One basic economic survival skill that everybody needs to master in today’s world is the ability to function in today’s economy without a bank account. Everybody needs to do this because it is entirely possible that you will find yourself without a bank account in the near future.
There are several reasons why you need to seriously consider the possibility of not having a bank account. Changes in the banking industry make it harder for working people to get or keep bank accounts. The growing number of fees attached to bank accounts often makes it difficult for average people to maintain one. To make matters worse, it is getting easier for governments and creditors to seize money from a bank account.
Another growing problem is credit scores, which are difficult to improve. Even a minor financial crisis can destroy your credit score and leave you without the ability to open a bank account.
Even many middle class families might find themselves without bank accounts in the near future. This situation isn’t as desperate as it sounds because it is still possible to pay bills, buy and sell online, and to receive your salary in the form of a direct deposit to preloaded credit and debit cards without a bank account or a checking account. It is even possible to get and use a debit card without a bank account.
Alternatives to Bank Accounts
Fortunately there are a number of alternatives that allow you to receive your salary or government benefit even without a bank account. You can use most of these online and at any store that has an electronic card reader. You can also use them to get cash from ATMs and from stores such as supermarkets.
Three excellent cards you can get without a good credit score include:
- AccountNow is a Visa debit card. It has an $8 a month fee, which is cheaper than most bank accounts. You can direct deposit your salary with it and even pay bills. It will actually send out checks to credit card companies, utilities, etc., and make some electronic payments. You can deposit cash in it electronically from any bank account. A big advantage to this card is that you can use it at almost any retail store. Money can also be wired to it.
- Bluebird is a similar product to AccountNow that is offered by American Express and Walmart. Money can be loaded to it at any Walmart store, and electronic bill payment is available. Funds can also be deposited from any bank account. It offers many features similar to bank accounts, including online account management and bill payment. A disadvantage is that it is an American Express card, so many merchants don’t take it. Another drawback for rural residents is that American Express will not ship it to P.O. boxes. You will need to have a street address as your mailing address. The fact that Walmart is offering this product is pretty frightening. The retail giant has obviously concluded that large numbers of Americans are going to be without bank accounts in the near future and is moving to take advantage.
- PayPal Debit cards. If you have a PayPal account, there is a debit card available. No credit check is needed. You will only be able to spend the funds in your PayPal account with it. One advantage to this is that you can use funds generated by your online business at stores and get cash. PayPal and Discover are also developing a more sophisticated variety.
These cards will allow you to take advantage of services normally associated with bank accounts without needing to have a bank account. You will need these if you want to do things like pay utility, insurance, or mortgage bills. These services are cheaper than money orders and wiring money.
Another advantage to these cards is that you can avoid check-cashing outlets, which often charge high fees. Instead, you can get the funds directly deposited.
Some Other Hints for Living without a Bank Account
You will have to learn how to do some basic day-to-day activities in a different way without a bank account. A perfect example is cashing a check.
There are ways to avoid paying a high fee when you cash a check. A good one is to simply sign the check over to a friend or relative who has a bank account. Another is to talk to business owners; some business owners, especially mom-and-pop convenience store owners, will cash payroll checks for a person that they know and trust. They’ll sometimes do this for a smaller fee than check-cashing chains will charge.
Many supermarkets will cash checks at a lower rate than the check cashing chains. Simply go to the service desk at the market and ask. You can also take the check to the bank that issued it; a bank will have to honor a check issued by its depositors. However, they will probably charge a fee if you don’t have an account there.
Another is paying bills. The cheapest and easiest way to do this is to take advantage of cards like Bluebird or AccountNow. See above for details on these; you can set them up without a bank account even if you have a poor credit score. Another advantage to these cards is that you can get your salary direct-deposited and avoid the hassle of check cashing.
Living on a Cash Basis
Some people will wonder why not to just use cash. There are several reasons for this: the first is that if physical cash is destroyed or stolen, it is gone. If somebody picks your pocket or a burglar finds the cash under the mattress, any cash swiped is gone. If that’s all you have, you’re in trouble.
Another drawback that many people don’t think about is that carrying around a lot of cash is putting out an open invitation to the criminal element. Crooks notice who has cash and who doesn’t. If you carry a lot of cash on the street, you’re sending an invitation to muggers and drug addicts.
Storing a lot of cash at home is dangerous because it is an invitation to a home invasion robbery. Even if you have guns, this isn’t a very pleasant thing to experience. Something to think about is do you really want your children caught in the cross fire between you and an armed bandit?
Criminals that see you with a lot of cash might conclude that you have drugs or stolen property in your home. That will make you a potential target for armed robbery. Armed robbers like to target other crooks because they cannot call the police for help.
If you keep a lot of cash at home, store it in a well-hidden safe and only tell a few people who you really trust about the cash and where it is. Don’t tell young children or teenagers about the safe and the cash because they may inadvertently talk about it.
Try and Get a Bank Account
One final thought here: Try to get and keep a bank account if you can. Although there are some risks associated with bank accounts (such a possible government seizure), there are also some big advantages. You can electronically deposit money in them, and they are insured by the FDIC. If you can open a bank account right now, open one or two extra accounts so that you can have options if you have to close one.
A good way to get an extra bank account is to open an online account through Capital One or American Express. These can give you a basic savings account that offers such features as FDIC deposit insurance. Something to remember is that you can always transfer money from such an account to a product like AccountNow or Bluebird if you have to.
If you cannot open a bank account, keep trying; there are some banks that let persons with low credit scores open accounts. These often charge higher fees, but it can be worth it.
Everybody, whether you are a prepper or not, needs to think about living without a bank account because it’s a nightmare that almost anyone can face in today’s world. The best way to face this problem is to think about it before it occurs.