Newcomer's Handbook Seattle

Money Matters

Banking

As soon as you find a place to hang your hat, you will want to find a home for your money. For major deposits, shop around for interest rates, but for routine checking and savings, you’ll be more interested in ATM fees, online banking options, and direct deposit services—an increasingly common alternative to getting a paycheck in the mail or on your desk. Although opening an account is fairly simple, it’s a good idea to keep your old checking account current until you’ve completed the task of setting up a new one here. This can be particularly important if you’re going to try to rent a home or apartment before opening a local account; many landlords won’t accept a tenant who doesn’t have a bank account.

You’ll probably want to call around to find out about special promotions; many banks offer special deals or extra perks for opening a checking account. But be sure to find out when the promotion ends and what the normal rates are. Debit cards, often displaying a VISA or MasterCard symbol, take the place of a written check, deducting the amount of your purchase directly from your checking account, usually at no charge. They can be used as an ATM card for cash withdrawals and deposits, but be aware that using ATM machines that are not owned by your bank can often incur fees. Most banks in the Seattle area charge non-members a fee to use their ATM machines. This charge can range from $3.00 to $5.00.

To open a checking account, you’ll need to apply at the bank’s website, or visit a local branch office and bring the minimum deposit required (this amount varies from bank to bank, so call ahead). You will also need photo ID and proof of address (a letter or utility bill mailed to your new address, or your rental contract).

You may also want to open a savings account in addition to your checking account. With some banks, you will save on fees by having two accounts at the same location. Other services offered by banks include credit cards, loans, mortgages, lines of credit, and online bill paying.

The largest Seattle banks offer the convenience of branches throughout the Puget Sound area. There are also many smaller community banks offering competitive rates and services. You may find membership in a credit union more appealing, with better interest rates, lower loan fees, and low-fee checking. Most of the following area banks have several branch offices in the city and surrounding communities:

Credit Unions

A low-cost alternative to a bank checking account is a similar type of account at a credit union, where rates are often higher and fees lower. Formerly, you had to belong to a union or an employee organization to have access to these consumer-friendly nonprofits, but recent rule changes have relaxed membership requirements to allow wider access to credit unions. In many cases, all you need is to be a state or county resident. Contact information for local credit unions is listed here:

  • Alaska USA Federal Credit Union, 800-525-9094, alaskausa.org
  • Boeing Employees Credit Union, 800-233-2328, becu.org
  • Cascade Federal Credit Union, 800-562-2853, cascadefcu.org
  • Prevail Credit Union, 800-248-6928, prevailcu.com
  • Qualstar Credit Union, 800-848-0018, qualstarcu.com
  • Salal Credit Union, 800-562-5515, salalcu.org
  • School Employees Credit Union of Washington, 888-628-4010, secuwa.org
  • Seattle Metropolitan Credit Union, 800-334-2489, smcu.com
  • Verity Credit Union, 800-444-4589, veritycu.com
  • Washington State Employees Credit Union, 800-562-0999, wsecu.org

Internet and Online Banking

While online banking has been provided by traditional brick-and-mortar banks for years, there is a new breed of institutions, the Internet-only banks. These are banks without brick-and-mortar counterparts, and while some believe they are the future of banking, traditional institutions don’t seem to be in immediate danger. While many people still like knowing that their bank has a branch in their neighborhood or city, an increasing number take advantage of the online banking services provided by their bank.

Even if you choose to do most of your banking at a traditional bank, it might be worth your while to investigate an Internet bank for high interest rate products like CDs, though be sure to read the fine print carefully. Most offer introductory rates that will change after your account has been established for a specified time. Also be aware that Internet banking can be convenient if you have payroll direct deposit, but if you need to deposit checks you will have to send them in by mail in prepaid envelopes and wait for your funds to be available. The following are some of the institutions that offer interest-bearing checking and savings accounts:

Consumer Protection

If you have a problem with your financial institution, first try to resolve the issue through their customer service department or with a bank officer. If the matter concerns a discrepancy on your statement, time is usually important. Find out how long you have to resolve the situation, and file a written complaint with the bank as soon as possible. If attempts to resolve the issue are unsuccessful, call the Washington State Attorney General’s Office, Consumer Protection Division complaints hotline at 800-551-4636, or visit atg.wa.gov. Another good resource for banking regulations and how to protect yourself from fraud is the Washington State Department of Financial Institutions, which regulates banks, credit unions, mortgage lenders and other financial services providers. You can also file a complaint about a company by calling 877-746-4334 or visiting dfi.wa.gov.

Credit Cards

As soon as you’ve established a new address in Seattle, chances are you’ll start receiving plenty of credit card offers in the mail. In the unlikely event they don’t find you, here are credit card companies you can contact:

  • American Express, 800-528-4800, americanexpress.com
  • Department store credit cards, check at the customer service counter or at the checkout counter, or apply online. Many stores offer a discount on your first purchase, with some restrictions. Department store cards are sometimes easier to qualify for than traditional credit cards, and can be used to establish a credit history if you have none. Seattle-area department stores that offer credit cards include Macy’s (www.macys.com), Nordstrom (www.nordstrom.com), JC Penney (www.jcpenney.net), Sears (www.sears.com), and Target (www.target.com).
  • Diner’s Club International, 800-234-6377, dinersclubinternational.com
  • Discover Card, 800-347-2683, discovercard.com
  • MasterCard and VISA, mastercard.com, usa.visa.com; most banks offer one or both of these two major credit cards, and you can sign up for the card when opening your bank account. However, you may be able to find a more competitive interest rate by shopping around. See Additional Credit Card Resources below.

