banking

6 reasons to be unbanked or underbanked

You're fed-up with fees
You're fed-up with fees © alexskopje/Shutterstock.com

Nobody likes fees, but according to a Pew study, one-third of the households that left banks altogether did so because of unexpected or unexplained fees. At the same time, data from the FDIC show that although recently unbanked households may cite fees as a key reason for leaving the banking system, only about 5 percent of the unbanked population, many of whom have been unbanked for years, see the cost of banking as the primary obstacle in account ownership. In other words, fees matter, but they're typically further down the list in terms of why some consumers are unbanked or underbanked, Filene's Hofheimer says.

But the fees issue might actually have more to do with transparency than the cost of banking.

"Transparency is key. Some consumers feel as if traditional providers trick them into fees, while alternative financial services providers are perceived as more open," Hofheimer says. "(But) alternative financial services providers definitely have fees, which are usually higher."

In practice, fees may be unavoidable. Sosa says consumers are better served by closely examining fees and fee structures rather than looking for free financial services, which typically turn out to be too good to be true.

advertisement

Show Bankrate's community sharing policy
          Connect with us
advertisement
CD & INVESTING NEWSLETTER

Learn the latest trends that will help grow your portfolio, plus tips on investing strategies. Delivered weekly.

Ask Dr. Don

How can I find best savings options?

Dear Dr. Don, Where can I get the best and safest savings rates? I feel like I need to do a better job of saving and want to get a good return on my money. -- Walter Wonders Dear Walter, That's the kind of question... Read more

advertisement
Partner Center
advertisement

Connect with us