The idea of signing up for an account with a bank or credit union sounds simple enough: open a new account, add a deposit, and pay a fee.
But for those who’re looking for a hassle-free way to get their first credit card or bank account, this is not an option.
“I’ve never been more confused about what I should do with my money than I am now,” said Anna L. Johnson, a 36-year-old single mother of three from New York City who has a $20,000 student loan from Community First Credit Union.
“I’ve had three or four different banks tell me, ‘Well, you have to get a credit card to get it.’
I have two credit cards that I got through my bank, but the bank told me, you can’t get credit through a credit union.
[But] I haven’t been able to do anything about it.”
[Related: Credit unions and payday lenders are becoming less and less profitable] [Source: The Wall Street Journal, 7/30/17] So what’s wrong with banks and credit unions?
Bank accounts are considered a form of debt and can be a burden for people with limited savings and credit.
Credit unions charge fees to make sure their customers are paying their loans back.
The credit union that you sign up for is often a different one than the one you sign for, so you can end up paying for something you didn’t get because the bank didn’t charge you.
“I’m just like, ‘Oh, my God, how can they charge me fees for not having a bank account?'” said Johnson.
“It’s just such a mess.”
It’s not just that banks charge fees, either.
Credit card companies, payday lenders and other lenders often offer free credit checks.
The fact that a credit agency or lender charges you a fee to make a check doesn’t mean it’s a free check, said Julie Cottam, a consumer credit attorney in Atlanta.
Credit cards and other types of loans can have the ability to take you out of repayment, she added.
“The consumer has the right to make any payments they want, and they have the right, in the contract, to keep their principal,” she said.
“There’s no way to do a better job of communicating what those payments are going to be.”
What to do if your account is closed or not opened?
If your bank account has been closed and you’re still owing money, you’ll need to get your bank’s help.
If your bank has closed your account because you’ve not paid off your debt, you should get a statement from your lender.
A lender may be able to provide you with an extension or a copy of the loan agreement.
If your credit card has been suspended, it’s up to you to get the money back.
A few states have created programs to help people get their money back after a closed account has closed.
Many states offer free or low-interest loans, including state loans, state grants and grants from the federal government.
You can use the National Debt Relief Program to pay off a closed loan, and the U.S. Department of Education’s Student Loan Repayment Program can help people pay back loans you owe.