Better Money Moves
April 16, 2021

Bye Bye Bye: How Branch Can Help You Leave Bad Banking Practices in the Past

Kayla Dostal
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While US banking continues to evolve and become more efficient, many outdated banking and other financial practices of the past still remain intact. They're causing headaches and unnecessary fees for consumers. And here at Branch, we ask, why be another player in their game? There are so many great solutions and options out there that you don’t need to settle with these old, unnecessary processes.

So we’re breaking down the top outdated financial practices that still exist today and how to get 'nsync with modern financial solutions like Branch for cheaper, more convenient alternatives.

Financial Practice of the Past #1: Money Orders

A money order is a paper form of payment, similar to a check.  But what makes it different is that it's a guaranteed form of payment  because it’s been purchased with cash or another form of payment ahead of time. Money orders are secure because they contain the name of the recipient and the financial institution that administers it, making it harder for others to steal. 

Issues with Money Orders:

  • It costs money: Money orders can cost anywhere from $1-5 each time you request one.
  • It’s inconvenient: Money orders must be purchased in person.
  • It has limits: Most financial institutions have a purchase limit on money orders of $1000. If you need a money of order of more than $1000, you’ll have to purchase multiple money orders and pay a fee for each one.
  • It’s commonly used for scams: Fraudsters often send bogus money orders and ask for a portion of the money back before the victim realizes the money order is fraudulent. 

Why Use Branch Instead of Money Orders:

The biggest reason you may still be using money orders is because you don’t have a checking account and need to pay for larger bills like rent. Luckily for you, your Branch Digital Wallet is a checking account. We’ve broken down 4 ways you can bill your rent and other big bills using your Branch account. All of these methods provide secure and fee-free options (and no visit to a physical bank required!) to pay for your rent and other big bills. 

Financial Practice of the Past #2: Check Cashing 

Check cashing is the ability to receive cash for a check without a bank account. These services are offered by places like Walmart, payday loan lenders, and other financial service centers and allow those who use them to access their pay almost instantly. 

Issues with Check Cashing: 

  • Fees are extremely high: Depending on where you go to cash your check, you can pay anywhere from $4 to $45 just to receive your hard-earned money.
  • You have to go to a physical location: In order to receive your money, you’ll have to go to a physical location that offers the service. 

Why Use Branch Instead of Check Cashing: 

Cut out paper checks from your life altogether - the most convenient and fastest way to receive your pay is through direct deposit, which is the electronic transfer of money directly into your Branch account. What’s even better at Branch is that you can also receive your entire paycheck up to 2 days early, because we don’t hold your funds like traditional banks. Receiving your paycheck through direct deposit is completely fee-free. 

If you need to cash a check, however, Branch has an option for you as well. We’ve partnered with Ingo, giving you the ability to deposit money from a paper check directly into your Branch account. The best part? You can do it from the comfort of your home directly through your Branch app. Simply click the “Add Funds” and “Check deposit” buttons in the Wallet tab. Please note that there may be a small fee associated with check depositing. 

Financial Practice of the Past #3: Payday Loans 

Payday loans are short-term and high cost loans, usually topping out at $500, that are due on the customer’s next payday. These loans can be administered through cash, check or electronically deposited into a bank account. Similarly, to repay the loan, customers can write a check for the balance plus fees incurred or provide the lender with authorization to electronically pull the funds from a bank, credit union, or prepaid card. 

Issues with Payday Loans: 

  • They’re extremely costly: Fees range from $10 to $30 for every $100 dollars borrowed. The APR on these loans can range from 300% to over 500%. For comparison, APRs for credit cards can vary from 12 to 27%. 
  • They’re misleading and predatory: Lenders don’t check if you’ll be able to repay the loan, meaning you could rack up the fees if you need to extend, thus continuing a cycle of debt 

Why Use Branch Instead of Payday Loans:

Branch’s Instant Pay feature is not a payday loan. Instant Pay is simply an advance on the money you’ve already earned through your job. Because we partner with your employer, we’re able to use your time and attendance to know how much of an advance you can take on your paycheck, unlike lenders from payday loans. Through your Branch Digital Wallet and free Branch debit card, you have instant, fee-free access to these earned wages. 

Banking Practice of the Past #4: Waiting for Your Paycheck 

Even if you’ve decided to scrap the physical paycheck and connect your direct deposit to a traditional bank, you’re likely waiting until payday to access any of your pay. Traditional banks use the Automated Clearing House (ACH) network, coordinating with your employer’s financial institution, to push your paycheck to your account on payday. Even when they detect your paycheck has arrived, they typically don’t push your paycheck until the exact scheduled payday.

Issues with Waiting for Your Paycheck: 

  • You may be at risk for overdraft (and fees): Your paycheck may come every two weeks, twice a month, or even just one a month, but your bills often occur throughout the month. Especially if your balance is low or close to zero right before your paycheck and you’ve set up your bills for automatic payments, a badly timed bill can cause you to overdraft, leading your bank to charge you an overdraft fee.
  • You might have to make a payment late (and get charged): On the flipside, if you don’t pay that bill on time, you may incur a late fee. You may even be flagged for a late payment, which can ultimately impact your payment history and credit score. 

Why Use Branch Instead for Your Paycheck:

Ain’t no lie -- Branch not only offers a fee-free checking account (meaning you won’t overdraw or get charged an overdraft fee), but also an option to get your pay up to TWO days early. The moment we detect your paycheck, it’s pushed to your Branch Wallet. 

Need a little more in your account to pay that upcoming bill? Branch’s Instant Pay feature offers an advance on the money you’ve already earned through your job. Because we partner with your employer, we’re able to use your time and attendance to know how much of an advance you can take on your paycheck, unlike most traditional banks. Through your Branch Digital Wallet and free Branch debit card, you have instant, fee-free access to these earned wages and meet your bill payments on time.

High fees and clunky processes are just a few old processes that you can bid bye bye bye. So now it's time to leave and make your banking practices better with Branch. 

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