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The Real Reason The Poor Go Without Bank Accounts

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Re: The Real Reason The Poor Go Without Bank Accounts

#171

Post by dizzystar »

steveklabnik wrote: post #126
bilbo0s wrote: post #108

Earlier quoted context omitted.

I only ever ASKED one poor person why they didn't have a bank account. A young mother of a student at a middle school I do work with. She has three kids and one month she was hit with fees for a) having less than a prescribed amount in her bank account. and b) writing a bad check. (Ironically, a check that was bad because of the fee taken for 'a'). Now for her, going to Walmart every month and putting her earnings on…

> (Ironically, a check that was bad because of the fee taken for 'a') This is a real big problem in these kinds of situations. To give you an idea of how this happens: when I was in college, I worked at a pizza shop. It was Thursday. I got paid Friday. I thought I had $20 in my bank account, but I didn't realize that day was the day that my World of Warcraft subscription was up, and that was $15. During the course of…

Came here to post something on the order of this. One time I was nailed for > $250 and the correct ordering would have been only one overdraft for about 30cents and a penalty of $35. I was working at a min-wage job at the time and taking home less than $200/week. I lost over a week and a half of pay to the bank, couldn't afford to pay rent and had to leave my place. I got slammed less than two weeks later and that pretty much finished me. Situations like this happened to me a few times and happened quite often to a few friends I had. I walked into the bank and told them I wanted overdraft protection or they can close my account. They refused and I haven't had an account since then. I'm still on chex systems over that snafu, but why would I pay them for money I never had or used?

Banks are just awful things for people who are poor. There really isn't much point when you live payday to payday and you have zero dollars by the time payday comes.

You have to pay $3 for ATM fees and you may forget exactly what you have in the account, overdraft by $1, and then get hit by $150 overdraft fees. It would be helpful if the ATM showed the real amount of money left on the cards, but no, they showed one number then another number the next day.

I still don't know what banks can do for me, but I thought the idea was a safe haven to keep and save your money. All I've experienced are predators who take my money and then refuse me basic services.

As for the reason for reordering, since I didn't use it for anything high priority, they couldn't use that story on me. The bank blamed the merchants and the way that the system ordered the money. I cried foul, saying that I can't believe that a bank, who's singular expertise is managing money, can't figure out how to add and subtract a few numbers.

As an experiment, try this for three months: Open up a bank account, put $150 in it and use it for paying for the bus, your food, clothes, soap, shavers or whatever expense you may need. Of course, if you get hit by the overdraft, you can't pay it. The next month, put $150 in the account and live off that minus the overdraft fees. See if you can manage it and then come back and tell me poor people are making a stupid choice by keeping the money in their wallet.

Re: The Real Reason The Poor Go Without Bank Accounts

#172

Post by NovemberWest »

JEVLON wrote: post #170
sdolan805 wrote: post #109

My friend had $150k in his bank account that was taken by the IRS while they were still in negotiations on a huge tax bill. No notification, no nothing. He only found out after he was trying to buy groceries and his card was declined. After it was all said and done he ended up owing the IRS ~$14k and they gave him a check for the difference, but it took months to get it all sorted out. I lent him some money to get hi…

I heard of a guy that did that and his ex girlfriend told her new gangster boyfriend (real gangster) where he kept the money. It's probably safer to keep your money in the bank.

It is generally safer to not tell your secrets to people who have reason to be vindictive. If it hadn't been his stash, it would have been something else.

Re: The Real Reason The Poor Go Without Bank Accounts

#173

Post by BrandonMarc »

sliverstorm wrote: post #149
easong wrote: post #147

Earlier quoted context omitted.

I moved around every month or two during college, because it allowed me to constantly lower my rent in a very expensive area, and saved thousands of dollars. I recently moved to Palo Alto for work, and got in a minor motorcycle accident that left my bike out of commission for several months. Fully experiencing bay area traffic for the first time, I was pretty annoyed, so I went into 1. my national bank of multiple ye…

I can only imagine they denied you because they were not confident they could find you if you defaulted, which is different from your risk of default.

... or, perhaps, find the bike (collateral) to repossess it.

Re: The Real Reason The Poor Go Without Bank Accounts

#174

Post by antoncohen »

For those in San Francisco the city/county government has setup "Bank on San Francisco" to help people use regular banks instead of check cashing places. They have partnerships with banks that allow people to get bank accounts even if they have had trouble in the past. http://www.bankonsf.org/

Bank on SF also has a small dollar loan program called Payday Plus SF. Their partners offer payday loans at reasonable rates (max 18% APR). http://paydayplussf.org/

I know they don't address a lot of the issues the article brought up, but they could be useful for people in certain situations.

