You snooze, you may lose with bank accounts
Q: In your Jan. 8 column, a reader wrote about a bank account that has been inactive for seven months. He was concerned that his account would be closed if only a minimum amount of money is in it. I would like to raise another possibility: A: friend's account was closed and the money in the account was turned over to the state because there had been no withdrawals. Deposits and interest earned apparently did not count. Is this common?
A.B., Ormond Beach, Fla.
A: "Closing an account because of a lack of withdrawals alone seems very uncommon, since most banks like to keep money in accounts," says John Hall, a spokesman for the American Bankers Association, in Washington. "If money was deposited in the account, or there is other activity, then that is usually sufficient to keep an account active."
But Mr. Hall says the letter above serves as an excellent reminder to read all informational materials when opening an account, and to read subsequent bank correspondence in case it has new or unusual rules.
"Banks are required by law" to make a good-faith effort to contact you before an account is closed and assets are turned over to the state, he says. Make certain your bank has your up-to-date mailing address.
Finally, he suggests occasionally checking lists of unclaimed assets that states maintain. The lists may include a bank account that you or a relative opened and have since forgotten. To locate such lists, go to www.un claimed.org.
Q: I was thinking of refurbishing my apartment and getting some equipment I've needed. What are the pros and cons about taking out a personal loan from a bank, or charging everything to my credit cards?
H.J., Los Angeles
A: A credit-card will give you quick access to cash and let you spread payments over many years if you want to.
A personal loan has a fixed payment schedule and usually carries a lower interest rate than a credit card. A loan often takes some time to process before being granted. But if you are patient, it will cost you a lot less in the long run.
In their new book "The Die Broke Complete Book of Money" (Harper Business), personal-finance writers Stephen Pollan and Mark Levine suggest that personal loans require the same type of comparison shopping that you would undertake to get a car loan. Rates vary.
Questions about finances? Write: Guy Halverson The Christian Science Monitor 500 Fifth Ave., Suite 1845 New York, NY 10110 E-mail: email@example.com
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