A checking account is a bank account that allows you to keep funds for your everyday use. The account allows you to access your finances 24/7. It is a convenient account to keep finances for things that can require expenditure anytime, such as food, transport, medical issues, etc. You do not have to keep cash in your house since banks and other financial institutions offer a safe place to keep your money. You will learn how to transfer money from checking account to credit card shortly.
There are various kinds of transactions that you can do with a checking account. They include sending and receiving finances, withdrawing money, paying bills, and writing checks. The accounts are suitable for business and personal usage. When you have a business checking account separate from your personal account, you can easily calculate your profits efficiently and pay taxes transparently.
It is interesting to note that you can open and maintain your account online using your smartphone, computer, or tablet. That way, you can access your money anytime and anywhere online. Initially, banks required people to access their accounts by visiting the nearest branch. However, with technological advancement, financial companies advanced to digital banking to accommodate the digital generation. However, they still offer physical office services to serve those who do not believe in online banking.
How do you open a bank account?
Opening a bank account is a straightforward activity once you have all you need. Most banks allow you to open checking account online in minutes, especially if opening online. You require the following items to open your account.
- Social Security Number
- An identification document
- An email address
- Phone number
- Physical address
Every financial company has to request all those details before opening an account for you to ensure that only genuine people open accounts. We have heard cases of people opening accounts to fund illegal activities such as terrorism, money laundering, and human trafficking, among other crimes.
When issues of terrorism escalated in the US, the federal government put it a compulsory undertaking for all financial companies to get the above details for all types of accounts. Remember that you can transfer money to someone else’s bank account with a bank account, which can help criminals transfer money to others without a trace.
Once you have everything with you, you can start the account opening process whereby you can open online or at a branch. When opening online, you will need to visit the website of the concerned bank or download their application where possible to open your account.
You will provide all the required details and upload documents where necessary. You need to fill out your details in an application form for a physical branch opening and submit it for approval.
How does a checking account work?
A checking account operates in a simple manner. Once you deposit money in your account, you can then start using the money in various ways. You can pay bills using your account by getting the account details of the concerned service provider. You can even set up an automatic bill payment to avoid wasting time initiating a manual payment.
Also, you can use your account to pay for goods and services at various outlets. If you do not belong to the same branch as the merchant, you only need their account details, such as their account and routing number. If their bank account is from the same branch as yours, you only need their account number, and you are good to go.
Also, you can send money with a checking account number instantly to others in your branch. However, you need both the routing and account numbers when sending money to accounts in other branches or banks. The funds may take several days to reflect in the receiving account.
Moreover, the checking accounts allow you to write checks. You need a checkbook from your bank and can then write checks to pay others. Checks are among the essential features of checking accounts. The beneficiaries of the checks can deposit or cash them out in their bank accounts.
How to transfer money from checking account to credit card?
A credit card is a payment card that allows you to borrow finances from your card issuer. Once you get the card, you can use it for various transactions such as paying for goods and services and withdrawing finances at an ATM, among other uses.
However, credit cards do not accept deposits like bank accounts. If you want to transfer money to a credit card, you can do so by paying your credit card bill. Once you use your card, bills accrue over time, and you have to repay them at the end of every billing cycle. A checking account allows you to pay such bills.
Another way that may appear that you are transferring money to a credit card is when you are depositing security money for your secured credit card. The funds remain in your card account until you attain substantial scores to qualify for better cards.
How do you send money from your checking account to accounts in other banks?
You can transfer finances from your checking account to other banks, as I mentioned earlier. To accomplish the mission, you have to send money with the account and routing number of the receiving account. The funds can take 1-5 days to reflect in the receiving account.
There are two methods you can use to transfer finances to your account. They include;
- Wire transfer
- ACH transfer
Wire transfer is applicable when sending large amounts of money to the receiving account. Again, the method is fast as the sending and receiving of financial companies communicate to each other to facilitate the transfer. However, you have to be careful when sending money using the method. You cannot reverse the transaction once you hit the send button.
Another reliable method to use when sending finances to other banks is the ACH money transfer. Unlike wire transfers, whereby the sending and receiving institutions directly communicate, ACH transfers involve a third party called the Automated Clearing House.
That is why the transfers are known as ACH. Therefore, the funds move from the sending financial company to the ACH clearing house and the receiving bank account.
How do you get a credit card?
We have seen what a credit card is and how you can send money to credit card accounts. Moreover, there is a need to know how you can get the card so that when the need arises, you can apply for one from the relevant financial company. There are two types of credit cards that differ in how you can get them. We have secured and unsecured credit cards.
When getting a secured credit card, you must deposit funds to act as security. The deposit amount determines your credit limit, whereby the more you deposit, the more your credit limit. Anyone can get a secured card if they have the deposit amount and the necessary application documents.
The secured credit cards are for building credit. If you have bad scores or do not have scores whatsoever, you can use the card to build your scores. If you use your card well, you can increase your scores within six months.
Unsecured credit cards require credit scores to acquire them. We have unsecured credit cards for all scores, including bad, fair, good, and excellent scores. However, very few financial companies issue credit cards for bad credit because of the risks involved. You get high score limit credit cards with low-interest rates if you have high scores. Bad credit cards have low borrowing limits and high-interest rates.
Must you have a checking account to get a credit card?
Most credit card issuers require you to have a checking account before getting a credit card. If you do not have one, you will be forced to open an account with them. The secured credit cards require an account to lock your security deposit. However, some financial companies do not require you to have accounts with them to give you a credit card.
Are credit cards different from debit cards?
Debit and credit cards differ from each other significantly. Debit cards allow you to use your checking account balance. Even though they are all payment cards that you can use to pay for goods and services, they differ in the following ways.
- Credit cards charge interest, while debit cards do not.
- Credit cards require credit scores to get them, while debit cards require a checking account.
- You can use a credit card to borrow money from your issuer, while debit cards only allow you to use what is in your account.
- Credit card issuers report to the credit bureaus, while debit card issuers do not report anywhere.
A checking account helps you to keep money for your daily uses. You can deposit money to buy food, transport, and other issues requiring immediate financial intervention. There are various kinds of transactions that you can do with a checking account.
They include buying goods and services, sending money to others, and paying bills. You cannot transfer money from a checking account since the cards do not accept direct deposits.