There are laws in place that prevent banks from closing accounts based on things like race, but if you are a poor customer, and your account goes delinquent, then the bank can close your account. Usually, that only happens after your account has been negative for a set number of days, and you should have received notices from the bank about the issues.
What Should I Do if My Bank Has Closed My Account?
As soon as you receive notice that your bank has closed your account, you need to take immediate action in order to be able to continue to pay your bills and manage your money. If you do not, your paycheck may go to the bank, but you will not be able to access the funds. The bank may keep the money to help cover your negative balance, since you still owe that money.
How Can I Avoid Having My Bank Close My Account?
The best way to avoid having your account closed is to avoid a negative balance. Even if your account offers overdraft services, you will be paying a lot in overdraft fees, and you may become trapped in an overdraft cycle where more and more of your paycheck goes towards the overdraft fees. If you have started an overdraft cycle, you will need to break it. You can do that by cutting back on your spending and possibly speaking with your bank about a schedule to pay back the fees so you can still afford groceries and to pay your rent during the week. You may need to consider selling something or taking on extra work in order to recover from being overdrawn. You need to be proactive until you fix the situation. If you have not already, you should set up a bare-bones budget and start putting all of your extra money into catching up with the bank and other bills. This may mean that you limit spending on luxuries and cancel things like your cable subscription and gym memberships.
Living Without a Bank Account
If you have your account closed, it will be difficult to find another bank or credit union that is willing to work with you. You will need to learn to operate without a bank account for a few months. You can use money orders to pay many of your bills, or you may want to try to get by with a prepaid credit card. It can be embarrassing to talk to your employer about the issues, but you will need to work out a payment method if your job will only pay you by direct deposit. Some banks may be willing to open a savings account with direct deposit for you until you can establish a checking account again.
