Think Bank Fees Are Bad? Try Living Without a Bank

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One writer recently spent a month avoiding banks: She paid bills with money orders, used prepaid cash cards for everyday expenses, and cashed her paychecks at check-cashing stores. Oh, and she paid a total of $93 in fees during her bank-free experiment.

The writer, Candice Choi, covers personal finance for the AP. Most of her $93 in fees came from her two visits to check-cashing stores, which charged her a total of $56.

She also paid $34 for the use of prepaid cash cards. Why did she opt to use cash cards rather than, um, cash? It’s not entirely clear. I guess she did it because plenty of American consumers use these cards—to the tune of $37 billion this year. These cards are said to be as convenient to use as a debit card or cash, only prepaid cards are riddled with fees. Choi writes:

The first card I bought, a NexisCard, was the only option at the check-cashing place I pass everyday in my neighborhood on Manhattan’s West Side. I had to pay a $1 fee for each purchase. If I used the PIN code to authorize a purchase, it was $1.50. And if I wanted cash back at the register, it was $1.95. The card could also be used at bank ATMs for a fee. That’s on top of the fee the bank charges for out-of-network cards. I did this just once for a total cost of $5.

So basically, you pay cash so that you can have a card that’s as convenient as cash. To me, these prepaid cards rank right up there gift cards: They’re as good as cash, only they cost more and generally wind up getting you less. Which means they’re really not as good as cash.

Read more:
Why Lots of People Trust Pawn Shops and Check-Cashing Operations More Than Banks