5 Reasons You Can Be Denied a Bank Account -- and What to Do About It
If you're turned down for a new bank account, you have options. Keep reading to learn more.
You don't need a good credit score to open a new bank account. But that doesn't mean banks approve everyone who asks for one. When you apply at a bank, if certain red flags appear, you could be denied a checking or savings account.
Fortunately, in a lot of cases, you may be able to take steps to fix the situation. Keep reading to learn about five reasons you can be denied a bank account and what you can do.
1. Your ChexSystems report contains negative information
Banks run a ChexSystems report when you apply for a new account. A ChexSystem report contains information that includes:
- Checking and savings account closures for the past five years. This includes information about any money you owe for unpaid fees or an overdrafted account.
- The number of times you've applied to open a new account within the past three years.
- Returned (bounced) checks for the past four years.
- Check orders for the past five years.
In addition to ChexSystems, banks might also receive information about your banking history from Telecheck, Early Warning Services, or another credit reporting agency.
What you can do:
First, review a copy of your ChexSystems report for free by visiting ChexSystems.com.
If you owe money to a former bank, you may have to pay it if you want your ChexSystems report to reflect that the account was satisfied. Otherwise, you may have to wait until it ages off and is no longer pulled in your ChexSystems report (approximately four to five years) before you can open a regular account at a new bank.
2. Your ChexSystems report contains errors
Mistakes happen. The good news is that ChexSystems has a process in place for correcting them. Possible reasons for inaccurate information include:
- You were mixed up with someone else
- You were the victim of identity theft
- Human error
What you can do:
Follow the instructions on ChexSystems' home page to initiate a dispute.
3. Your current account may have negative items
If your current bank account history shows overdrafts, excessive withdrawals from savings, or late bill payments, a bank might turn you down for a new account.
What you can do:
Put safety measures in place to help you avoid outcomes that may cause a bank to deny you a new account. For example:
- To prevent late bill payments, set up an automatic payment for the minimum due each month on your bills.
- Use a debit card instead of paper checks to minimize the risk of overdrafts
- Watch out for overdraft fees. Depending on your bank, overdraft protection might come with a hefty fee and not be worth the costs. For more information, check out our guide on overdraft protection.
- Use a budgeting app. The best budgeting apps will help you monitor your spending. That way, you can track how much money you spend every month so that you don't have to move it in and out of savings.
4. You filed for bankruptcy
Each bank handles bankruptcy differently. Some banks won't open new accounts for people who recently had a bankruptcy discharged. This is most common if you discharged a debt at the same bank where you want to open the new account.
What you can do:
Shop around for a new bank. And be prepared for the possibility that you will be limited to opening a savings account and not a checking account.
Before you open a new bank account after bankruptcy, take stock of your remaining debts. If you have debts that couldn't be discharged in the bankruptcy, those creditors may be able to legally seize the funds in your new bank account.
5. Your identity can't be verified
Federal law requires financial institutions to verify the identity of all account holders. Most banks require two forms of identification, and at least one must be government issued.
Identity verification can fail for a number of reasons, including a frozen credit report, an information mismatch, a typo, or insufficient documentation.
What you can do:
Make sure your credit reports are unlocked at all three major credit bureaus (Equifax, Experian, and TransUnion).
Also, gather any documentation you can find that shows who you are. Try to come up with at least two of the following items:
- Driver's license/state-issued I.D.
- Foreign government–issued I.D.
- Passport or passport card
- Work I.D.
- Social Security card
- Birth certificate
- Military I.D.
- Government employee I.D.
- DHS employment authorization card
- Permanent resident card (green card)
- Credit card
- Health insurance card
- Marriage certificate
- Native American document
- School I.D.
- Voter registration card
Talk to a branch manager to find out if they can be flexible enough to accept whatever you have. If one bank says no, try another. Worst case scenario, you'll have to obtain new ID documents.
How to get a new bank account after you're denied
If you can't open a regular bank account, look for a second chance account. For this type of account, either the bank won't check your ChexSystems report or they will run it but offer more lenient approval criteria.
Just make sure to watch out for fees. Some, but not all, second chance checking accounts come with fees, which can include:
- Monthly fee
- Statement fee
- Debit card fee
- Other fees
Life without a bank account can be expensive. It costs money to cash checks or pay bills on an a la carte basis. Also, your money may be at risk of loss or theft if you have to carry it around in cash rather than store it in a federally insured bank. Take the reins on your finances by removing obstacles to a new account or finding an account that is more appropriate for your situation.
