If you owe outstanding money to another bank, a bank may choose not to offer any account to you. There are alternatives if you do not qualify for a savings account, but the solutions are only temporary and you should work to rectify your past mistakes so you can open a savings account and work up to opening a checking account.
Banks Can Deny Accounts
Banks do have the option to deny you services, which includes opening a savings or checking account. Banks have a system that reports to each other if you owe money on a closed account or if you have an account in bad standing at another bank. Typically a bank will not open any type of account to you if you currently owe another bank on an account that has been closed or if you have an account that is in bad standing. This is because you are a risk for the bank. If you do the same thing you h e at the other bank, they will lose money.
Correcting the Problem
To be able to open a savings account in the future you must pay off all money you owe to banks you previously had checking or savings accounts with. You can do this by contacting that bank and asking how much you need to pay to bring your account up to good standing. When you pay the amount off request a letter stating you have paid off all that you owe them, and that you are now considered in good standing. Some smaller community banks will use the letter as proof to allow you to open a savings account; other banks may still have you wait for a few months.
Coping without a Savings Account
It can be difficult to operate without a bank account, because it makes it difficult to do everything from cashing your paycheck to paying your bills. Until you have the money to clear up bad accounts you will need to operate on a cash basis. You can cash your paycheck at the issuing bank with two forms of identification. If the check is not from a local bank you may have to pay a fee at a bank in your area or you can cash the check at a grocery store or Wal-Mart for a fee. For bills you cannot pay in person you can buy money orders at a bank or the post office to send through the mail. These options do cost more money than having your own account.
Saving Money to Pay Off Bad Accounts
If you are paying extra money to get your checked cash and to purchase money order you may have a difficult time saving up enough money to clear up your accounts. It is not uncommon for the amount to be over $500. Set up a definite plan where you put as much money aside to pay towards the debt as you can each month. Your rent, utilities and food should come first, but it may be worth sacrificing in other areas to get the debt paid off as quickly as possible.
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