Re: The Real Reason The Poor Go Without Bank Accounts

#175

Post by protomyth »

steveklabnik wrote: post #126
bilbo0s wrote: post #108

Earlier quoted context omitted.

I only ever ASKED one poor person why they didn't have a bank account. A young mother of a student at a middle school I do work with. She has three kids and one month she was hit with fees for a) having less than a prescribed amount in her bank account. and b) writing a bad check. (Ironically, a check that was bad because of the fee taken for 'a'). Now for her, going to Walmart every month and putting her earnings on…

> (Ironically, a check that was bad because of the fee taken for 'a') This is a real big problem in these kinds of situations. To give you an idea of how this happens: when I was in college, I worked at a pizza shop. It was Thursday. I got paid Friday. I thought I had $20 in my bank account, but I didn't realize that day was the day that my World of Warcraft subscription was up, and that was $15. During the course of…

My favorite story for this type of stuff was in college when the bank double cashed a check I had written. I went below 0 (it was my rent) and 5 other checks (for less than $50) bounced. Cue $175 in overdraft fees.

I went in to fix it and they realized they double cashed my rent (still not sure wtf that was about), and they added back on the amount of the rent. It took another 2 weeks to get the fees removed. I had to call and visit 8 times. Being $175 down in 1988 was not fun.

I switched banks, but as a student I am pretty sure these days I would have used something from Walmart or another group. I bank with a credit union now and they are amazing.

Re: The Real Reason The Poor Go Without Bank Accounts

#176

Post by protomyth »

Cherian_Abraham wrote: post #159
superuser2 wrote: post #129

Earlier quoted context omitted.

Except those debit cards have all kinds of predatory fees. They're smaller and predictable, but way more expensive than using a checking account from a credit union correctly. For example, PayPal: https://www.paypal-prepaid.com/prepaid-debit-card/paypal_fee...

I suspect he/she is referring to Walmart Bluebird. It eats bank's profits for breakfast, lunch and dinner.

MasterCard is also a big player with a lot of outlets (MasterCard Prepaid Everyday Cards).

Re: The Real Reason The Poor Go Without Bank Accounts

#177

Post by protomyth »

lostlogin wrote: post #146
Decade wrote: post #122

Earlier quoted context omitted.

3) "Free checking." And then, even if you (the low-income person) avoid the overdraft fees, eventually monthly fees start appearing. So far, in 10 years of using banks, I've twice closed checking accounts because they started charging monthly fees. I might try a credit union next time I need a bank account. Keep a $3000 minimum balance or have a regular job depositing money into your account electronically, and the m…

What the hell? Minimum balance? This practice is news to me. Is this effectively making zero into 3000? What happens if you dip below?

"Low Aggregate Balance Fee $5" - always a pleasure to see on a statement

Re: The Real Reason The Poor Go Without Bank Accounts

#178

Post by protomyth »

code_duck wrote: post #12
gregpilling wrote: post #2

This comment on the article reflects why many people that I have met personally do not have checking accounts or bank accounts. They are worried about having money seized. From the comment section of the article - "If you would really like to know why poor people regular these establishments I'll tell you why: it's because they keep you off the grid. I used to have a checking account too all my life. But after I lost…

I was talking to my girlfriend last night and she mentioned how her ex-boyfriend doesn't have a bank account. He's actually well off financially, so I wondered why. Indeed, the answer is to avoid wage garnishment for child support.

In many states, that won't work. The state just goes after the employer. A bank account is not a requirement for many states to grab your cash.

Re: The Real Reason The Poor Go Without Bank Accounts

#179

Post by protomyth »

maxerickson wrote: post #47
RexRollman wrote: post #18

That's why Walmart has jumped into this. There is a lot of money to be made.

It isn't even that strange. Grocery stores have provided check cashing services for decades.

Walmart went a bit farther and teamed up with American Express on their Bluebird card.

http://www.walmart.com/cp/Bluebird/1099170

Re: The Real Reason The Poor Go Without Bank Accounts

#180

Post by lostlogin »

protomyth wrote: post #177
lostlogin wrote: post #146

Earlier quoted context omitted.

What the hell? Minimum balance? This practice is news to me. Is this effectively making zero into 3000? What happens if you dip below?

"Low Aggregate Balance Fee $5" - always a pleasure to see on a statement

Ahh, obviously the solution to the problem is to lower it further.
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