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July 14, 2022

5 Banking Myths You Shouldn’t Believe

Bust these banking myths to help build your financial knowledge.

There are many misconceptions and myths about banking. Instead of letting these misconceptions guide your financial decisions, it is important to research for yourself. Below are five common banking myths, debunked.

Online or mobile banking is risky

A common misconception is that online and mobile banking aren’t safe or secure; putting personal information at risk. However, this is not at all the case. Online banking is just as secure as banking in person as long as the bank is insured by the Federal Deposit Insurance Corporation, covering as much as $250,000 per individual customer. It’s important to remember to follow safe banking guidelines carefully to help avoid any security accidents.

Debit and credit cards have the same theft protection

Debit cards and credit cards operate differently from one another and offer different levels of theft protection. While debit cards offer theft protection under the Electronic Funds Transfer Act, they are connected to your bank account directly. A credit card generally offers more protection and does not withdraw directly from your bank account.

Banks charge inescapable fees

Because of this common misconception, many people choose not to open checking or savings accounts with banks. While many banks charge small fees, there are many ways to avoid these costs. Some ways to do this include; keeping multiple accounts at your bank, keeping a minimum balance, using only your bank’s ATMs, and making sure to not spend more money than you have. Financial institutions are a great way to keep your money secure, and protected against error and fraud.

Have a large credit card limit for emergencies

Bigger is better…right? More often than not, people commonly seek credit cards with large limits. Large limits can provide peace of mind that a large sum of money is accessible if a financial hardship occurs. However, it is important to not solely rely on credit. Make sure you take time to set aside money for an emergency fund in case a financial crisis occurs. If you plan to manage this fund, you’ll be ready to take on whatever comes your way.

Big banks are better than small banks

Even though large, nationally recognized banks may seem more familiar, that does not mean they are better than smaller, local banks. Every bank offers different benefits; noting how these benefits align with your financial goals should be at the forefront of your decision making process. In general, small banks offer better benefits to small businesses, offer more community oriented products and services, and are more willing to work with customers in providing deals and reduced rates.

Financial education is an integral part of managing personal finances. Learning the reality of these misconceptions is a great starting point in becoming more knowledgeable about finances and financial institutions. At Citizens First Bank, we’re always here to help. Call or visit your local branch for personalized, expert advice today!