Is it not shocking? A bank account seems to be a natural part of life, but not according to the statistics. According to the records of the FDIC, nearly 51 million Americans are under banked and they use secondary financial services for their needs. A major portion of this group constitutes of poor or low-wage workers who do not have sufficient money to manage a bank account. However, this is not the only reason for people not having a bank account.
Why consumers don’t have a bank account?
- Being a young consumer: The research has shown that nearly 50 percent of the young generation between the age of 18 and 24 are under-banked. With the flat job market and comparatively low income at the beginning of the career, it is natural to avoid having a bank account. Moreover, a large number of students/youngsters use debit/credit cards linked to their parents accounts and do not maintain an individual bank account. Some young consumers avoid a bank account because of the overdraft and similar services fee.
- Saving on bank fees: According to the FDIC, some of the unbanked households even blame bank fees for withdrawing their accounts. It has more to do with the transparency in banking charges instead of the cost. The consumers often feel that they have been overcharged for services or unexplained fee deductions. People often turn to alternative financial services and end up paying even higher charges.
- Blacklisted consumers by major banks: Opening a bank account feels like a breeze and all you need is money and some personal information papers. However, the past few years have seen a large number of consumers being blacklisted because of a background check failure. Banks have become cautious and monitors every financial mistake of their consumers. However, these consumers still have the opportunity to approach credit unions or local banks for secondary checking accounts.
- Trick to avoid debt collectors: Sometimes, people even close bank accounts to dodge debt collectors and lien payments. However, people often forget that their account information may lead to their place of employment or residence and even disclose other assets owned by the debtor. The best advice for such consumers is to use prepaid cards and avoid using credit cards as far as possible.
- Unemployed personnel: In some cases, individuals might opt to close their bank accounts because of unemployment. The economic slump has had an everlasting effect on our economy and it left the unemployment rate at an all time high. The key is to use banks with low minimum balance and comparatively lesser service charges. You can shift to an affordable bank and maintain a healthy banking history.