4 Things To Do To Survive A Bank Outage—Like Chime’s
Author: Kelly Anne Smith
It’s every consumer’s worst nightmare: A bank outage.
On Wednesday, popular online-only bank Chime experienced an outage, leaving customers without access to their money. According to a company statement on Twitter, Chime’s processor was “experiencing issues,” which caused both its app and website to be down. This is the online-only bank’s second outage since September.
As of Thursday morning, the company stated that card transactions, ATMs and direct deposit notifications were back online, but customers still couldn’t access their account information in the app and website.
Replies from customers varied from frantic to angry, with many stating they had no way to pay bills that were due or that their cards were declined while trying to make purchases.
It’s not just newer fintech companies that have had major outages. Wells Fargo, the nation’s fourth largest bank in terms of assets, experienced a nationwide outage in February. Due to a power outage, customers were unable to access their accounts through online banking or the app for days.
As much as technology enhances our lives, it also has the power to make them come to a screeching halt. For consumers worried about how to handle a future bank outage, here are four steps to take before–or after–you’r unable to access your accounts.
1. Contact Your Creditors
The biggest cause of panic for consumers who can’t access their money could stem from the need to pay bills. If you’re experiencing an outage and are facing the risk of not being able to pay bills on time, the first thing you should do is call the creditors.
It’s important to be calm while explaining what’s going on. Provide any correspondence from your bank related to the outage as proof that you might be unable to pay a bill on time. The creditor might be willing to waive any late fees, or at least work with you to put you on a different payment timeline.
If that proves unsuccessful, keep a record of the late payments. During Wells Fargo’s February outage, the bank offered to reverse any of its own late payment fees during its outage. Presumably, that would be a help if you paid a Wells Fargo credit card late, or bounced a check because your deposit to Wells Fargo wasn’t processed. But that’s not a guarantee to pay fees other creditors might levy on you. Chime did not respond to an inquiry about whether its customers would be reimbursed at all for any fees incurred during the outage.
2. Use Backup Payment Methods, Like PayPal
If your card isn’t working, it might be possible to make purchases with other methods of payment. If you’re in desperate need for a grocery run but don’t have access to your debit card due to a bank outage, you aren’t entirely out of luck.
Money transfer services like PayPal allow consumers to keep an account balance, meaning it doesn’t need to pull funds from your bank account to complete a payment.
The added advantage of PayPal is that it is now the fifth most popular payment method accepted with top retailers, according to Digital Commerce 360, a retail industry publication and research source. Big stores like Target and Walmart now accept it as a method of payment while you are shopping online.
Though you may be locked out of your bank account, you could use your PayPal balance to shop for groceries online and then pick them up in store.
3. Keep an Emergency Fund Elsewhere
Though bank outages are rare, they can have spiral effects, leading to overdrafts, late payment fees, a lack of cash on hand or declined cards. The accumulation of these issues can create a larger financial burden on consumers, causing panic.
Opening an emergency account elsewhere can help ease anxiety if your main bank goes dark. Choosing where to stash an emergency fund follows the same criteria as choosing a primary bank. Think about the fees, and, if you’re keeping a substantial balance in your emergency fund, what interest you can earn on your money.
A growing number of fintech companies are offering cash management accounts paying rates as high as 2% —- and adding debit card services to those accounts. The conventional wisdom is that you build an emergency fund as protection against an unexpected income loss or big expense—a layoff, a car breakdown. But if you’re going to build an emergency fund, why not have it do double duty for tech emergencies too?
4. Have a Credit Card on Hand
If you don’t have an emergency account and need to make purchases fast (and don’t want to deal with the hassle of ordering online and then going into the store), a spare credit card can come in handy.
Having a credit card you keep in a drawer for this type of emergency situation can protect you from being without any financial resources during a bank outage. Before you reach for the plastic, though, make sure you’re equipping yourself with the right one. Using a no-fee card as an emergency lifeline will keep you from taking a hit in annual fees while it sits in your sock drawer. Since you don’t usually use this card, there should be no balance on it, and thus no interest charges will be triggered by your emergency purchases.
Just make sure to pay off any charges right away, preferably as soon as your bank is back in service, before the interest meter starts ticking.