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Why no checking account?

By Marcie Geffner ·
Wednesday, June 27, 2012
Posted: 6 am ET

In keeping with a longer-term trend, the percentage of U.S. households that didn't have any type of checking account declined during a four-year period at the close of the last decade, according to a June 2012 Federal Reserve Bulletin, "Changes in U.S. Family Finances from 2007 to 2010: Evidence from the Survey of Consumer Finances."

In 2010, the most recent year in the survey, 9.6 percent of U.S. households reported that they didn't have any type of checking account. In 2007, that figure was 10.3 percent. In 1989, it was 18.7 percent.

So, why didn't these households have a checking account?

The most commonly reported reason was that they didn't like dealing with banks. That answer was chosen by 27.8 percent of the accountless households, a proportion that has risen steadily since 1989, the survey noted.

Slightly more than 20 percent of that group said they didn't write enough checks to warrant having a checking account. This reason had been the most frequently reported in each year prior to 2007.

Another 10.6 percent said service charges were too high. Slightly more than 4 percent said they had no checking account due to credit problems.

Among the households that lacked a checking account in 2010, slightly more than half had had a checking account in a prior year.

Moreover, the proportions of these households that later reported that they didn't have enough money to have an account, didn't write enough checks or didn't need or want an account rose in 2010. Those increases were offset, however, by decreases in the proportions who said they'd had credit problems, disliked dealing with banks or couldn't manage or balance a checking account.

The survey also asked those who had a checking account why they chose the financial institution that provided the account for them.

In 2010, 46 percent said they chose the institution due to reasons related to its office locations. Slightly more than 16 percent wanted to obtain many services at one place, and 14.2 percent based their choice on low fees or minimum balance requirements.

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