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Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
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Kimberly has been a personal finance writer/editor, consumer credit expert, and financial literacy advocate since 2001. Tweet her @rotterwrites.
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By: Dana George | Updated - First published on July 25, 2023
Costco has a faithful legion of fans -- otherwise known as members. There are 123 million of them, to be precise. Throughout the years, Costco has added new membership benefits, some less well-known than others. Here are four that members may not realize exist.1. RV parkingWhether you spend part of each year visiting the highways and byways of North America or you're hoping to rent an RV for your next vacation, it's good to know that some Costco locations allow RVs to park overnight in their lots. Free overnight parking can certainly cut down the cost of travel.Consider the convenience. You arrive near closing time, pick up all the items you've already burned through or forgotten to bring, and spend the night in a well-lit lot. Granted, pulling an RV into a (typically) packed Costco lot may not be the easiest thing you've ever done, but once the lot clears out, you may even hear the sound of crickets.Notice we said that some Costcos permit overnight parking for RVs. When a store does not, it's often because local ordinances don't allow it. However, with so many Costcos scattered across the country, you should have options.The easiest way to determine which Costcos allow overnight RV parking is to check this Costco locations finder. Once you see one near where you plan to stay, call that store and ask to speak with the manager. Once you have them on the line, ask about their overnight policy. If the store does permit overnight parking, ask for permission to stay. According to the Camper Report, Costco has rules for campers, so you may want to ask where you can get a copy of those.2. Home, auto, renters, and specialty insuranceIn the back of our minds, most of us realize that Costco offers insurance, but we're not sure of the details. Partnering with CONNECT, powered by American Family, Costco members receive discounted rates on many of their insurance needs. Beyond the initial discount, CONNECT allows you to add more. For example, you may qualify for a safe driving, multi-policy, or student discount.And if you're an Executive member, CONNECT sweetens the pot even more by providing you with benefits like roadside and lockout assistance.At a time when many people are unhappy with the insurance industry, 9 out of 10 members who sign up for CONNECT coverage go on to renew their policy with the insurer.3. Home and business suppliesWhile it may occur to you to pick up envelopes and printer paper at Costco, have you ever taken advantage of the low prices on items like checks, ink stamps, and address labels? Many of the supplies you need to take care of business -- at home or in the office -- are available for up to 50% off.Executive members enjoy an even deeper discount.4. Floral deliveryOnce you factor in delivery costs, sending a lovely bouquet of flowers to someone can cost a small fortune. That's not the case at Costco. Costco's online floral department offers everything from anniversary and graduation bouquets to bulk flowers. And here's where the real savings come in: Delivery is free. The price you see listed on the site, plus tax, is the price you pay.Few things are more frustrating than typing your credit card number into a florist's site, only to learn that delivery costs nearly doubled your purchase price.As Costco layers on new perks, keeping track of them may become even more difficult. It's a good idea to check periodically to see if there are any you're not taking full advantage of.
SNAP Benefits Will Increase in 2024. Here's How Much a Family of 4 Will Receive
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By: Emma Newbery | Updated - First published on Aug. 7, 2023
Are SNAP benefits enough?A monthly payment of $973 for a household of four equates to around $8 per person per day. While SNAP benefits aren't designed to cover everything, it isn't easy to feed a family on around $2.66 per person per meal. Indeed, research from the Urban Institute showed that the maximum benefits often don't cover a family's food costs. "Amid inflation, SNAP benefits did not cover the cost of a meal in 99 percent of counties in 2022," said the report.The new benefit amount -- a monthly increase of $34 for a household of four -- is roughly in line with cost-of-living increases measured by the Bureau of Labor Statistics (BLS). Its latest Consumer Price Index figures show that the cost of all items in June, 2023 was up 3% over the year before. However, inflation does not impact all aspects of life equally.The BLS data also shows that food at home increased by 5.7% year over year. The new SNAP benefits do not match this. Hypothetically, a 5.7% increase in benefits for a family of four would mean a new monthly payment of $992, rather than the planned $973.In addition, this year brought the end of the pandemic-era emergency food benefits throughout the country. According to CBPP calculations, this meant the average person received about $90 a month less in SNAP benefits. Even factoring in the increased SNAP benefit amount, many households have seen a significant drop in their food benefit amount, and the revised 2024 payments will do little to close this gap.How to make your SNAP benefits go furtherIt can take time and energy to provide healthy food for your family on a strict budget. The challenge is that in a busy household, time and energy are also limited resources. Even so, if you can carve out some time to plan your grocery-shopping trip, it can make a big difference.Here are some ways you might stretch your SNAP benefits a little:Use cash back apps and coupons: Look for cash back apps that work in stores that take your EBT card. You'll usually need to download an app and then scan your receipt after you've been to the store. Pay attention to coupons, whether in store or online as these can often carry hefty discounts.Always shop with a list: Planning your food shopping is one of the best ways to reduce costs. Even more so if you use a cash back app or coupons. Check what offers are available on items you normally buy before you go shopping. Mark the items that qualify for rewards or discounts on your list, so you don't miss them when you're shopping.Look for double up programs: There are Double Up Food Bucks or other programs in various states that essentially give you two for one on all produce at participating farmers markets and stores. It's a great way to get more fruit and vegetables for your SNAP dollars.Buy in bulk and batch cook: It isn't always easy to find the extra cash for bulk buying when you're eking out every cent. However, if you can manage it, you may be able to save both money and time. You might, for example, batch cook a stew and freeze portions for future meals.Unfortunately, food insecurity still impacts many American households. If you don't have enough money to feed your family this month, look for additional help. Find out what food pantries and soup kitchens are operating in your area on which days, and whether you'll need to present any documents. Call United Way at 211 for information about assistance programs in your area.
