Using a Bank or Credit Union

1. Using a Bank or Credit Union consumer.gov

2. Why use a bank? • A bank is a place to keep your money safe • A bank’s services include: • checking accounts and savings accounts • debit cards and credit cards • loans • check cashing and money transfers • Check cashing and money transfers might cost less at a bank than at other places if you have an account

3. What is a credit union? • Offers the same services as a bank • You have to be part of a group that is allowed to join • For example, if you: • live in a particular community • are a member of a place of worship • are an employee at a certain company

4. What is a checking account? • A place to keep money safe until you need to spend it • Often called a “bank account”

5. Why would you have a checking account? • To: • keep your money safe • be able to pay with a debit card or check • be able to get cash from an ATM • pay bills online • get access to loans, depending on your credit history • cash pay checks or wire money

6. What is a savings account? • An account for money you want to save • It keeps money you want to save separate from money you might spend in your checking account

7. Why would you open a savings account? • You might use a savings account to: • save money for emergencies or goals • keep your money safe • keep some money separate from the money you spend every month

8. How do you choose a bank or credit union? • Before you open an account: • compare the services and fees at a few banks or credit unions. Go to their websites or visit in person • find out what kind of checking and savings accounts are offered • ask what fees you will pay for each account

9. What fees should you ask about? • A bank or credit union might charge you for: • having a checking account • using a debit card • getting cash from another bank’s ATMs • having less than the minimum balance in your account • spending more money than you have in your account • You might avoid some fees if you ask your employer to have your paycheck deposited directly into your account

10. What if you get a debit card? • A debit card is a way to pay for things • A debit card is connected to your account • You get a debit card from your bank or credit union when you open a checking account

11. How does a debit card work? • A debit card: • takes money from your checking account • lets you get cash at an ATM or “cash back” at a store • does not increase your debt • A debit card has “a pin number” you need to enter to buy things or get cash at an ATM

12. How are debit cards and credit cards different? • When you use a credit card: • you are borrowing money to spend now • you get a bill to pay later • you pay extra money in interest if you don’t pay your whole bill off every month • When you use a debit card: • you are using money you already have • you will not get a bill

13. Can you use a debit card to shop online? • You can, but it is not the safest choice • Credit cards are a safer choice for buying things online

14. What if you run out of money? • If you don’t have enough money in your checking account: • your debit card will be rejected • or, with “overdraft protection,” you might pay a high fee

15. How can you avoid running out of money? • Write down what you spend or take out of your account • subtract what you take out from the money still in the account • that is how much money you have left • remember to subtract any fees

16. Choosing a Bank or Credit Union consumer.gov