What’s it like to work for Bank of American Fork? Feb 19, 2014, 8:30 am By Heidi Carmack Pfaffroth

By Kristen Allen

Wouldn’t it be fantastic to love where you work and to feel like your employer genuinely cares about you, your family and your community? Well, Bank of American Fork employees do.

Recently, Bank of American Fork employees completed a Utah Business magazine survey, and the resulting score earned Bank of American Fork the honor of being designated one of Utah Business’ “Best Companies to Work For” in 2013. People love working for Bank of American Fork! This means that Bank of American Fork customers are being served well, by people who truly enjoy what they do for a living.

What is it like working for Bank of American Fork?

Among the perks of working for Bank of American Fork are a 401(k) employer match, profit sharing and financial advisers who help with retirement planning and investment options. The bank also takes care of the full cost of a term life insurance policy for employees, and the board of directors regularly approves generous annual bonuses for the full-time and part-time employees.

On top of that, Bank of American Fork associates have access to discounted tickets to local entertainment, sporting and fine-art events. They can attend various company parties (think copious amounts of food) and participate in health-related contests (to eliminate the subsequent muffin tops).

Bank of American Fork associates celebrate Ken Burnett's birthday by wearing bowties - Ken's signature look.

And, Bank of American Fork takes employee appreciation beyond ticket bargains and financial incentives. The bank hosts catered birthday lunches and celebrates Professional’s Day every year with a little something for each employee.

Bank of American Fork doesn’t just care about its employees, but about their families as well.

“I have never missed a parent-teacher conference, school performance or any other activity my children are involved with because of [a] work conflict,” one employee said.”[Bank of American Fork] offers the flexibility to participate in important family and community programs.”

And perhaps some of the most meaningful advantages of working for Bank of American Fork are the consistent opportunities the bank provides to volunteer and donate to charities. You may have heard of Project Teddy Bear, which benefits Utah’s at-risk children. In 2013, the bank sponsored its 14th annual Teddy Bear Project, which gives bank employees a chance to give back, and encourages the community to come together for a heart-warming cause. When asked what it means to work for a company involved in such a civic service, one employee answered, “It feels really rewarding to work for an organization that regularly tries to build and uplift our community.”

Bottom line: Bank of American Fork associates felt the love in 2013. When asked about benefits and compensation, growth opportunities, company culture, management and everything else about working for the bank, employees gave their employer a ringing endorsement. Or put another way: Bank of American Fork employees love their jobs, and love helping you love the bank!

2013: A Year of Giving Feb 18, 2014, 12:11 pm By Heidi Carmack Pfaffroth

Last year was another year of generous giving to dozens of local non-profits, schools, arts programs and community groups. In 2013, Bank of American Fork donated more than $150,000 to almost 150 organizations, touching thousands of lives. Additionally, our annual Project Teddy Bear collected 20,466 stuffed animals for at-risk kids that utilize various family support centers across the state—a record year of donations from the bank family, community groups and individuals.

Here’s our comprehensive list of charitable giving in 2013. Looking forward to another year of giving back!

