Get awesome insights on how to maximize your banking needs. For pertinent questions about how to make banking work for you, just ask Alex, our expert banker. Understand the differences between a bank and a credit union. Learn how to effectively use your debit card. Explore how to protect yourself against fraudulent bank calls.
Question: What is the difference between a bank and a credit union? – Raymond from Annapolis, Maryland
Answer: While both banks and credit unions are financial institutions that offer similar products and services (like checking and savings accounts, loans, credit cards and online banking), there are several differences between the two. The major one is that banks are for profit institutions that cater to the public while credit unions are non-profit and only offer their products and services to a select set of members. The requirements to join a credit union can be very strict (like being a teacher or part of the armed forces) or open to anyone who is willing to pay a membership fee. Because credit unions are non-profit, they generally offer lower rates on loans and higher yields on checking and savings accounts. On the other hand, banks are generally larger than credit unions. This enables them to offer a wider variety of products and services, including more branch locations and a larger staff.
Question: My debit card was declined because I exceeded my daily limit. How does that work? – Danielle from Portland, Oregon
Answer: Most debit cards have a daily limit. This is to protect the customer and financial institution from fraudulent transactions. If left unchecked, a compromised debit card can deplete all the funds in a customer’s checking account. Normally, the debit card will have both a daily spending limit and a daily cash withdrawal limit. The spending limit is for point of sale purchases like those that are processed online or at a retail store. The cash withdrawal limit is how much cash can be taken out of an ATM. Typically, the cash withdrawal limit will be lower than the spending limit. Check with your financial institution to see what the daily limits for their debit cards are. If necessary, most financial institutions will increase the daily limits on a debit card either for a temporary time period like 24 hours or permanently.
Question: I got a random phone call from my “bank” and I am worried it wasn’t real. What should I do if this happens again? – Jack from Dove Creek, Colorado
Answer: Beware of unsolicited phone calls from your financial institution. There has been a rise in telephone banking fraud. The perpetrator will pretend to be a legitimate institution like a bank to get sensitive information like account and debit card numbers, PINs, online banking passwords and social security numbers. The fraudster will use that information to empty their victim’s bank accounts. If you get a phone call from a person claiming to be your bank, do not give any information over the phone. Simply hang up the phone. Financial institutions will never call asking for confidential information. If you believe the call might be authentic, contact your local branch or bank’s customer service department to verify the validity.
Written by: Alex Sanchez
Important: For your specific questions about banking, contact your banking expert, Alex, at: alexexpertbanker@gmail.com
Alex is starting his 15th year in the banking industry. He has worked for such notable banks as Bank of America, US Bank, and Chase. Alex has his bachelor’s degree in Business Economic from the University of California Riverside.
