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Choosing Financial Products and Services

Learning about financial products and services and how they work can help you better manage your money, improve your credit scores, and save for your goals.

Finding financial products and services

Before you select a financial product or service, you should first understand what each offers and how it can help you achieve your goals.

The financial products you pick can help you accomplish different goals.

They may help you build savings or improve your credit history.

Some make it easier to access your paycheck, while others help turn your paycheck into cash.

Thinking about what you want to accomplish can help you narrow down the choices of products that fit your needs.

What to do

Think about your financial goal.

Review the products that can best help you achieve that goal.

Read about the products and services you’re interested in to learn more about how they work and where you can get them.

goal

PRODUCTS TO CONSIDER

I want a secure place to keep my money.

Certificate of deposit (CD)
Checking account
Prepaid card
Savings account

I want to make purchases without having to carry cash or go into debt.

Checking account (with linked debit card)
Prepaid card

I want a low-cost and easy way to pay and manage my bills.

Bill payment service
Checking account
Money order
Prepaid card

I want to pay my bills online or from my mobile device.

Bill payment service
Checking account
Prepaid card

I want access to online or mobile banking (to do things like check my balance online or deposit a check using my phone

Checking account
Prepaid card

I want my paycheck deposited directly into an account I can access.

Checking account
Payroll card
Prepaid card
Savings account

I want to turn my paycheck into cash.

Check cashing service
Checking account
Payroll card
Prepaid card

I want to build up savings.

Certificate of deposit (CD)
Prepaid card (with savings wallet feature)
Savings account

I want to save for education and training for myself or my child.

529 Plan

I want to get a small loan quickly.

Credit card

I want to build my credit history.

Auto loan
Credit builder loan
Credit card
Mortgage
Secured credit card

I want to send money to someone.

Money or wire transfer service
Peer-to-peer transfer service

Review details of the products and services that you’re considering.

Learn about how each works and where they’re offered.

Consider this option if you want...

How it works

Where it’s offered

502 Plan

To save for
education and training
costs for you or your
child

Savings plan that goes into
an investment account with
special tax benefits

Can be used to pay for
qualified educational or
training expenses for yourself
or dependent children

If used for other purposes,
may pay income tax and
penalty fees on money

Financial investment firm From your state’s program (find your state’s contact information at plans. college savings.org/ viewstate. aspx)

 

 

Auto loan

To build a credit history

Borrow money to buy a new or used car or truck

Repay monthly over set period of time (loan term)

Loan is secured by the car or truck as collateral, so if you default on the loan your car or truck could be repossessed

Bank or credit union

Car dealer

 

Auto title loan

To get small loans quickly

Borrow money for a short term and give up the title to your car or truck until you repay it

Often loan amount is for 25 to 50 percent of the car’s total value

Can be repaid in installments or all at once

If you’re unable to pay, lender can repossess your car and sell it

Online lender

Title loan company

Bill payment services

A low-cost, easy way to pay and manage bills

 

Pay your bill online through a service (from your bank’s website, for example) or in person (at a location like a grocery store or large retail store) instead of mailing directly to the company

Offered as a feature of certain financial products to help you pay your bills

Bank or credit union

Check cashing store

Grocery, retail, or other store

Online provider

Prepaid card

 

Certificate of deposit (CD)

A secure place to keep money

To build savings

Deposit a fixed amount of money for a specific length of time (for example, $50 for one year)

Can withdraw that money after the time is up

Pay penalty to withdraw your money early (fee varies and could be more than interest already earned, meaning you could lose money)

Bank or credit union

 

Check cashing service

To turn your paycheck into cash

 

Receive cash for your paycheck without first depositing it into an account Often charged a fee Don’t have to have a checking account

 

Bank or credit union

Check cashing store

Grocery, retail, or other store

 

Checking account

A secure place to keep money

To make purchases without carrying cash or going into debt (with a debit card)

A low-cost, easy way to pay and manage bills

 To bank online or from your mobile device

To have your paycheck directly deposited

Deposit or withdraw money from your account at a branch or at an ATM using your debit card

Pay for things by writing checks or using a debit card

Keep track of your balance to avoid overdraft fees or bounced checks with fees when there isn’t enough money to cover payments or withdrawals