Alpine City Rodeo

Alpine Community Theater

Alta High School Boys Basketball

American Cancer Society Sandy Relay

American Diabetes Foundation

American Fork Arts Council

American Fork Canyon Half Marathon

American Fork Children’s Choir

American Fork Football Boosters

American Fork High School

American Fork High School Basketball

American Fork High School Drama Department

American Fork High School Girls Basketball

American Fork High School Girls Soccer

American Fork High School Girls Softball

American Fork High School Marching Band

American Fork Junior High PTSA

American Fork Rotary Club

American Fork Steel Days

American Fork Symphony

American Heart Association

American Leadership Academy

American Leadership Boys Basketball

American Legion Post #68

American Lung Association in Utah

American Premier Soccer

American Red Cross

Aristotle Academy Charter School

Boys and Girls Club of Utah County

Cedar Hills City

Center for Women and Children in Crisis

Central Utah Parks and Recreation Association

Community Action Services of Utah County Food Bank

Community Health Connect

Community Presbyterian Church

Desert Hills Thunder Football

Diamond Fork Riding Club

Distinguished Young Women of Alpine

Distinguished Young Women of Highland-American Fork

Distinguished Young Women of Utah-Lehi

Draper Community Foundation Rodeo

Eagle Mountain City

Fullmer Brothers Golden Glove

Habitat for Humanity Utah County

Herriman City

Highland Fling

Huntsman Cancer Foundation

Jordan High School

Karl Maeser Preparatory Academy

Kiwanis Club

Kostopulos Dream Foundation

Lady Caveman Lacrosse

Layton High School Basketball

Layton High School Jazz Band

Legacy Elementary

Lehi Booster Club

Lehi City Family Week

Lehi High Grad Night

Lehi High School Girls Basketball

Lehi High School Sports Marketing

Lehi Library Gala

Lehi Longhorn Rodeo Team

Lehi Round-up Rodeo

Lehi Youth Football

Lone Peak High School Football

Lone Peak High School Jazz Band

Manila Elementary PTA

Miss Northern Utah County

Mountain Ridge Junior High

Mountain Ridge Junior High Drama

Mountainlands Community Housing Trust

Mountain View High School

Mrs. Utah United States

Nebo Education Foundation

Neighborhood Housing Services of Provo

Pleasant Grove High School Football

Pleasant Grove High School Girls Basketball

Pleasant Grove High School Softball

Pleasant Grove High School Wrestling

Pleasant Grove Recreation

Pleasant Grove Strawberry Days

Polynesian Heritage Youth Association

Pony Express Elementary

Riverton High School Band Booster Association

Riverton High School Drill Team

Riverton Rodeo

Riverview Elementary

Rotary Club of Pleasant Grove

Rural Community Assistance Corporation

Rural Housing Development Corporation Urban Self-Help

Salem Hills High School Football

Saratoga Springs City Splash

Saratoga Springs Fire Department

Saratoga Springs Library

Senior Housing Crime Prevention Foundation

Service Legacy Foundation

Shelley Elementary

Shelley Elementary PTA

Southland Elementary PTO

Spanish Fork Chamber Easter Egg Hunt

Spanish Fork Fire Fighters

Spanish Fork High School

Spanish Fork High School Basketball

Spanish Fork High School Football

Spanish Fork Rotary

Timpanogos Academy PTO

Timpanogos Arts Foundation

Timpanogos Arts Foundation Community Theater

Timpanogos High School Intramural Program

Timpanogos High School Volleyball

Timpanogos Symphony Orchestra

Timpview High School Baseball

Timpview Tennis Team

Tiny Tim Foundation for Kids

Utah Bankers Association Education Committee Fisher House Dinner

Utah County Fair Pig Wrestling

Utah County Hispanic Chamber of Commerce

Utah Food Bank

Utah Home Builders Association

Utah Horns Baseball

Utah Housing Coalition

Utah Housing Non-Profit Housing Corporation

Utah Micro Enterprise Loan Fund

Utah Ram Sale

Utah State Junior Livestock Show

Utah Valley Skyline Chorus

UVU Scholarship Ball

Viewmont High School

Volunteers of America

Westlake High School Football

Westfield PTA

Westlake High School Girls Softball

Westlake Senior Night Basketball

Westlake Youth Football League

Youth Champions Charity

Charitable giving options Feb 13, 2014, 8:45 am By Heidi Carmack Pfaffroth

Guest post by Angie Morris, CPA, Hawkins Cloward and Simister

Often we desire to share our good fortune by contributing to charities for those in need.  With tax season underway, you may be evaluating the charitable contributions you made last year and figuring out how you want to make contributions this year. While we tend to donate for altruistic reasons, there is also a tax benefit for making charitable donations.  The method through which you gift determines your tax benefit. There are several ways to make a gift to a charitable cause, so which one is right for you?