A word of warning to credit card users: the biggest revenue sources for credit card issuers are penalty charges for late credit card payments. If you want to avoid high finance charges, determine your grace period—the period between the end of a billing cycle and the payment due date—and pay off your balance within this period. For some cards, grace periods have been eliminated (often the case for cards issued with rewards programs, such as university cards or frequent-flyer cards). Another method to calculate finance charges compounds interest daily instead of monthly. Called “daily periodic rate” billing, this may only squeeze a few extra pennies out of you, but they’re still your pennies. Since credit card issuers are always coming up with new ways to improve their profits, be sure to read the fine print in your contract. For additional consumer information, access CardWeb, 239-325-5300, cardweb.com, or the Consumer Action organization, consumer-action.org.

Additional Credit Card Resources

A list of low-rate card issuers can be found on the Internet at CardWeb, the Consumer Action site, Bankrate.com (www.bankrate.com), and iMoneynet.com (www.imoneynet.com).

To see your personal credit report, go to www.annualcreditreport.com. At this site, you can receive a free copy of your credit report from the three main credit bureaus once a year. You can also visit each credit bureau individually:

Prepaid Debit Cards

An alternative to credit cards, and the fastest growing payment method in the United States, is prepaid debit cards. These are cards with a MasterCard or Visa logo that are bought online, at banks, or at retailers like Rite-Aid or Walgreens, and are also called “stored value” cards. You load money on the card, depending on the limits set by the issuer, and use the card the same way you would any debit or credit card. You can reload money at any time, but shop around for the best fees as most cards have a monthly charge, as well as fees, to reload money. For the credit challenged, most of these cards don’t require credit checks. However, because prepaid card use is not reported to major credit card bureaus, they won’t help establish a user’s credit history or credit score, which can make it difficult to get a loan later on. The major advantage of a prepaid debit card is not being able to spend what you don’t have, and some issuers target parents of teens, touting the advantage of using a prepaid card over handing out a cash allowance. The following are some of the better-known prepaid cards:

Taxes

Sales Tax

Washington state residents do not pay a state income tax. Instead, there is a high sales tax (6.5% to 9.5%) that is charged on all purchases other than food and most prescription drugs. The sales tax is a combination of state and local taxes, so the rate varies by municipality and region, but is among the highest in the nation. In Seattle, the combined sales tax rate is 9.5% (6.5% for the state, and 3% for the city and the Regional Transit Authority). After you’ve lived here for a while, you’ll get used to paying more than the listed price for most items.

Federal Income Tax

The IRS’s Live Telephone Assistance, 800-829-1040, is available for consumers with questions and/or in need of forms or help with forms. For free publications about IRS tax services, call 800-829-3676. During tax season, IRS forms are available at local libraries and post offices. You can also find forms online at irs.gov. When filing federal tax forms, the following numbers may be useful:

  • Where’s My Refund?, 800-829-1040
  • Washington State Department of Revenue, 800-647-7706

If you need more help than you think you can get online or over the phone, you can go to a local Taxpayer Assistance Center. While you can call ahead for an appointment, taxpayers are welcome to drop in any time during business hours, from 8:30 a.m. to 4:30 p.m. Centers in the Puget Sound area:

  • Seattle, 915 2nd Ave, 206-220-6015
  • Bellevue, 520 112th Ave NE, 425-456-9637
  • Everett, 3020 Rucker Ave, 425-304-1656
  • Tacoma, 1201 Pacific Ave, 253-428-3518 &

Electronic Income Tax Filing

Record numbers of taxpayers took advantage of e-filing in 2010, according to the IRS. Nearly 99 million people filed their taxes electronically. With tax software, such as TurboTax, widely available, and many online options for filing, e-filing has never been more convenient, or so heavily encouraged by the IRS. The IRS website offers links to authorized providers, payment and direct deposit options, calculators, and more. You can even check the status of your refund online. Telephone filing is no longer available, but in its place is a service called Free File. Companies listed on the IRS site offer free online filing for taxpayers with an adjusted gross income (AGI) of $58,000 or less. Eligibility and services vary from company to company, so be sure to read their guidelines carefully to find out if you qualify and if the services are right for you. Visit irs.gov for more information.

Starting or Moving a Business

When Boeing decided to move its corporate headquarters from Seattle to Chicago in 2001, the company cited traffic, education, and taxes as its top complaints. However, according to the Small Business Survival Index released by the Small Business Survival Committee in 2010, Washington was the fifth most entrepreneur-friendly state, and the Small Business Tax Climate Index ranked Washington 11th best in the United States in 2011. That year, the Seattle-Bellevue-Everett area was 32nd on Inc.com’s national list of Best Large Cities for Doing Business.

Business owners in Washington are subject to a business and occupation (B&O) tax and/or a public utility tax. These are based on the gross receipts of the business and the rates vary depending on the type of business. The tax can be manageable for established companies, but hard on start-up companies that have yet to show a profit. The Washington Alliance for a Competitive Economy notes that business taxes are high, and a 2010 study for the Council on State Taxation found that “state and local business taxes in Washington amount to 5.4 percent of Gross State Product, significantly higher than the U.S. average of 5.0%.” One bright note is that the state lacks a corporate and a personal income tax. An amnesty period between February 1 and April 18, 2011, helped ease the strain on business owners by allowing them to pay their taxes late without incurring penalties or interest.

If you do choose to start a business in Washington, the state has created a simple, one-stop system called the Business Licensing Service that will walk you through the process, with all of the checklists, forms, and resources you’ll need. For details, visit the Department of Revenue at dor.wa.gov, or call 800-647-7706. Other good resources for starting, operating, expanding, or relocating a business within Washington include:

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