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Banking Relationships

Banking Relationships . $ Building Your Financial Future $. Establish a Banking Relationship . Why and does it really matter??. WHY BOTHER WITH A BANK?. Reason for Banks-

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Banking Relationships

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  1. Banking Relationships $Building Your Financial Future$ Middle Tennessee State University

  2. Establish a Banking Relationship Why and does it really matter?? Middle Tennessee State University

  3. WHY BOTHER WITH A BANK? Reason for Banks- Banks are the medium that enable individuals to enter and interact with the economy and market via personal and commercial transactions. Middle Tennessee State University

  4. Why Establish a Banking Relation? • Financial transactions that allow you and your money to interact with the global economy. • This affords you financial • Protection and security • Convenience • Opportunities Middle Tennessee State University

  5. WHAT DOES YOUR BANK DO ? • Checking • Savings • Loans • Financial advisement Middle Tennessee State University

  6. “I’m about to give you all my money….and all I ask is a little R-E-S-P-E-C-T.” The Banking relation is one built on trust and respect. So what do you want in a banking relationship? Middle Tennessee State University

  7. How to Establish that Relationship • Have an idea of what you want • Convenience ? • Service ? • Costs ? • Long term relation ? • “A free toaster” ? KEY POINT: SHOP AND COMPARE Middle Tennessee State University

  8. The First Step in the Relationship • Open an Account • Usually a checking or savings account Why? • Safe place to keep your money • Tools that help you establish and stick to a spending plan • Interest earning • Inexpensive way to cash and write checks • a way to establish a relationship with a financial institution. Middle Tennessee State University

  9. 7 Steps to follow in opening an account • Research your options • Gather personal information • Go to the bank of your choice • Complete necessary paperwork • Sign a signature card • Make an opening deposit (minimum) • Read the customer agreement and account material Middle Tennessee State University

  10. The Anatomy of a Check Middle Tennessee State University

  11. Reconciliation of your Account • Very important to maintain account balance and integrity • Reconcile often (at least monthly) • Tips • Keep a file for canceled checks and transactions • Enter transactions immediately- • Be detailed • Use a pencil- be neat Middle Tennessee State University

  12. Debit Cards • Banking cards used like a credit card for Point of Service transactions • Very convenient • Safe- (may be asked to show ID). • Drawn against balance in account. • Don’t forget to enter transaction into register. Middle Tennessee State University

  13. Debit Card Trend-What’s in Your Wallet? Number of Credit vs. Debit Card transactions 1999- 20.71 billion 69% Credit, 31% Debit 2004- 38.84 billion 49% Credit, 51% Debit 2009 (Projected)- 61.09 billion 42% Credit, 58% Debit Source: Newsday, November 13,2005- (Lexis-nexis.com) Middle Tennessee State University

  14. Check 21 • New legislation that allows Banks (financial institutions) to accept and use a digital copy of the check to transact the business instead of the original paper. SO WHAT? The transactions clear the bank faster--- Can cost YOU if funds are not available. Middle Tennessee State University

  15. Credit and Credit Cards Just the facts ma’m…. • Americans have Over 1.2 Billion cards • Outstanding balances $500 Billion • Every year almost 4 billion solicitations for credit cards • Average College student has 4 cards with an average of >$2700- (on top of student loans averaging $19,400). Middle Tennessee State University

  16. How is My Credit History Used? • Measurement of your Ability to pay your debt. • Who uses this information? • Future lenders • Future Employers • Future Landlords • Future Service Providers Middle Tennessee State University

  17. 5 C’s of Credit Are you creditworthy? • Character • Capacity • Capital • Collateral • Conditions Middle Tennessee State University

  18. Types of Credit • Revolving or Open Credit • Installment Credit • Non-installment Credit • Credit comes in two forms- • Secured • Unsecured Middle Tennessee State University

  19. Different Cards for Different Needs • Bank Credit cards (Visa & MasterCard) Premium or Prestige Cards, affinity cards, secured credit cards • Travel & Entertainment Cards (American Express, Diners Club) • Single Purpose Cards- (Gasoline Cards or store only) Middle Tennessee State University

  20. Smart Credit Tips • Manage your Credit WISELY-Remember credit commits future income. • BE DISCIPLINED! • Shop around-compare rates and features • Build a trustworthy relationship with creditors-financial future depends on it. Middle Tennessee State University

  21. Credit Resources Equifax PO Box 105873 Atlanta, GA 30348 800-685-1111 www. equifax.com Trans Union Corp. PO Box 390 Springfield, PA 19064-0390 800-916-8800 www. transunion.com Experian PO Box 2350 Chatsworth, CA 91313-2350 888-397-3742 www.experian.com www.fanniemaefoundation.org Middle Tennessee State University

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