IRS-approved charity. One of the easiest and most common ways to donate to charity is by giving directly to an IRS-approved charity.  Donating in this manner allows you to take a tax deduction based on the fair market value of the gift.  Through direct giving you choose the charity, amount and timing of the contribution.  A tax deduction for a cash gift would be limited to 50% of your adjusted gross income (AGI) and 30% for securities held more than a year.

Private foundation. If you want to maintain control over investment and grant making decisions, a private foundation may be an effective way for you to donate.  A private foundation is an independent charitable corporation, with tax-exempt recognition by the IRS.  Private foundations are heavily regulated by the states and the federal government.  You will need to follow the compliance requirements including annual distributions and information reporting to the IRS.  Individuals that create private foundations often involve their family members with the management of the foundation.  Foundations can be costly to establish and operate; therefore, a donation to establish the foundation is usually a significant amount.  The tax deduction will be based on the fair market value of the gift.  Private foundations have a 30% AGI limit for cash gifts, and 20% for securities held more than one year.

Charitable annuity trust or charitable remainder trust. A charitable annuity trust and charitable remainder trust are a way to leave funds to a charity while receiving a stream of income over your life or a set period of time.  An agreement is reached with the charity to leave the remainder of the assets to the charity, but you get income during your lifetime.  An annuity trust will give you a fixed amount of income annually, a remainder trust will give you income for a set period of time; once you pass away the charity will keep the remainder of the assets.  There are reporting requirements with these types of trusts.  The tax deduction will be based on the fair market value of the estimated assets remaining that go to the charity.  These types of donations usually involve higher funding amounts.

Donor advised fund. A donor advised fund is a separate account maintained by a public charity that allows you to donate and accumulate funds, and recommend grants.  Once you make the donation, the organization has legal control over the funds, but you have advisory privileges on the investment and distribution of the funds.  Distributions must be made to public charities.  These types of funds are designed as a simple, accessible, and less expensive alternative to a private foundation.  There is usually a minimum amount you must contribute to set up the account. The tax deduction is 50% AGI for cash gifts and 30% AGI for securities held over a year.

There are a variety of ways to transfer assets to a charity.  Comparing the different options before deciding will ensure that you choose the best for you.  Some aspects to consider are the tax benefits, cost and complexity to establish and maintain and input you can have on the investments and charitable giving.  Once you compare and contrast the options you can determine the best tool to suit your charitable giving goals.

Angela A. Morris graduated from Brigham Young University. She is a member of the AICPA and the UACPA. She has served as the treasurer of the Utah Association of CPAs and president of the UACPA Southern Chapter. She is currently the vice chair for the Housing Authority of Utah County, the treasurer of the Utah Valley Chamber of Commerce Women’s Business Network, and on the executive board for the Utah Valley Chamber of Commerce. Angie loves spending time at Lake Powell and is a devoted St. Louis Cardinals fan.

CEObuilder event: Making the shift from competing to winning Feb 11, 2014, 9:00 am By Heidi Carmack Pfaffroth

CEObuilder and Bank of American Fork invite you to join us on Wednesday, February 19, 2014 for a forum and presentation by Leo Hopf, author and strategic consultant. Hopf’s presentation will focus on set your business up to win. You can also join the conversation on Twitter at #ceobuilder or LinkedIn.

Most organizations are set up to compete.  They are good at many things, and each year they try to get a little bit better across the board.  They have diversified their products and services so they have many chances to connect with the marketplace.  They have numerous initiatives, each with high priority. 

A few organizations are designed to win.  They have defined and aligned behind one or two bets for excellence.  They prioritize and sequence their efforts to further strengthen where they are excellent, and they ruthlessly eliminate areas in which the competition is just as good as they are.

We will discuss how to make the shift from just competing to winning.

Hopf’s session will include discussion on the following:

• Where is your organization placing its bet to win?

• How is the world changing around you? How fast are you changing relative to the world around you?

• Which parts of your business model are set up to win in the world of three years from now? Which parts are better matched to the world as it was three years ago?

• Which parts of your business are on track and should focus on continuous improvement?

