You're a young consumer
Your age is a key indicator of banking status. According to FDIC data, about half of young people between 18 and 24 are unbanked or underbanked.
"Intuitively, it makes sense since they are just getting started in life," Hofheimer says. "Factor in recent macroeconomic trends which have been especially harsh on (the young), such as student debt and a flat jobs market, and you have a potent combination."
It's a trend that concerns Weiss. "Most of my students are preconditioned to using debit cards that are linked to the checking accounts they and their parents set up as a means for funneling cash back and forth," he says. A sizable percentage have also been hit with overdraft and other service fees. Put these two together -- debit cards and fees -- and it's a short leap to prepaid debit cards that end up costing as much, if not more.
Even worse, many young people also use "account advance" and "bill pay" loans, which Weiss considers "borderline predatory." Typically, with those products, the fees and interest may look small upfront, but oftentimes the annual percentage rate ends up being 120 percent or more.