5 Ways Your Bank Can Help You Achieve Financial Stability — and 3 Services You Should Avoid

As you strive to meet your financial goals, having the right support is crucial. Certain services will boost your savings and keep you informed, but others can hold you back. Unfortunately, it’s not always easy to tell the difference.

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Your bank or credit union likely offers several financial services to grow your wealth. So how can you tell which ones are actually worthwhile? Here are five common bank services that can help you achieve financial stability, plus three you should avoid .

The Good: 5 Ways Your Bank Can Help You

As of 2021 (the last available data from the FDIC), a little over 95% of American households are banked, meaning someone in the household has a checking or savings account with a verified financial institution. That means the majority of Americans have access to free money management services.

Here are five simple ways your bank can help you achieve financial stability.

1. Financial Counseling

Many banks offer financial counseling and education to their customers. This might be in-person counseling at your local branch, virtual meetings, or resources available through your mobile banking app.

Even a quick counseling session can help improve your financial literacy. Research from Cambridge University shows that improved financial literacy has a lifelong impact on one’s financial behavior. It also shows that people with less financial literacy are often overconfident in their decisions, leading to poor investments and risky spending habits.

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2. Online Budgeting Tools

The majority of Americans today use mobile banking. Relying on your bank’s app or website, instead of exclusive in-person services, is convenient and safe and gives you access to a range of digital tools.

Many mobile banking apps offer easy-to-use digital budgeting tools, such as:

• Interactive charts
• Personalized budget categories
• Sub-accounts to save for different goals
• Customized budget calendars to track annual spending
• Upcoming payment alerts

3. Credit Card Balance Transfers

A balance transfer is the process of moving your outstanding debt from one credit card — or multiple — to a new card with a lower interest rate. Many banks offer balance transfers to help you pay off your debt faster.

The trick with balance transfer credit cards is that they typically offer a low introductory annual percentage rate, which goes up significantly after 18 to 24 months. Technically, this method can create more debt, but with the right planning and a strict repayment schedule, many borrowers pay off their balance within the low-interest period and save money in the long run.

4. Automatic Bill Pay

Another advantage of mobile banking is automatic bill pay. This service connects your account to your monthly bills and subscriptions and automatically transfers funds so you never miss a payment.

Autopay can help you avoid fees from missed payments. However, it also makes it easy to forget about subscriptions you may not need anymore and can lead to an overdraft, so you should use it with caution.

5. Low-Balance Alerts

Speaking of overdrawn accounts, low-balance alerts offer an easy way to avoid fees. Your bank will send you a notification anytime your balance gets too low so you know when you need to transfer funds. These alerts can also help limit your spending, as you’ll know when you’re reaching the end of your available monthly budget.

The Bad: 3 Banking Services To Avoid

Although most Americans have a bank account, many distrust the financial institutions they bank with. That widespread distrust could be due to predatory loans and unhelpful services — but that doesn’t mean you should pull all of your money out of your bank today. Just avoid these offers to keep your finances on track.

1. High-Interest Loans

High-interest debt can quickly derail your financial progress. Be cautious about high-interest loans offered by your bank, including home loans, auto loans and credit cards. When you need to take out a loan, shop around with other lenders to look for the best rate instead of just committing to your bank’s first offer.

2. Low-Yield Savings Accounts

If you keep all of your savings in a standard account offered by your bank, you might want to reconsider. Most traditional banks offer relatively low-yield accounts that won’t help your savings keep up with inflation. Consider opening a high-yield account with a fintech company or online credit union for better long-term growth.

3. Another Line of Credit (and Another, and Another…)

Remember, your bank earns money from each line of credit you open with it. While balance transfers can be helpful, take each offer for another loan or the latest credit card with a grain of salt. Too much debt is always a bad thing.

This article originally appeared on GOBankingRates.com : 5 Ways Your Bank Can Help You Achieve Financial Stability — and 3 Services You Should Avoid