• Which parts of your business need to be renewed with a change of business model?

• What can you stop doing right now that will free up time and resources to invest where you are trying to build excellence?

• How are you defining “winning” in your organization? Will your current path deliver the win you want?

This forum will be held at Bank of American Fork, Riverton Branch Conference Room, 2691 West 12600 South, from 8:30 a.m. to 4:30 p.m. on Wednesday, February 19. Please RSVP by Monday, February 17 by contacting Heidi at Heidi.carmack@bankaf.com or 801-642-3139.

About Leo Hopf

Leo Hopf is the author of “Rethink, Reinvent, Reposition:  12 Strategies to Renew Your Business and Boost Your Bottom Line” which was named the book of the month by the Institute for Management Studies.  He gives a dozen keynote speeches each year on strategy, decision making and business renewal.

He has led hundreds of strategy sessions with CEOs, leadership teams, and boards of directors.  He designed the decision making and strategic planning processes for five of the Fortune 100 largest companies.  He has facilitated sessions with dozens of CEOs on behalf of two different industry associations.  Mr. Hopf also works to build strategic bench strength in the next generation of leaders.

Hopf has worked in numerous business sectors: medical devices, health care, telecommunications, pharmaceuticals, banking, insurance, real estate, food manufacture, retail groceries, office products distribution, high-tech materials, remote sensing, travel, upstream and downstream oil and gas, pulp and paper, chemicals, mining, engineering and construction, academic and professional medical societies and building products.  He has led major consulting engagements in Indonesia, Singapore, New Zealand, Australia, Canada and Kuwait.

Each year he lectures on decision making at Stanford University in their graduate management science and engineering department.  He also teaches strategy and business renewal at the University of Minnesota’s Carlson School of Business where he is a fellow of executive education.  In addition, Hopf has lectured on strategy at the Copenhagen Business School.

Before founding Teamhopf, he was a managing director for Strategic Decisions Group, and served on their executive committee.  He is an angel investor and has advised and invested in dozens of startups.  He was formerly a member of the Band of Angels in Silicon Valley. He is on the board of directors for Listen Technologies.

Hopf earned an MBA with highest distinction from the Tuck School of Business at Dartmouth, and has bachelor’s degrees in chemical engineering and in metallurgical engineering from the University of Minnesota.  He received the Walter Jacobs Prize for inspiring confidence and enthusiasm amongst his peers while at the Tuck School.

Picture This: Mobile ExpressDeposit TM Jan 31, 2014, 10:08 am By Heidi Carmack Pfaffroth

By Amy Falke

If there’s still a check sitting in your wallet right now, there are probably a few different reasons you haven’t gotten around to depositing it. Maybe you didn’t make it to the bank before you headed out of state for a week. Perhaps it was just another fast-paced day until you slipped under the covers for some much-needed sleep and you suddenly realized you forgot to deposit that check—again, and your mind began flooding with the next day’s already packed to-do list. Maybe you’ll swing by the bank at lunch.

Mobile ExpressDeposit allows qualified* Bank of American Fork customers to use their mobile device to deposit checks any time— day or night— simply by snapping a picture and sending it through mobile banking, so you can rest easy. Here are the basics of how to use it:

  • Select either Mobile Express Deposit or the Deposit option after you log into mobile banking.
  • Click on Deposit Check
  • Complete the simple enrollment (Takes a day or two for approval—first time only).
  • Take photos of the front and back of your endorsed check.
  • Enter the deposit amount and choose your account for deposit.
  • Submit and get confirmation of your deposit†.

Mobile ExpressDeposit is a secure way to deposit your checks.  Learn more about this product here (and click the FAQ for more great info). If you think this might come in handy for you, use your Bank of American Fork app to sign up now, so next time you’ve got a check sitting in your wallet you can deposit it on your lunch break and still have time to enjoy a tasty sandwich.

