With what seems like the daily rising costs from banks just to keep your money for you, is it really worth it to keep your money in the bank any more? According to a new study done by Javelin Strategy & Research, underbanked (people without checking accounts that still utilize other services such as money orders and prepaid credit/debit cards) in the U.S. to total around 35 million adults, about 15% of the population. So how do these people manage without a bank account and why would you not have a bank account?
When you should ditch your bank account:
Everyone knows the benefits of keeping your money in a bank; it’s safe, the account is insured, you can keep track of your money, but traditional bank accounts are not right for everyone. If you find yourself in debt and you believe that your best protection against having your funds frozen or levied by a creditor is to not have a bank account then look to other options. If you simply do not want to pay fees for someone to hold your money, and maybe you are having trouble keeping the minimum balance or you are finding yourself paying overdraft and other fees then perhaps the answer is to close your bank account and look into one of the following ways to manage without a bank account.
-Prepaid credit /debit cards are becoming the wave of the future. You can even have your paycheck or government assistance directly deposited onto a prepaid debit card. However, this only applies to specific cards such as ACE Elite from Visa and BuyRIGHT from MasterCard (this card also gives you rewards on things like iTunes and Starbucks). A few cards carry no monthly fees, but make sure to read the terms and conditions to confirm that there are none and that there is no required minimum balance. PerkStreet Financial MasterCard Debit Card and Western Union MoneyWise Prepaid MasterCard have no monthly fee.
-Cash your paycheck and use cash. If you just need to get your checks cashed, you can use a check cashing service. We suggest you visit your local Western Union or Walmart for this. Do remember that these types of services come with fee (usually around $3-$6 at Walmart, but it can also depend on how much the check is for).
-Use money orders to pay rent or bills. If you need to write a check to pay a bill that you can’t pay online with your pre paid debit card, such as rent, or even if you need to write a personal check, you can go to the post office and get a money order. Money orders from the post office cost under two dollars (varies depending on how much money the money order is for). Money orders are a great option for payments other than using cash.
-Online payment services. Consider a service such as PayPal to make online orders. PayPal links to an existing credit card or bank account so you will need a credit card to create an account. Paypal can also receive funds. Make sure to read the terms and conditions because there are some fees associated with certain PayPal transactions.
If you need to close your bank account, or are unable to open one, don’t panic! You can survive without a bank account! Make sure you do your research and compare non-bank account services and cards to make sure that you are getting the best deal!