Usually includes access to mobile and online banking and bill payment services

Deposits are insured in case your bank fails

You have federal rights if money is lost electronically through error or theft

 

Bank or credit union

Credit builder loan

To build a credit history

A loan (usually small) that you repay before you get access to the loan amount

Establishes a good payment history that can improve your credit scores

Bank or credit union

Nonprofit organization

Credit card

To get small loans quickly

To build a credit history

 

Borrow money up to an approved credit limit amount

Pay at least the monthly minimum until the balance is repaid

Charged interest if you don’t pay your balance in full each month and other fees if your payment is late

May charge an annual fee

 

Credit card company

Large gas station chain (gas credit card)

Large retail store (store credit card)

 

Money order

A low-cost, easy way to pay and manage bills

 

Like a check, except you pay for the full amount of the money order (plus any fees) upfront when you get it

No checking account needed

Usually available only in smaller amounts (up to $1,000)

Used to guarantee a payment to a person or company since it can’t bounce like a check might because it’s already been “funded” during the initial purchase

Can be cancelled or reissued if it gets lost or stolen

Can be harder to prove payment, since there isn’t a bank record that it was cashed (like a check would have)

 

Bank or credit union

Check cashing store

U.S. Postal Service

 

Money or wire transfer service

To send money to someone else

 

Use a service to send money to another person or place

Often charged a fee

Depending on which service you use, delivery method can be to the person’s bank account, mobile phone, or cash from a participating location

Depending on which service you use, pay for it with cash, credit card, debit card, prepaid card, or from your bank account

 

Bank or credit union

Check cashing store

Grocery, retail, or other store

Online provider

 

Mortgage

To buy a house

 

Borrow money to buy or build a house

Repay monthly over set period of time (loan term)

Loan is secured by the house as collateral, so if you default on the loan your house could go into foreclosure

 

Bank or credit union

Mortgage broker

Online lender

 

Pawn loan

To get small loans quickly

 

Paid cash in exchange for an item that the pawn shop keeps (like jewelry or electronics) during the loan

Loan amount is often much less than actual value of item If loan isn’t paid back as agreed, shop can sell the item to cover the debt

 

Pawn shop

 

Payroll card

To have your paycheck directly deposited

 

Employer loads your salary or wages onto a prearranged prepaid card where you can access the funds

Can use like a prepaid or debit card and accepted at most merchants

May have service fees or inactivity fees Has full consumer protections in case of electronic error or theft

Employer must provide you at least one other way to receive your salary or wages

 

Employer, working with a financial institution that provides the card

 

Prepaid card

A secure place to keep money

To make purchases without carrying cash or going into debt

An easy way to pay and manage bills

To pay bills online or from your mobile device

To bank online or from your mobile device

To have your paycheck directly deposited

To set aside funds for specific purposes

 

Access money you’ve paid or loaded in advance that’s stored on a card

Accepted at most merchants

Some let you take out money from an ATM or reload money onto the card (often charging a monthly maintenance fee or usage fee)

Some provide separate savings wallet feature that allow you to save for your goals

Funds may be insured in case the bank that offers the card fails

You may have rights if money is lost electronically through error or theft

Bank or credit union

Check cashing store Grocery, retail, or other store

Online provider

Savings account

A secure place to keep money

To have your paycheck directly deposited

To build savings

 

Deposit and withdraw money from your account when you want

Earns interest

Build up money for savings or emergencies

Not intended for frequent transactions

Deposits are insured in case your bank fails

You have federal rights if money is lost or stolen electronically through error or theft

 

Bank or credit union

 

Secured credit card

To build a credit history

 

Borrow money up to an amount that’s backed by a deposit you’ve already paid

Charged interest if you don’t pay your balance in full each month and late fees if you miss a payment

Many charge an annual fee Accepted at the same merchants as other credit cards

 

Bank or credit union

Credit card company

 

Comparing financial service providers.

Compare different financial service providers so you can choose the one that works best for you.

The financial marketplace is very competitive.

Once you’ve decided what kind of financial product or service you need, you’ll likely have to choose between different companies that provide it.

When possible, talk to more than one provider and shop around until you find the one that best meets your needs.

This could mean it’s the one closest to your home or workplace, the one that offers the lowest fees, or a combination of many different factors.

Getting answers to common questions about things like fees, services, and convenience from several companies can help you choose the best option for you.