5 Reasons Why Many Families Don’t Have a Bank Account

In this modern era, it seems like banks are as common as payday loan locations. But it might be surprising to learn that not everyone does business with a bank on a regular basis. According to a Federal Reserve study, about one in 12 families does not maintain a bank account. The stories behind this statistic can vary from family to family. But there are five main reasons why many of them don’t have an account.

• Fear of making a costly mistake: No one likes to make mistakes. Yes, people will say we learn from our errors. However, when you make a mistake with a bank account, it may end up costing you money – and lots of it. When balancing a checking account, it’s easy to get confused and add the debits to the assets. The wrong total may result in being overdrawn and having to pay penalties every time a check is returned for insufficient funds. If you make too many mistakes, the bank could close your account.
• Not enough money: Many people live paycheck to paycheck. Some of them actually make so little money that they need banks only to cash their paychecks. Their available funds are so small that they actually may pay more than they can afford for the privilege of keeping money in a bank. Banking without fees is usually reserved for customers with assets that are large enough to require regular services by the bank. For those with little money, the fees they must pay can add up fast and end up being too pricey.
• No convenient bank locations: It seems that a wide variety of banks are a short drive away from home. If there is no car to get there, however, the choices become a lot fewer. Usually that means the person ends up picking the closest bank with no consideration whether services are what he or she needs. But if the closest bank is a long walk or a long bus ride away, using a bank becomes too inconvenient and perhaps out of the question altogether.
• Not in the country legally: To open an account, a bank teller or other employee will ask for identification to help verify you really are the person whose name will be linked to the account. These types of identification usually are driver’s licenses or passports. For someone who is not in the country legally, those are impossible to get. No I.D., no account.
• Do not like dealing with banks: As banks merge and get bigger, people feel they are just numbers to these institutions. Personal greetings become something for the regular customer. And when you need to conduct business on the phone, it can be even worse. If there is a need to borrow money, some people will choose the personal attention they receive when they get a payday loan.