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The author, Chris Boutté.
Chris Boutté
I used to just have one bank account out of convenience, but my research paid off when I opened more.I have one bank that I use for investing and one that I use for credit cards and high-yield savings.I’m confident I’ll know what I’m looking for if I ever need to move my money to a new bank.
For years, I never really cared nor paid much attention to which bank I used. Now that I take good care of my financial well-being, using the best banks is a major part of my financial planning.
It took me a while, but I learned how to make my banks work for me, and now I get the best deals while making some extra money simply for using my chosen banks.
Overdraft fees hit me hard
It took some time to learn everything I needed to know about choosing the right bank before I developed a process. First, I had to recognize what bad banks looked like.
Originally, I used Wells Fargo as my primary bank. Like many people, I chose what was the most convenient rather than taking the time to research and learn. I was regularly frustrated with Wells Fargo. I used to live paycheck to paycheck, and I was regularly racking up overdraft fees that were far more than the overdrafted amount.
Wells Fargo charges $35 per overdraft. This means that if I went to the gas station and bought a $1 drink and then bought a $5 fast food meal, those two transactions for $6 could cost me $75.
Then, the news broke that Wells Fargo was opening fraudulent accounts along with other shady practices, which resulted in a $3.7 billion settlement. And recently, it has been facing new accusations.
At the end of 2019, my grandfather passed away and left me a pretty decent inheritance, and I knew I didn’t want to keep that money in a Wells Fargo account. This is when I started doing some research.
I learned more about investing
My grandfather was able to leave his children and grandchildren money because he invested, so I decided to do the same after paying off my debt. After reading books on investing, I learned that Charles Schwab and Vanguard were two of the best online brokerages for beginners.
My inheritance was in the form of stocks, and I ended up choosing Charles Schwab because it had low fees and an easy-to-use platform for stock trading. Then I learned I could also open a checking account with the company for direct deposits for my paychecks.
Setting up direct deposit was very convenient, and I setup monthly transfers to move money into my investment accounts to buy stocks.
I started building my credit
Now that my debt was paid off, I also wanted to start building my credit. I knew nothing about building credit or wealth, but fortunately, I came across “I Will Teach You to Be Rich” by Ramit Sethi. This book taught me how to make my credit cards work for me and what to look for in credit cards.
I did a simple Google search for “best cash back credit cards,” and at the time Capital One had some of the best interest rates. Cash back credit cards allow you to earn money by using your card, and if you regularly pay off your balance, you have nothing to lose.
Originally, my credit score was in the low 500s, and I was only approved for a few hundred dollars. Now, three years later, my credit score is in the 740s, and I have three Capital One credit cards. Two of them have credit limits of $15,000, and each one gives me anywhere from 1% to 3% cash back.
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I found a good high-yield savings account
I also wanted to make money from my savings account, and Capital One has one of the best interest rates for high-yield savings accounts as well.
Since I’m a man of convenience, when I decided to refinance my car, I decided to do that through Capital One as well. I’ve been a great customer of theirs, so they offered me a low interest rate on my auto loan. Now I have my credit cards, savings account, and auto loan all in one place.
Finding the right banks is simple when you simply do some research to see who offers the most for using their services. It was also helpful to learn why banks offer cash back and savings interest rates. Aside from them using your money for their bank loans, they’re also hoping you don’t pay down your credit cards and get charged interest. Knowing this, I pay off my cards regularly to take full advantage of the benefits.
As for Wells Fargo, to be fully transparent, I never closed my account. I keep the minimum amount possible in my checking and savings account for convenience. Charles Schwab and Capital One don’t have physical banks, so I use it when I need to make big purchases that require cash.
I still see myself using Capital One and Charles Schwab as my primary banks for the foreseeable future. When I check the competition, they sometimes offer better rates, but these two have been fairly consistent with good rates and quality customer service. But if they ever pull a Wells Fargo, I have my process to find a new bank.
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