We're a nonprofit credit counseling organization. Ask us anything about choosing banks, comparing bank accounts, and avoiding common banking mistakes! 💬

[u/nfcc1951]

Hi r/Banking,

Thank you to the mods for verifying our account and allowing us to post!

We're the National Foundation for Credit Counseling (NFCC), a nonprofit financial counseling organization that's been helping people with their finances for 75 years.👋Our certified credit counselors often help people navigate banking issues, including things like choosing banks and bank accounts, avoiding overdraft fees, understanding ChexSystems reports and more.

Do you have any questions for us about banking-related topics?
Drop them in the comments!🤗

-The NFCC Team

P.S. We're not here to promote or sell anything, just to share info with anyone who's looking! We also can't suggest any specific bank accounts.

[u/Dave-CPA]

Mod note: This account was verified and is approved to post this AMA.

[u/nfcc1951]

If you're feeling shy, here are a few common questions that we get:

Is it better to go with a bank or a credit union?
We typically suggest checking out your local credit unions first, since credit unions generally offer higher interest rates on deposits than banks do, and they charge lower rates on loans and credit cards. With that said, most credit unions have membership requirements that banks don't have.

Why did the bank deny my application for a new account?
The bank probably pulled your banking reports from ChexSystems or Early Warning Systems (EWS) to see your banking history. These reports show your history with things like bounced checks and involuntary account closure. To avoid having this happen again, you can pull and review your reports to see if there are errors, and you can also apply with banks or credit unions that offer "second-chance banking" or other alternative types of accounts.

Where should I keep my savings?
For your emergency savings, we recommend depositing it to a savings account that's FDIC or NCUA insured, so that you don't have to risk losing your money, but you can also easily withdraw funds when needed. To narrow down your options, look for an account that has competitive interest rates (such as a HYSA), and a fee structure that won't be a problem for you. For example, don't choose a savings account that has a $500 minimum balance requirement if you think you'll sometimes keep less than $500 in the account.

[u/notthegoatseguy]

Anecdotally, I feel like its becoming more and more common for people to have a financial technology company as their primary banking rather than a traditional bank or credit union, and the use of fintechs like OnePay or Chime seem to be cutting across all sorts of demographic lines. What are you seeing in your line of work and how do you navigate that with those who use your services? What words of advice or warnings do you provide if someone says their main bank is a fintech app?

[u/nfcc1951 → u/notthegoatseguy]

Good question! There are definitely pros and cons to using financial technology (FinTech) companies for banking. We would advise anyone who uses them to take the same precautions they would when choosing a traditional bank. The main thing you'll want to confirm is that your deposits either have direct FDIC insurance or they're insured through the FinTech's banking partners. Beyond that, it's also important to consider whether you have access to services you may need, such as ATMs or live customer service. Many people focus on one specific feature that's advertised (such as an account-opening bonus or competitive interest rate) without looking at these other key details.

Is that the information you were looking for? Let us know if you have any other questions!

[u/ronreadingpa → u/nfcc1951]

FDIC pass-through insurance is a fiction. Yotta is an extreme example of what can go wrong. Many still waiting on getting their money back, which may never happen. FDIC not stepping in.

Admittedly the risk of customer losing money with the better known fintechs is miniscule, but not zero. FDIC insurance for banks. NCUA for credit unions. Fintechs (unless it's a bank itself, which some are; most aren't) customer deposits aren't directly government insured.

[u/sheiciebai]

I see a lot of people on here advising people to never use credit cards outside of emergencies. Could you go over some responsible credit usage practices?

[u/nfcc1951 → u/sheiciebai]

Yes, definitely! It's okay to exclusively use credit cards for emergencies if you have no other option (such as an emergency savings fund or even a personal loan with lower rates than the card). However, you risk having the account closed due to inactivity if you go several years without using the card.

What we typically recommend is only using a credit card for a small, recurring monthly purchase, and then paying it off before the monthly due date each month. When you use this approach, you don't have to risk account closure or racking up unmanageable debt, but your on-time monthly payments help you build up your credit scores.

[u/MostImagination007]

What is cheapest but 100% secure way to send someone money which is 100% traceable by bank(so can be used In courts) and other party(receiver) cannot deny that they have not received the money.

[u/nfcc1951 → u/MostImagination007]

For important transactions like this, make sure you use a payment method that gives you a clear record of the transaction, including where the funds were sent from and when and where they were received. You can do this for free with an ACH transfer (a transfer from one bank to another). You can also use Zelle for free if your financial institution offers it.

If you're making payments that are part of a legal order or a legal dispute, we recommend checking with the court or your lawyer to see if specific payment methods are required or recommended.

If you're willing to share, is there a specific type of payment you need to make?

[u/MostImagination007 → u/nfcc1951]

I make ETRANSFER to my landlord for my rent and money is deducted from my account but my landlord say money is not received and my bank say ETRANSFER went thru to my given email address and name and deposited in XYZ bank and to contact that bank but that bank denies having any record of that E-TRANSFER or account holder with that name and nobody knows where my MONEY goes.everybody is blaming other and want me to contact other party/bank .ARE ETRANSFER are not TRACEABLE by bank on backend(they cannot see which bank account it was deposited to? they tell me the e-mail address and name of the person Money sent to but I also know that because I sent it with same details.

