of it all. This allows you to track your spending and create a budget.
5. Proof of Payment and Protection Against Errors & Fraud
Are you facing late fees for your rent, electric bill, or internet bill, even though you know you’ve been paying every month? A checking account provides a record of when payments were made and when funds were withdrawn from your account. So, if your landlord loses your rent check, and the money wasn’t withdrawn, you can place a stop payment on the check you wrote, and issue a new one. And if, the money was withdrawn from your account, you can show the record to your electric company, landlord, or internet provider and set the record straight. If you’re paying your bills with prepaid cards or money orders and a company or landlord fails to credit your account, you may not have a record that you paid your bills even though you withdrew the money. A checking account gives you powerful protection against other errors or fraud. Bought something on E-bay that never got delivered? Your checking account provides a record that you paid for goods or services, and you may be able to use this record to get a refund.
6. Start building your credit
Credit can feel like a catch-22. We want a credit card, but no one will give us a credit card because—well—we don’t have a credit card to begin with. Or, we have a low credit score because of a medical emergency or because we lost a job during the pandemic… Low credit or no credit can cost you. Landlords may check your credit history when deciding whether to rent to you, insurance companies may check your credit history when deciding your insurance rates, and if you ever need a loan to launch a new business, no credit means no loan. Building credit can be challenging. But with a checking account, you can usually start building a track record that shows that you pay your bills on time.
7. Debit Card
If you open a checking account, you can get a debit card. With a debit card, you can make all the purchases you’d normally need a credit card to make. This means you can shop online, use your card at stores and restaurants, and leave the Benjamins safe in your checking account where they belong. If you’re still using a prepaid card to make online purchases, you may be losing your hard-earned money to activation fees, monthly fees, and even fees for using the card at an ATM.
8. Online Banking
Whether it’s online dating, ordering takeout lechon, or watching cat videos, we can do almost anything online these days. Why not bank as well? With a checking account, you can pay your bills, make sure your boss paid you, send money to your abuela back home, and track your spending habits, all at the click of a button.
9. You Can Go to the ATM
If you don’t have a checking account, your access to money is limited to prepaid cards, cash, and whether you are near a check cashing service, payday loan service provider, or other alternative financial service. Once you have a checking account, you can access your money from an ATM (provided you have the funds in your account).
10. Banking is Power
Our culture favors those who have a bank account. When it comes to getting paid, paying for goods and services, disputing payment issues, getting credit, and sheer convenience, people who have a bank account can avoid common financial hassles, and save more time. Think you don’t make enough money to open a checking account? With Ponce Bank’s Simply Free Checking, you can bank with us whether you have $50 or $250,000 to start.
So, you totally need a checking account, right? How do you choose which bank to trust with your hard-earned money? First off, your money is safe and sound with any FDIC insured bank (up to insurance limits). But should you choose a big-name bank? Or a community bank?
When you put your money in any bank checking account, the bank invests your money by making loans. Big banks might invest your money in big oil or big corporations, or some other cause you may not believe in. They may also make loans all over the place, moving your money outside of your community. When you bank with a community bank like Ponce Bank, your money gets invested back into neighborhoods in and around New York City. We help our communities’ small businesses grow, help local families get mortgages, and invest in worthy local causes.
For the big banks, the most important customer is often a corporation. Ponce Bank is a community bank. Our most important customer is you.
You work hard for your money. At Ponce Bank, we can set up a checking account to let your money work hard for you—whether that’s automatically paying your bills so you can spend your free time focusing on what matters, rewarding you for saving money by offering you a competitive interest rate, or helping you work toward other financial goals like college tuition or an emergency medical bill. Come sit down with us and learn about which checking account solution at Ponce Bank can work for you.
Please note that this blog is provided for general informational purposes only. Some of the information may not be applicable or appropriate for all people, and the information is subject to change. You should consult with appropriate advisors to determine what is best for your individual situation. Products, services, terms and conditions are subject to change.