* To be eligible for Mobile ExpressDeposit, you must be a Bank of American Fork online banking customer with direct ownership of a Bank of American Fork checking or savings account, your account must have been active for at least 60 days, no overdrafts in the last 6 months, and no more than 1 chargeback in the last six months. For consumer accounts there is a $0.50 fee per deposit on the first 20 deposits processed in the calendar month and a $1.00 fee per deposit on each deposit over 20. For business accounts there is a $0.50 fee per deposit on the first 60 deposits processed in the calendar month and a $1.00 fee per deposit on each deposit over 60.

†Deposit cut-off time is 6:00PM Mountain Time, Monday – Friday (excluding holidays). Deposits submitted after 6:00PM will be processed on the next business day. Deposits are subject to verification and not available for immediate withdrawal. Deposit limits and other restrictions apply.

From the Office to your Business Bank Account Jan 30, 2014, 9:27 am By Heidi Carmack Pfaffroth

By Amy Falke

The sun begins to sink as you look over the items on your office desk. You’re ready to go home and you start to think about what you might have for dinner when your glance falls on the small stack of checks that have accumulated over the last 48 hours. Looks like a trip to the bank stands between you and dinner. The pang of hunger momentarily makes an inner-office teller line seem like a practical business pursuit.

Bank of American Fork has a better solution. ExpressDepositTM allows you to deposit checks directly from your office.  This system uses a remote deposit scanner that electronically deposits your checks with a secure, web-based processing system. If this solution is right for your business, we’ll send a bank associate to your office to help with set-up and training.

We already offer ExpressDeposit for less than most banks, and we’re currently offering it for only $1 per month for the first six months*.

*Limited time only. Subject to approval. After six months, the following standard fees will apply to single accounts with an average number of deposits: $1 monthly lease fee, $25 monthly maintenance fee, and transaction fees of $0.05 per item deposited and $0.255 per credit. More options are available for higher volumes of deposits or multiple accounts, contact your business banker for more details.  

Category: Business | No Comments

Traveling and Card Safety Jan 29, 2014, 1:27 pm By Heidi Carmack Pfaffroth

By Amy Falke

Details of this trip have been buzzing around your head for the past few weeks and now, as you start your drive to the airport, the to-do list runs through your head one more time. You begin to mentally check things off your list. Ask neighbor to take care of animals, check. Adjust the thermostat, check. Call the bank, check.

What? Call the bank—why would you call the bank?

Letting the bank know your travel plans helps prevent an unexpected block on your bank card. Because Bank of American Fork values cardholder safety, we try to anticipate normal cardholder activity. If a cardholder does something that is outside their normal activity, a “possible fraud” alert may be triggered and a temporary block may be placed on the card. This block remains on the card until the customer confirms the validity of the transaction with the bank or with the fraud monitoring service provider.  For example, if most transactions for a card have been in Utah County, when the card registers a transaction in Miami, Florida, it can trigger an alert and may block the card.

The prevalence of international card fraud has caused Bank of American Fork to implement practices that protect customers in these areas, as well. Certain countries have been identified as having higher fraudulent card activity and using your card in these countries may create a block on your card. If a customer is planning to travel internationally, he or she can contact the bank and request that their card be temporarily released from the automatic block. Once the customer returns home, they will not need to contact the bank again. The country blocks will automatically be placed back on the card based on the timeframe provided in the travel plans.

Providing the bank with travel notes of planned locations and time-periods prior to your departure allows the bankcard department to make the necessary adjustments that can ensure uninterrupted card service during and after your trip. For additional questions or to place travel notes, speak to a teller or new accounts person at your local branch, send a secure message through your online banking, or call customer service at 800-815-BANK.

By Amy Falke

Wednesday, January 15th 9:00 a.m. – 4:30 p.m.

Bank of American Fork and CEObuilder invite you to join us for the following event:

CEObuilder Forum – Building a World Class Company through Business Performance Dashboards: Increase revenue and reduce costs without impacting headcount to put 3% of annual revenues back on the bottom line.
Presented by: Alan Davis, CEO of i5 Services

World class actions drive world class results. Come and learn what world class companies like British Airways, Wal-mart, Pepboys, RiteAid, etc. are doing to put as much as 3% of annual revenues back on the bottom line without impacting headcount. Understand how the lessons they have learned apply to your business.

