Banking without a Bank
Posted by | Posted in Credit Report | Posted on 10-10-2010
A recent federal study discovered that approximately 25% of U.S. households perform banking services without a bank. Many of these households, which net under $30,000 annually, utilize currency exchanges, check-cashing outlets, drug stores and payday loan operations for everyday financial transactions.So, what’s the problem with that, many would ask. The problem is the high and unregulated fees that are associated with these normal transactions, fees many times higher than those a bank would charge (or perform for free).Candice Choi, of The Associated Press, eschewed her normal bank-based transactions, turning to those institutions frequented by the less affluent and, often, non-English speaking peers. Individuals with a history of bad checks or a low credit rating may also encounter difficulties opening bank accounts. Following is what Ms Choi discovered: it cost $28 to cash a paycheck and $1.50 for a money order (to pay the rent). The biggest shock/scam may surround the use of prepaid cash cards that function like debit cards; Americans are expected to put $37 million on these cards, twice the amount as last year and four times that of 2008. Choi noticed a minimum of $1 per swipe of these cards, a dollar/minute charge to speak with a service representative and a $5 charge to reload the card with additional money. In the writer’s month-long test, she spent $93 to spend her own money. A lot of money for anyone; a fortune for those eking out a living.Another downside to living without banking services, “When you don’t have a bank, you spend a lot more time managing your money.” Imagine no direct deposit of pay checks and no automatic bill-paying services. Standing in long, snaking lines and writing numerous checks are tasks with which many Americans no longer deal. The sooner one recognizes the need to file a bankruptcy and files the case, the faster they can rebuild and open bank accounts and avoid excessive fees paid to these non-banks for services. Another reason to make sure your credit score remains as high as possible and another reason to seek out the reliable advice of a Legal Helpers attorney if you are thinking about filing for Chapter 7 or Chapter 13 personal bankruptcy. If you are unable to pay your ever-mounting credit card, school, medical and other debts, filing bankruptcy may be a way to get a new financial start. .
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