Open Account Benefits Explained
Open account benefits are available when you have an open account with a bank or credit union. These accounts can help save you money on fees for check cashing, money orders, third-party debit cards, and bill pay services.
Each state has its own set of statutes pertaining to open accounts. From statutes setting limitations and interest rates to other issues, knowing what your state's law says is essential for staying compliant.
Pre-approved credit limits
Increasing your credit limit is one of the best ways to improve your credit score. But this high limit can only be obtained if you use it responsibly - that means paying bills on time and making minimum payments.
Your credit card issuer will take into account your current financial situation when determining how much credit you can afford to use. They may also request information such as income, employment status and monthly mortgage or rent payment in order to make a determination.
Some credit cards provide pre-approved offers, which indicate you've passed the initial screening process and are likely to be approved. These are generally helpful indicators.
Credit card companies typically send pre-approval offers in the mail, via email or on the phone. Alternatively, you can request a pre-approval online - typically taking less than a minute to complete.
When applying for pre-approval, the lender will run a soft credit check to determine your eligibility. After that, they'll do a formal credit pull before issuing you with either a card or loan.
Before applying for a formal loan or card, this is an effective way to research your eligibility and see if you meet certain criteria. Unfortunately, it doesn't guarantee that you will be approved.
Furthermore, you never know the type of interest rate that will apply. Some credit cards have variable interest rates that fluctuate based on market conditions; other charge no interest until all your available credit has been used up.
Credit limits differ among issuers, but some cards offer as high as six figure credit limits for the most creditworthy applicants.
Your credit history and recent inquiries are two factors issuers take into account when setting your credit limit. A long history of good credit will increase your chances of receiving a higher limit, while too many recent applications for credit may reduce them.
A pre-approved credit limit increase is an excellent way to improve your credit score and make it simpler to finance the things you desire. But, like any other type of credit card offer, it's essential that you weigh the advantages against potential risks.
Flexibility in how you use your credit
Banks are constantly searching for ways to increase their profitability, and one of the best strategies is offering cash or signup rewards to new customers. While these bonuses may be appealing to millennials, consumers should be wary that many of these deals lack true money-back guarantees and could take away from earnings if you don't meet minimum balance requirements.
Rewards can range from free ATM cards to higher interest rates on existing credit cards. No matter the reward type, take the time to research each bank's offerings carefully to determine which ones are most beneficial for your needs.
Top-rated banks in this category often provide rewards for online banking, such as account-specific debit cards and check writing services. Some even feature mobile app integration.
Though these products aren't cheap, they provide an effective way to monitor your spending and earn extra credit points in the process. Furthermore, they enable you to compare the pros and cons of various lenders so that you can make an informed decision when applying for a mortgage or other major loan.
The most crucial aspect of any credit card is to manage it responsibly. A general guideline is never to exceed your approved limit and pay off in full each month; not only will this keep your credit score healthy, but it could also save you money in the long run.
No minimum balance requirements
Banks or credit unions may require you to deposit money in order to open a checking, savings, certificate of deposit (CD) or money market account. This could also be necessary in order to qualify for an APY or avoid fees.
Most banks and credit unions don't require you to spend more than $25 to open an account, with some even offering free checking with no minimum balance requirement. Another way around the minimum balance issue is by setting up direct deposits into your account or setting up recurring transfers. The best way to ensure you don't hit the bank's minimum balance requirements is by opening a fee-free account like Huntington offers (Asterisk-Free Checking(r)).
No monthly fees
An open account can save money on fees for check cashing, bill pay services and third-party debit cards. On average, Michiganders without access to a savings account spend over $3,000 annually in fees and costs related to these services.
One of the primary advantages of having an open account is being able to make mortgage payments at your convenience. You don't want your lender charging you a late fee for missing a payment.
To prevent late payments, put your mortgage payment due date on your calendar and set up automatic payments. Additionally, check if your lender will cover any difference in payments if you miss a deadline.
Be mindful of mortgage servicing fees, which can amount to anywhere from 3% - 6% of your monthly payment. These costs add up quickly, so it's best to stay on top of payments and avoid missing any.
Mortgage servicing fees come in many forms, such as corporate advance fees, recast fees and late-payment fees. Each has its own advantages and drawbacks; generally speaking, avoiding late payments is the best strategy since they will help maintain your credit score. Furthermore, not paying late can save money on interest payments too! To learn more about which fees apply to your loan, reach out to your mortgage lender.