are banks too expensive to use?
I was a teller there.
Joe, my manager and I are both wearing red polo wholesale t shirts wholesale with the check Center logo.
Joe used this time to tell me how to sell prepaid cards-
A reloadable cash card that operates like a debit card but does not link to a bank account-to customers.
\"If they pay a bunch of bills with this card and pay a dollar or two, they \'d better get the monthly plan for $9. 95,” he said.
Many prepaid cards charge the user every time they load the money into the user\'s card or use the prepaid card to pay the fee.
\"Why don\'t they use a checking account? ” I asked.
\"There is less trouble and there is no overdraft fee,\" he explained . \".
He opened his wallet.
\"I have three prepaid cards --
Buy things and pay bills. One for saving.
And one of them is my music.
\"I\'m actually a professor of urban policy at the New School in New York.
I went to the inspection center to work and before that I worked at RiteCheck in South Bronx (
Both families are very small. run chains)
To understand why so many people use cheque cash and payday lenders, prepaid cards, and loan and savings circles, not banks.
According to a new federal deposit insurance company report released on Wednesday, 25 million Americans were not deposited in banks in 2013.
They don\'t have a bank account at all.
68 million of the bank accounts are \"inadequate\": they have bank accounts, but they also rely on such alternative financial services.
At the same time, policy makers continue to insist that we all need bank accounts.
They believe that banks are safer and cheaper than other options, and that bank accounts mean stability.
They have a point: if you don\'t have a bank account and a credit card, it\'s hard to build a credit score, and now, a credit score affects a person\'s ability to rent a house or find a job.
Informal savings are more risky than savings in banks.
But my clients don\'t see themselves the way policy makers do.
They chose to use alternative and informal financial services because they found that banks were more expensive, more chaotic, and had fewer services --oriented.
Many of my clients complain about the rising bank charges.
From 2010 to 2011, the average monthly service charge for checking accounts increased by 25% per cent in just one year.
Only 39% are not interested.
The checking account was free in 2011, down from 76% in 2009.
The average overdraft fee is now $32. 74.
My customers are part of nearly half of the hard-working Americans who range from salary to salary and cannot afford to pay $2,000 in an emergency.
RiteCheck\'s regulars Zeke told me that he had a bank account before but was closed shortly after losing his job as an assistant chef at JFK International Airport.
Zek is now the doorman and hopes he will go to college one day.
When he is short of money, he will use usury.
\"I want to go back to the bank, but I can\'t afford to pay for it every month,\" he told me . \".
Even some people with relatively stable financial conditions have come to the same conclusion.
As part of my research, one of the professors I interviewed told me what happened when he opened his savings account with his daughter: \"We saved $50 and I had an idea, we deposit money at the bank every month.
We will watch money grow together with interest.
His plan was unsuccessful.
\"Next month, we\'ll go back and pay a deposit. look, there\'s only $45 on the account.
As a result, banks charge for low balances. End of lesson.
He had the Bank return $5 and closed her accountand his own.
High fees are also charged by cheque cashing and payday lenders-
In New York State, 1.
98% of the face value of the cash cheque and the annual percentage rate or. P. R.
, 200 between 14-500%-day loan.
But RiteCheck\'s money order is cheaper than the Post Office\'s.
If you think bank account overdraft is short term
Term Loan, 7-
There will be A on the day loan. P. R.
More than 5,000.
People pay these because they have no choice, and because they need their money as soon as they get it.
When I asked the customers of Check Center and RiteCheck how they saved money, an interesting option I heard, especially from Latino immigrants, was to take turns savings and credit associations
Informal groups started by community members themselves.
These include 10 to 15 people, each contributing the same amount to the pool each week;
One member gets the whole pot every week.
A young man from Mexico told me that he had a Chase account, but he preferred to keep it in a group organized by his mother, a friend who played football.
The nonprofit Mission Asset Fund formalizes these rotating savings associations so that participants can build credit scores and save safely.
In 2011, 6% of the population aged 15 and older in the United States was deposited in informal lending groups.
Why do decision makers not pay attention to these practices?
After years of debate about \"undeposited banks\", it is time for policy makers to rethink the issue.
The problem is not that people do not have bank deposits, but that banks become too expensive for people to use banks.
The financial Clinic, a financial counseling non-profit organization with 15,000 customers, once listed \"reducing the use of alternative financial services/increasing the use of banks\" as one of its success measures. Not anymore.
\"When I sat down and looked at my client\'s bank statements and found out they had paid $110, I often sent them to the check cabinet, mae Watson Grote, executive director of the financial Clinic, told me.
Is using a bank really good for financial health?
For more and more people, the answer is No.
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