“Unbanked” now has its own entry in Wikipedia, with the following unfuzzed definition:
The unbanked are adults who do not have their own bank accounts. Along with the underbanked, they may rely on alternative financial services for their financial needs, where these are available.
I have had a tendency to conflate “unbanked” and “underbanked,” which I suppose I should quit doing. If you’re underbanked, this is what your life is like:
The underbanked are people or businesses that have poor access to mainstream financial services normally offered by retail banks. The underbanked can be characterized by a strong reliance on non-traditional forms of finance and micro-finance often associated with disadvantaged and the poor, such as cheque cashers, loan sharks and pawnbrokers.
I demur on one count: loan sharks are hardly “non-traditional.” (Neither are pawnbrokers, come to think of it.)
And one possible reason to remain unbanked, underbanked, debanked, or whatever, is the continuing increase in retail bank fees. Since the end of 2013:
- The average monthly maintenance fee has risen by 15 cents, to $12.69. This means that it costs the average customer more than $150 a year just to keep a checking account.
- There are fewer free checking accounts, defined as those with no monthly maintenance fees. The percentage of checking accounts with no such fees dropped by about 1.5 percentage points, to 28 percent. This is the lowest percentage of free checking accounts measured by the survey since it began in 2009.
- The average minimum balance required to qualify for a waiver of the monthly maintenance fee rose by $724.69, to $5,440.
And then we wonder why people are dealing with the likes of Green Dot. Of course, we also look down our noses at these folks, mostly because their demand for services means that, holy Hannah, they’ve opened up a check-cashing place where the florist used to be.
My monthly maintenance fee, I am told — I had to look it up — is $15. (It’s waived for the foreseeable future.) If I had to deal with that kind of fee, I’d be sorely tempted to move everything to an unbank (underbank?) like American Express Serve. Then again, I do a little more (but not much more) research than J. Random Consumer; if I’d done much more, you’d probably have seen the words “credit union” in here somewhere.