Does Your Income Make You Upper Class, Middle Class, or Lower Class?
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By: Christy Bieber | Updated - First published on Sept. 5, 2023
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5 of the Best Costco Deals for September 2023
![Maurie Backman]()
By: Maurie Backman | Updated - First published on Sept. 7, 2023
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4 Rich People Habits You Should Copy
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By: Christy Bieber | Updated - First published on Sept. 13, 2023
If you want to be rich, it can be helpful to do things that millionaires and other wealthy people are doing. Fortunately, identifying the habits of financially successful people doesn't have to be hard. Here are four rich people habits you should copy. 1. Use debt as a toolWealthy people are not afraid of debt. They understand that it can be used as a tool to help them use their money as wisely as possible and increase their net worth.Many wealthy people borrow money to do things like start businesses or invest in real estate. They also borrow when they can do so at a low rate, rather than tying up their cash in something that doesn't provide a very good return on investment. For example, Warren Buffett got a mortgage when he bought his home even though he could have paid cash -- because he wanted to invest his money instead. He borrowed about $120,000 in 1971 (in the form of a mortgage loan) and invested the money instead of paying cash for the home. The invested funds ended up being worth around $750 million. Rather than being afraid of borrowing, be smart about when and how you use debt. For example, it makes sense to take out a mortgage to buy a home rather than paying cash because your home is an asset that should increase your net worth, and the mortgage interest rate will usually be lower than the return you could get with other assets like stocks. But it does not make sense to put a vacation on a credit card, as you'll just be incurring interest for something that doesn't increase your wealth in the long run. 2. Prioritize investing Research has shown wealthy people save at higher rates. This doesn't apply to people who were born rich either. Wealthy people with "new money" tend to have even higher savings rates and earn higher returns. When you prioritize investing, you can grow wealthier much more easily because your money is working for you. You don't have to earn every $1 that grows your net worth. Your money can earn returns, which can be reinvested and earn even more for you.If you invest $10,000 today and earn a 10% average annual return, that $10,000 will be worth $174,494 in three decades even if you never add another dollar to your account. That's a lot of money you didn't have to personally earn.The more you invest, the more you benefit from compound growth and the easier it is to get rich -- since less effort is required from you to make money. Open a brokerage account today if you want to build wealth. If you're not sure what to invest in, an S&P 500 index fund is a pretty smart bet. 3. Develop multiple income streamsMany rich people have multiple sources of income. Their money may come from a job, but also from investment income or other sources. If you are dependent solely on one job, unemployment could leave you without funds and the ability to build wealth. You're also limited in how much you can earn since you only have so much time to work.But if you develop multiple income streams, your finances are less precarious and you can also earn money in multiple ways. You can develop multiple income streams by:Taking on a side hustleTurning your hobbies (such as crafting or dog walking) into a source of incomeInvesting in assets that provide dividendsBuying investment real estateConsider where your interests are and how you can make money outside of work to help your wealth grow. 4. Set long-term goals Finally, many wealthy people look toward the future when deciding on spending decisions. While a vacation or impulse purchase today may seem fun, it's better to look at the big picture, consider what you want to accomplish, and prioritize it.When setting your own goals, employ the SMART principle. Your goals should be specific, measurable, achievable, relevant and time limited. For example, you could set a goal to save $500 a month toward retirement over the next year and track your progress throughout the year. By adopting these four habits, hopefully you too can become wealthy. I've tried them all, and they've made a noticeable difference in helping my net worth grow.