Beware Of Cash!

enelrad1123 | Aug 16, 2018 | 75 posts since 2017

I was raised with the advice "if you can't pay cash for it, don't buy it", so I've never used credit cards. I was just denied opening an online savings account with Northfield Bank due to insufficient credit history. I understand credit history being a relevant factor in determining whether a customer is approved for a loan, but denying a deposit account for this reason is ridiculous. I wanted to deposit cash, not borrow it!

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darkdreamer4u | Aug 16, 2018 | 350 posts since 2010

Now you know - start using a credit card (and pay it off every month while collecting cash back rewards) to build your credit history - it's not that hard!

Bozo | Aug 16, 2018 | 1,375 posts since 2011

Establishing a credit history (and, thus, a credit score) can be daunting when just starting out. Back some 45 years ago, here's what we did. Find a bank or credit union which will issue you a "secured" credit card. You deposit (in cash) a certain amount (say $1000) in a savings account. The bank issues you a secured credit card with a balance cap of 50% of your savings deposit. You use the card, paying off the balance each month. After a specified period of time, you should be eligible to graduate to a regular credit card. Over time, your limit on the card will no doubt be increased, and your credit history will be established.

Robb | Aug 17, 2018 | 324 posts since 2018

@Enelrad1123 I've never had to borrow or needed to deal with a credit card thus little in the way of credit history but that has only had a seemingly minimal impact on applying to credit unions as long as I stress I am only interested in depositing money not borrowing. So far I've had success opening accounts at 3 of the 4 that I have applied for the past year. I have not dealt with Northfield bank but that is currently one of the better savings rates out there. Good luck!

Ally6770 | Aug 18, 2018 | 4,307 posts since 2010

We had one auto loan that my husband had in 1959 before we were married and never had one again. We have never borrowed except on our first and second home. We had a credit card when it was required to get a free checking account in the 60's. We never borrowed on that credit card. I use them now for cash back and as another receipt of something that I have purchased for warranties etc.
This credit card will double warranties when used to pay for things. (Not autos).
I have never heard of being denied a savings account while working in a bank for 30 years but I retired nearly 10 years ago. Things change. I have heard of people being turned down for a checking account. Try another credit union. How do you get auto insurance, get an account for utilities for a home or apartment etc.?

enelrad1123 | Aug 23, 2018 | 75 posts since 2017

UPDATE - I received a call from Northfield August 22, inviting me to submit my application again. The CSR told me they had eliminated the credit check for this deposit account. I just completed the online application and it was quick and easy. The account is open, just waiting for the micro deposits and then the account can be funded. Hats off to Northfield for realizing the error of their ways and reaching out to me with a personal phone call.

racecar | Oct 13, 2018 | 628 posts since 2014

Sadly, the truth of the matter is, banks make money by loaning money OUT to people. They "lose" money by having people deposit money with them (and thus have to pay them interest). To a bank, having people deposit money (and having to give them interest) is a necessary evil in order to have the funds to loan others money (what they really want to do). So even if you want to just join a credit union, they'll all do credit checks (and most will do a hard pull). I know it doesn't make sense to do just to "join" or open a savings-only account but that's the way the world is now.

I'm glad to see they got back to you and let you open up the account without the credit check, but sadly, doing the credit check (and usually a hard pull) is the norm now everywhere, to the point where people don't question it, and simply figure it MUST be done. Glad it worked out for you in the end.

Cracker | Oct 31, 2018 | 9 posts since 2013

You should try establishing a credit score. Get one credit card, use it, and pay it off each month. Not having a credit score will cause you to pay more for car insurance. Insurance companies look at your credit score and people with low or no credit scores will be charged higher rates than people with an excellent credit score.

taeham | Jan 24, 2019 | 6 posts since 2019

I'm surprised a bank would decline to open a savings account. Try other banks e.g. Ally and see if you get approved.

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