Detailed intensive focus drives world class athletes to the pinnacles of performance. Business Performance Dashboards now make it possible to apply the same type of intensive focus in every area of your company.

Meeting format:
9:00 a.m. – Breakfast
9:30 a.m. – Presentation
12:30 to 1:30 p.m. – Lunch
1:30 p.m. to 4:30p.m. – Debrief and Peer Advisory Panel
(Note: CEObuilder members may choose to close the afternoon session if sensitive matters need to be discussed.)

Location: Bank of American Fork Riverton Branch 2691 W. 12600 South Riverton, UT 84065

or by calling Christopher Liechty at 801-642-3094.

Understanding bank behavior Dec 12, 2013, 8:10 am By Heidi Carmack Pfaffroth

 Guest post by Richard Gray

Recently I was reading an article about how the Bureau of Economics is evaluating and changing the way it will measure U.S. GDP. They are working to better capture intellectual property and reclassify research and development as an investment instead of an expense. Today, most of the efficiencies in business are because of innovation in technology and ideas, and valuating these innovations is important and tricky.

Though it’s well known that valuating intangibles is difficult, many businesses don’t understand why lenders think twice when the collateral behind a loan request is intellectual property or something intangible and hard to measure. However, understanding the thinking behind this behavior can help would-be-borrowers prepare so they can be successful in obtaining financing.

People and businesses make deposits at banks, giving the financial institution stewardship of their assets. Banks must be sure they are safe for community deposits. When banks turn around and make loans, they are sometimes risk-averse because they are protecting community wealth, besides making sure the bank’s own business is sound and safe. A bank’s behavior is not just based on its own interests and needs, so decisions are made with the community and economy in mind. Often, financial institutions are fairly conservative.

Financial institutions are an important part of the infrastructure of communities—playing a key role between depositors and borrowers.

During The Great Recession, more borrowers were struggling to pay back loans, and even defaulting. This caused many banks to be even more conservative lenders, in order to protect depositors. However, with the improvement our economy has been experiencing, banks are ready to loan to businesses that want to grow.

Growth might include a loan to buy the building a business is renting or leasing, commercial construction loans, equipment loans, accounts receivable and inventory loans or export loans. Regardless of the type of loan, the bank will determine whether it will lend based on cash flow, credit, capital and character.

How is a loan decision made? When a potential borrower talks to a loan officer about obtaining a loan, it is crucial for the loan officer to understand the borrower’s plan and situation (a few months ago, I talked about what business owners can do to be loan ready). The loan officer does not make the loan decision, but rather, personally represents you, your readiness and your personal character to a loan committee, giving you the best chance for success. The loan committee determines risk—and I’ll talk more about risk assessment and management another time—and makes a decision about how much risk can be afforded.

After getting to know you and your business, the loan officer has to make a case for funding your loan to a loan committee comprised of various executives at the financial institution. Loan officers are your advocates, and the more information you can provide them, the more compelling their presentation will be for the loan committee to approve your loan. The loan officer needs to be able to present clearly the loan request, business information, management character and financial information.

Again, the loan committee will make a decision based on the borrower’s ability to pay back the loan, to keep safe the community’s wealth and facilitate economic growth.

If you’re worried about a lack of collateral, recognize that bankers understand when a start-up doesn’t have any. In these cases, other considerations include management capability, cash flow, owner’s equity contribution and good character. The more tangibles you can put behind your business, the better the loan committee will be able to measure the risk of lending. This is when it pays to have developed a sound relationship with your banker. Banks are the largest lender of debt capital to small businesses and may be one of the only institutions willing to take a chance on an unproven entrepreneur.

If you’re a business owner looking to grow your business, understanding why banks lend to some and not others can help you prepare. Consider the perspective of an institution that is not just taking on risk for itself, but protecting depositors in the community. Understanding this perspective will help you to prepare so that an outside eye will see your business’ potential for good in the economy and as a safe bet for the community.

