How to be Unbanked With Style
We typically associate those without bank accounts with young kids or poor families, but the truth of the matter is slowly changing as increasing amounts of people do not see the services provided by banks as useful, or as too expensive, or they simply do not trust banks. Banks comprise one of the least upstanding industries in the US, and one of the shadiest legal industries. Banks are on the same level as the arm’s trade. In today’s expanding global village, there are ways around the bank. Here’s why and how to be unbanked with style.
Almost ten million households in the US are living devoid of a bank account. In some sates, these residents are a considerable sector of the population. The South has the largest percentage of residents who currently are “unbanked,” meaning they do not have a checking or savings account. An FDIC report released this week indicates that 10% of the region’s population does not have a bank account. This makes sense not only from a poverty perspective, but also from the perspective that the South has historically been skeptical of big industry from the North, especially New York. The national average of unbanked is 8.2%. The South makes up 37% of US households and 46% of all unbanked households.
Households report that they don’t have a bank account because they don’t have the funds to open one just 33% of the time, meaning that 67% of the time households are merely abstaining from the banking system and could presumably fund an account. 21% of households say they do not need or want an account, and 7.5% of households said they don’t trust the banks, while 5.4% said that bank account fees or minimum balance requirements are too high.
There can be no mistake that the overwhelming majority of individuals who do not trust the banking system have a bank account. These folks have quite a bit to learn from those who say they simply do not want or need a bank account.
Fees for alternative financial services such as check-cashers, payday loans, tax refund anticipation loans or money orders can be higher than monthly bank account fees, but with overdraft fees at $35 a pop, in many cases it is a crapshoot. Bank customers were charged nearly $30 billion dollars last year in fees by their banks. Some of the unbanked have moved into prepaid cards, which can be low-cost alternative to traditional bank-issued debit cards as long as you’re careful of the one’s with high fees.
Although the mainstream media would lead you to believe that lack of money is the main reason people are unbanked, the truth is that many people believe they do not need an account, others don’t want one, and others don’t trust banks or believe that fees and minimum balance requirements are too high.
Approximately 28% of households earning less than $15,000 don’t have bank accounts. 22% of foreign-born non-citizens, 21% of black households and 20% of Hispanic households are unbanked. Nearly 23% of households with unemployed family members and 19% of families led by a single mother are unbanked. The national unbanked rate has risen from 7.7% in 2009 to 8.2% in 2011. That means that one in 12 households are unbanked.
In the last year, one-quarter of households have used at least one form of alternative financial service such as money order, check cashing service, tax refund anticipation loan, pawn shop, money-transfer service or payday loan. Others use only cash, while many are also using prepaid cards. Upwards of 18% of households without bank accounts reported using a prepaid card, an increase over the 12% of 2009.
On top of the one in 12 Americans who don’t have a bank account, there’s the group known as the underbanked. These are individuals who have bank accounts but prefer alternative ways of getting cash, either because it is quicker to use an alternative or because they find bank accounts to be more expensive. About one in every five households is considered underbanked, making up 20.1%, or 24 million, US households, according to the FDIC. That compares to 2009′s rate of 18.2%.
In all, more than one in four US households, or 28.3%, are unbanked or underbanked.
In order to exist as a full functioning businessman or individual in bank-run civilization one does not necessarily need a bank account. At the end of the day, dealing with the mainstream financial system is more of a burden than a convenience. Banks are undercapitalized and are held to strict anti-terrorist laws such as Know Your Customers regulations wherein banks must collect every detail they can about you. Many also charge you on your cash deposits. So, not only do they consider your deposit a part of their bank’s capital, but they also charge you for capitalizing them, instead of vice versa. Tellers begin prying about where the money is going before you’re slapped with the fees, rendering your personal privacy null-and-void. When individuals go to empty out a bank account, they are often times talked to for extensive lengths of times about why they should not take their money away from a big bank.
Today, however, the question is why would one stay with a big bank.
Our money is sourced from our labor, which means that it is oft our employers who pay us. The best way to get paid today is not by being a wage slave reporting day-in and day-out for paltry hourly wages with burdensome taxes. Rather, it is much more rewarding being self-employed and contracting out yourself. If this is the position in which you find yourself, ask for cash. The three ideal ways of transacting business in the modern age are such: cash, precious metals and bitcoin.
Although the shiny precious metals’ can be hard to part with, if you convince yourself they are merely a joint checking and savings account, you can keep your metals wherever you feel comfortable and, because demand is so high for them, easily get rid of them when need be. The best way of doing this would be to call up a friend or acquaintance and meet over a drink or food and do the transaction in public. Avoid bullion shops, especially those with top-of-the-line security systems, as you could lose an element of privacy by conducting business there.
There’s today no reason to worry about your account balance for any other sake than the account balance. Nobody wants to get that phone call when the bank calls you for not having enough money – you know, insufficient funds. Of course, at that point, we ourselves find our own funds to be grossly insufficient, and must thank the bank for calling to rub it in and ask them what they want. “Look bank, I am not broke to f*ck with you.” As far as getting out of the fees charged for not having any money to pay for the fees, that’s much more difficult.
Circumvent the financial system. Let the bank call you about your insufficient funds, not because you are actually suffering insufficient funds, but because you have your money elsewhere, where it cannot be seen. Be unbanked with style.