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Having a credit card is an excellent way to have purchase power and flexibility. However, obtaining a credit card has a few prerequisites, including an established credit score and physical mailing address. But do you need an established checking account to have a credit card?
In fact, you don’t need a checking account to have a credit card. However, it will probably make your life a whole lot easier.
When you apply for a credit card, the bank will not ask for your banking information. It is up to you to ensure that your statement is paid on-time.
You can pay your credit card bill through the following methods:
ACH transfer: This is done by transferring money from one account to another.
Cash: If your credit card issuer has in-person bank branches, you can pay your bill in cash.
Check: If you do not have a checking account, you likely won’t be able to pay with a check.
Money Order: You can purchase a money order and mail this with your statement to your credit card issuer.
Keep in mind that while it is possible to have a credit card without a checking account, it may cause more headaches than you want.
Do you need to have a bank account to open a credit card?
The short answer is no. Credit card companies will only look at your credit score, current employment and income to determine your eligibility for a credit card.
As a credit card holder, it is your responsibility to pay any balances on the card, regardless of payment method. While it will be much more convenient to pay your balance with a personal bank account, it is possible to have a credit card without a bank account.
Having a bank account can streamline your credit card payments
An active bank account gives you an abundance of financial tools and flexibility, including direct deposit into a checking account and the ability to save money in a savings account. Your money will also be insured by the FDIC.
The best checking accounts will also give you features such as no fees, a robust ATM network to withdraw cash from, a respectable interest rate and great digital banking platforms.
But when it comes to paying your credit card bill, a bank account will allow you to either digitally send the money through bill pay, or the credit card issuer can automatically pull the funds from your account. This is a great feature because you can schedule when your payment will be withdrawn.
Additionally, you will save money, time and possibly stress by not manually sending your payment through the mail, which carries the risk of getting lost.
Benefits of having a credit card and checking account at same bank
There are plenty of banks that also offer excellent credit card options for consumers. A few of these include Chase Bank, Bank of America, Capital One and more. Even your local bank or credit union may offer credit card products.
When searching for the best credit card for your financial needs, don’t overlook your own banking institution for their credit options as well.
First off, it is convenient to have a credit card with your own bank, as they have all your information on file. Also, if you use digital banking, your checking account and credit card information is likely integrated into the same platform.
As an established customer, you may have more leverage to negotiate credit card terms, including increasing your credit line or lowering your interest rate if you also have deposit accounts. And by having multiple products with your bank, some offer enhanced rewards.
For example, Bank of America has its Preferred Rewards program, which offers up to a 75% bonus on the amount of credit card rewards you can earn. So if you pair the Bank of America® Travel Rewards credit card with an established checking account, savings or Merrill Investing account, along with other qualifying activities to be apart of the Preferred Rewards program, the number of points earned each time you swipe your card will increase.
However, do not feel tied to your own bank when looking for credit card options. There are dozens of credit card issuers yearning for your business through outstanding welcome offers. In fact, earning points and miles right now has never been better. However, having a checking account that works for your needs is the first step to financial ease.
For instance, if you bank with Capital One but are looking for a new credit card, you could get huge value by looking at credit cards from other institutions like Chase. Right now the Chase Sapphire Preferred® Card has a 100,000 point welcome bonus after spending $4,000 on purchases in the first 3 months from account opening. Those bonus points are worth $1,250 when redeeming through the Chase Travel Portal.
5X points on Lyft rides through March 2022, 2X points on travel and dining worldwide, 1X points on all other purchases
Earn 100,000 bonus points after spending $4,000 on purchases in the first 3 months from account opening
15.99% to 22.99% variable on purchases and balance transfers
Balance transfer fee
Either $5 or 5% of the amount of each transfer, whichever is greater
Foreign transaction fee
How to choose the right checking account for you
There are hundreds of checking accounts available right now, and selecting the best one for you can seem daunting. When shopping around for the best checking account for you, consider the following:
1. Is the bank FDIC insured? If the bank is not FDIC insured, it is best to steer clear, as they aren’t insured in case of bank failure.
2. What fees are associated with the account? Be sure to note any ATM fees, overdraft fees or monthly maintenance fees.
3. Is there a large ATM network? If you find yourself withdrawing cash regularly, you will want a bank with a large ATM network.
4. What is the interest rate? Many checking accounts offer interest on your balances, so be sure to shop around for the highest interest rate possible.
5. Is there a sign-up bonus? Banks are constantly looking for new customers, and regularly offer sign-up bonuses for new checking account customers.
If applying for a credit card is in your future, it will ultimately benefit you in the long run to have an established checking account to go along with it. While it is possible to have financial products without one, it will prove to be more of a headache.
Information about the Bank of America® Travel Rewards credit card has been collected independently by Select and has not been reviewed or provided by the issuer of the card prior to publication.
Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.