This article first appeared in The Enterprise.

Richard Gray is senior vice president of commercial lending and SBA lending at Bank of American Fork, Utah’s community bank leader, an Equal Housing Lender and Member FDIC. Richard also manages the bank’s Murray branch, and he has assisted local small businesses in obtaining SBA funding for more than 25 years. He serves on the board of directors for nonprofit Kostopolus Dream Foundation and was the chairman for nonprofit Utah Microenterprise Loan Fund, Salt Lake City.

Category: Business, Loans | No Comments

Debit, credit and prepaid cards: there are differences Dec 09, 2013, 8:40 am By Heidi Carmack Pfaffroth

Courtesy of FDIC

Many consumers use debit, credit and prepaid cards, often interchangeably, to purchase goods and services. However, these three types of cards are quite different. Consider the following.

Each card works differently. If you use a credit card, you are borrowing money that you must pay back, in addition to interest, if you do not pay the balance in full by the due date. But, if you use a debit card, which is issued by your bank and linked to your checking or savings account, the money taken from the account is yours and you will never incur interest charges.

With prepaid cards, you are spending the money deposited onto them, and they usually aren’t linked to your checking or savings account. Prepaid products include “general-purpose reloadable” cards, which display a network brand such as American Express, Discover, MasterCard or Visa; gift cards for purchases at stores; and payroll cards for employer deposits of salary or government benefit payments. Be aware of the possibility of unanticipated fees and, with certain types of these cards, the potential for limited consumer protections against unauthorized transactions.

Watch for fees. You may be charged an overdraft fee if you use a debit card for a purchase but there aren’t enough funds in the account and you have given your bank written permission to charge you for allowing the transaction to go through. “You can always revoke that authorization if you don’t want to risk paying these fees, and future debit card transactions will be declined if you don’t have the funds in your account,” explained FDIC Consumer Affairs Specialist Heather St. Germain.

Similarly, a credit card issuer may decline a transaction that puts you over your credit limit unless you have explicitly agreed to pay a fee to permit over-the-limit transactions.

Prepaid cards are sometimes marketed with celebrity endorsements and promotional offers. “While some prepaid card offers seem attractive, remember that you may have to pay various fees on the card,” said Susan Boenau, Chief of the FDIC’s Consumer Affairs Section. “These costs may include monthly fees, charges for loading funds onto the card, and fees for each transaction.”

As an alternative to a traditional checking account or prepaid card, consumers who don’t plan to write checks but do want to bank electronically may want to consider opening a “checkless” transaction account that allows you to pay bills and make purchases online or with a debit card.

Your liability for an unauthorized transaction varies depending on the type of card. Federal law limits your losses to a maximum of $50 if a credit card is lost or stolen. For a debit card, your maximum liability under federal law is $50 if you notify your bank within two business days after learning of the loss or theft of your card. But, if you notify your bank after those first two days, under the law you could lose much more.

Your liability for the fraudulent use of a prepaid card currently differs depending on the type of card. Federal law treats payroll cards the same as debit cards, but currently there are no federal consumer protections limiting your losses with other general-purpose, reloadable prepaid cards and store gift cards. The Consumer Financial Protection Bureau is considering increasing the consumer protections for prepaid cards, but any action is likely to be a year or more away.

In addition, the funds you place on a prepaid card may or may not be covered by deposit insurance in the event of a bank failure, depending on how the account where the funds are held is set up and whether the bank or the card issuer’s records at the time of the bank closing identify each cardholder’s ownership interest.

For all cards, industry practices may further limit your losses, so check with your card issuer.

Also take steps to guard any cards from thieves. Never provide any numbers in response to an unsolicited phone call, e-mail, text message or other communication you didn’t originate. Immediately review your statement for unauthorized transactions.

To learn more about the three types of payment cards, visit www.fdic.gov/consumers/consumer/information/ncpw/index.html, which includes an FDIC “quick guide” to understanding the differences in the cards.

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