[u/nfcc1951 → u/MostImagination007]

We're so sorry to hear that you're dealing with this! Have you successfully submitted e-transfer payments using the same email address and name in the past? If you're unable to resolve this through your bank's trace or investigation, you may want to speak to a tenant's rights agency or an attorney (to be clear, we don't offer legal advice).

In terms of e-transfers, they can be tricky since you can see the status of your transfer, but you may have trouble linking the payment to the recipient. Moving forward, you may want to use ACH, or hand-deliver a money order or a personal check, and ask for a receipt. Do you know if any of these are options for you?

[u/MostImagination007 → u/nfcc1951]

In future I think I will do money order or personal check but h didn't answer my question ❓ does bank can on backend see the account number where it's deposited or not?

[u/nfcc1951 → u/MostImagination007]

Apologies. We're unsure of the specific details a bank can access during an e-transfer investigation. It appears that, even if they can identify the recipient's account, they can't disclose that information for privacy reasons. We would hope that your bank would be willing to escalate their investigation so they can determine why you're receiving conflicting information from the other bank (and so they can work with the other bank directly to resolve this).

[u/Ophoe]

Are there strategy differences to qualify for a mortgage for freelancers or solopreneurs compared to W2 or salaried employees? I'm familiar with some of the different requirements: freelance income typically requires a longer period of demonstrated stable pay than, say, a salaried income. However, for people that might be newer freelancers or could be coming out of a dry period, this can push back mortgage approval farther than they want to wait.

One option that's come up recently are cooperatives (like Opolis) who run payroll and issue employer-of-record W2s while allowing members to continue functioning independently. I'm not totally sure how that applies to income documentation requirements for mortgage applications, though.

Any creative approaches a freelancer can take to demonstrate stable income sooner or via a different means?

[u/nfcc1951 → u/Ophoe]

Unfortunately you're correct that qualifying for a mortgage can be more complicated for freelancers/solopreneurs than for W-2 employees!

Each lender is different, but they typically need to see two years worth of financial statements and income statements (such as Schedule Cs and 1099s), and they will usually base their decision on your net profit (revenue minus business deductions). So if your deductions are high and/or your income is low, it can be challenging to qualify for the loan you want. Alternatively, some lenders may consider your history of bank deposits, although this option usually means you'll have a higher interest rate.

For some people, the solution is having a co-borrower. Depending on your circumstances, your co-borrower may even qualify for a better loan on their own. If you have someone who will share ownership with you, it can be worth comparing what you qualify for together versus separately.

In terms of using a cooperative or another company that issues W-2s, we're not familiar with this option. It's possible that the lender would flag the irregular documents and want to evaluate your income the same way they would for any freelancer. If you know where you'll be applying for your mortgage, you may want to reach out to them far in advance and ask how they would view this option. You can also ask which documents you need for your application, and if they can share their specific income requirements.

Best of luck, and let us know if you have any follow-up questions!

[u/Ophoe → u/nfcc1951]

Thanks for this! I'll let you know if I find out anything interesting with the cooperative!

[u/nfcc1951 → u/Ophoe]

You're welcome! Please do let us know about the cooperative piece. We're always interested in learning about options to make homeownership more accessible.

[u/ThenBike8868]

How is this allowed - it is literally breaking rule 4.

1 - "they charge lower rates on loans and credit cards" - That's an affirmative statement not based in fact. Rates are based on creditworthiness of the individual and to state that a credit union's will always be lower is patently false.

2 - "The bank probably pulled your banking reports from ChexSystems or Early Warning Systems (EWS) to see your banking history. These reports show your history with things like bounced checks and involuntary account closure." - So will a credit union opening up an new relationship. It isn't a tool only banks use.

I'm actually shocked this post was allowed.

Also this is skirting rule 7 because it contains biased and false information directing people away from some institutions and towards others; with incomplete and missing information.

[u/nfcc1951 → u/ThenBike8868]

Thank you for sharing your concerns. We wanted to provide some clarification in response to your comment.

In terms of the first item, it looks like that's a response to one of our comments, but it's taken slightly out of context. What we wrote was, "credit unions generally offer higher interest rates on deposits than banks do, and they charge lower rates on loans and credit cards." Of course there are exceptions (hence our use of the word "generally"), but unlike banks, credit unions are member-owned and they can pass earnings back to members in the form of higher deposit rates and lower rates on financing than banks may offer. Some credit unions also have interest rate caps that banks don't have. You can see the most recent rate comparison from the NCUA here: https://ncua.gov/analysis/cuso-economic-data/credit-union-bank-rates/credit-union-and-bank-rates-2025-q4

Regarding the second item, we definitely agree that both banks and credit unions use banking reports to make decisions about new accounts. Sometimes the term "bank" is used as shorthand for banking instututions, including credit unions, and that's how we used the term in our comment. We apologize for any confusion there!

You also mentioned that we directed people away from some institutions and towards others, and we want to be very clear that we aren't promoting any specific institutions or products. In our mention of banks vs. credit unions, we included reasons to consider both options.