Are You Unbanked?

Jan 30, 2012
Arlene Lagos

Are You Unbanked? - Bing Images

Millions of Americans are living without a bank account. They are called the "unbanked". Can you survive without a bank account? Let me show you how.

Are You Unbanked?

Surviving Without a Bank Account

According to Merriam-Webster, “The word unbanked means "not deposited in a bank'". However, the word has taken on an identity of its own as the growing number of citizens in this country either cannot or choose not to have their own bank account. If you fall into this category, then you are not alone. According to a survey completed by the Federal Deposit Insurance Commission (FDIC) in 2009, 7.7% of American households are considered "unbanked", and that number has increased over the last three years.

So why would over 9 million families choose to go without a standard checking or savings account? For some it’s the fear of mounting overdraft fees and debit cards fees causing them to leave their banker and seek an alternative. Many go the route of pre-paid debit cards, while others are voluntarily switching over to not-for-profit credit unions as suggested by the political initiative known as “Bank Transfer Day” . Finding yourself without a bank can seem scary especially if it is currently your only option. Here are some tips on how you can survive without your bank.

Obtaining a pre-paid debit card is a good start. They cost anywhere from $4.95 – $6.95 to purchase, and you can load cash onto them as often as you want in increments of $500 at a time. A few weeks after you purchase your card, one will come in the mail with your name on it. But, now you still have to find a way to cash your checks in order to have money to load on your card!

Cashing a check without a bank account can be a hassle. Nowadays, banks will charge anywhere from $5 to $7 if you don’t have an account with them even if the check is from their bank! If it is a payroll or government check, you can cash it at any Wal-Mart for a few dollars depending on the amount of the check. If it is handwritten, you will unfortunately have to go to the bank it is from and hope their fees are low.

The good news is that most pre-paid debit cards now offer direct deposit programs so you don’t have to run around trying to cash your check or pay a fee for it! Also, for many programs if you load at least a $1,000 a month on your card, you won’t have to pay any fees. Your pre-paid debit cards often have a Visa or MasterCard logo on them so they can be used at any ATM for withdrawing funds and are accepted virtually anywhere. You have easy access to your daily balance online and can even use it to pay bills or shop online.

What if mom and dad want to send you a check in the mail for your birthday? Tell them it would be easier if they sent you a pre-paid gift card so you won’t have to run around trying to cash it. Need to pay bills that don’t accept credit card payments? There are many places that charge anywhere from .69 to .99 cents for money orders with values up to $500. This may seem like a lot of running around, but at the end of the day you are only spending what you have and not a penny more. With a pre-paid card, there’s a satisfaction in knowing that you are in control of your money. You don’t pay any interest, late fees or overdraft fees. With a prepaid card you only spend what you’ve decided to load onto the card. You don’t overspend.