Are you “Unbanked”?

21 09 2012

According to a recent article on CNN Money, nearly 10 million households across the country are living without a bank account.  Areas where the largest percentage of residents do not have bank accounts also have been found to have the largest percentage of low-income poverty stricken regions.

Odysseas Papadimitriou, CEO of CardHub.com says this is not a coincidence: “Wherever you see high poverty and low-income populations, you will see higher populations of unbanked.”

Most low-income families are not able to keep a high balance in their checking accounts or pay monthly fees, so they prefer to not have that type of an account.  Their alternatives can be costly and fee-ridden as well though.

Check-cashers, payday loans, tax refund anticipation loans or money orders all have fees associated with them.  Prepaid cards are also becoming more and more popular, like the GreenDot card.  However, even these cards have fees which can range on a “per transaction” basis of $.50 to monthly fees of $9.95.

In the last two years, the percentage on “unbanked” has increased from 7.7% to 8.2%.  Perhaps checking accounts could be offered that have absolute basic features at lower fees or even free.  It wasn’t that long ago that a standard checking account was offered for free at most retail finance institutions.

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