BankingBanking

Beware of these high cost Beware of these high cost “financial services”!“financial services”!

Pawn ShopsPawn Shops

charge very high interest for charge very high interest for loans based on the value of loans based on the value of tangible assets (such as tangible assets (such as jewelry or other valuable jewelry or other valuable items).items).

Rent-to-own ProgramsRent-to-own Programs

offer an opportunity to obtain home offer an opportunity to obtain home entertainment systems or entertainment systems or appliances for a small weekly fee.appliances for a small weekly fee.

However, the amount paid for the However, the amount paid for the item usually far exceeds the cost item usually far exceeds the cost if the item were bought on credit.if the item were bought on credit.

Check Cashing OutletsCheck Cashing Outlets

charge high fees (sometimes 2 charge high fees (sometimes 2 or 3 percent) just to have a or 3 percent) just to have a paycheck or government paycheck or government check cashed.check cashed.

Rapid-refund Tax ServicesRapid-refund Tax Services

provide “instant refunds” when provide “instant refunds” when you pay to have your federal you pay to have your federal tax return prepared. tax return prepared.

However, this “instant refund” is However, this “instant refund” is a loan with interest rates as a loan with interest rates as high as 120 percent.high as 120 percent.

Check Deferral ServicesCheck Deferral Services

allow consumers to get a cash allow consumers to get a cash advance on their next paycheck.advance on their next paycheck.

However, these short-term loans are However, these short-term loans are very expensive. A $200, two-week very expensive. A $200, two-week advance may cost over $30 (with advance may cost over $30 (with annual costs exceeding $900).annual costs exceeding $900).

Location Location FeesFeesOther charges Other charges InterestInterestRestrictionsRestrictionsSpecial featuresSpecial features

Comparing Checking AccountsComparing Checking Accounts

Opening an AccountOpening an Account

Making a DepositMaking a Deposit

Endorsing ChecksEndorsing Checks

Blank Endorsement-Blank Endorsement- Anyone can cash it! Anyone can cash it!

Restrictive Endorsement- Restrictive Endorsement- More secure!More secure!

Special (full) endorsement –Special (full) endorsement –Transfer the check to new personTransfer the check to new person

Writing a CheckWriting a Check

Keeping your Balance CurrentKeeping your Balance Current

Deducting ChecksDeducting Checks

ATM WithdrawalsATM Withdrawals

Check CardsCheck Cards

Reading a Bank StatementReading a Bank Statement

Balancing Your CheckbookBalancing Your Checkbook

step 1: step 1: Obtain the current balance from your bank Obtain the current balance from your bank statement.statement.

step 2: step 2: Add any deposits that you have recorded Add any deposits that you have recorded in your check register but that are not on this in your check register but that are not on this statement.statement.

step 3: step 3: Subtract any outstanding checks (checks Subtract any outstanding checks (checks you have written but that have not yet cleared you have written but that have not yet cleared the banking system).the banking system).

step 4: step 4: Compare the result with the current Compare the result with the current balance in your check register.balance in your check register.

Note:Note:The balance in your check register should be The balance in your check register should be

adjusted to include: (a) deductions for service adjusted to include: (a) deductions for service fees or other charges; (b) additions for direct fees or other charges; (b) additions for direct deposits and interest earned.deposits and interest earned.

Electronic Banking ServicesElectronic Banking Services

direct deposit…direct deposit…

earnings (or government earnings (or government payments) automatically payments) automatically deposited into bank accounts, deposited into bank accounts, saving time, effort, and money.saving time, effort, and money.

automatic payments…automatic payments…

utility companies, loan utility companies, loan payments, and other payments, and other businesses use an automatic businesses use an automatic payment system with bills paid payment system with bills paid through direct withdrawal from through direct withdrawal from a bank account.a bank account.

automatic teller machines…automatic teller machines…

allow customers to obtain cash allow customers to obtain cash and conduct banking and conduct banking transactions; some ATMs sell transactions; some ATMs sell bus passes, postage stamps, bus passes, postage stamps, gift certificates, and mutual gift certificates, and mutual funds.funds.

point-of-sale transactions…point-of-sale transactions…

acceptance of ATM/check cards acceptance of ATM/check cards at retail stores and restaurants at retail stores and restaurants for payment of goods and for payment of goods and services.services.

stored-value cards…stored-value cards…

prepaid cards for telephone prepaid cards for telephone service, transit fares, highway service, transit fares, highway tolls, laundry service, library tolls, laundry service, library fees, and school lunches.fees, and school lunches.

electronic cash…electronic cash…

companies are developing companies are developing electronic replicas of all electronic replicas of all existing payment systems—existing payment systems—cash, check, credit cards, and cash, check, credit cards, and coins.coins.

cyberbanking…cyberbanking…

banking through online services. banking through online services. Banks with Web site “cyber” Banks with Web site “cyber” branches allow customers to branches allow customers to check balances, pay bills, check balances, pay bills, transfer funds, compare transfer funds, compare savings plans, and apply for savings plans, and apply for loans on the Internet.loans on the Internet.

smart cards…smart cards…

sometimes called “electronic wallets,” look like sometimes called “electronic wallets,” look like ATM cards; however, they also include a ATM cards; however, they also include a microchip.microchip.

• This minicomputer stores prepaid amounts for This minicomputer stores prepaid amounts for buying goods and services.buying goods and services.

• A smart card can also store data about a A smart card can also store data about a person’s account balances, transaction records, person’s account balances, transaction records, insurance information, and medical history.insurance information, and medical history.

• Uses for smart cards may expand in the future.Uses for smart cards may expand in the future.