Empowering the Unbanked: 5 Financial Options to Consider

In today's digital age, it may come as a surprise to many that a significant portion of the American population remains unbanked. According to recent statistics, approximately 7.1 million households in the United States do not have a bank account. This means that nearly 5.4% of American households are living without access to traditional banking services.  Whether you are one of the unbanked or know of someone that have been turned down by a fiancial institution when applying for a bank account these strategies may help. 

 There are several reasons why individuals may choose not to have a bank account.

• One of the primary reasons is a lack of trust in the banking system. Some individuals may have had negative experiences with banks in the past, such as high fees or poor customer service, leading them to avoid traditional banking altogether.
•  Another common reason for being unbanked is a lack of funds. Many individuals simply do not have enough money to open or maintain a bank account, as most banks require a minimum balance to avoid fees. For those living paycheck to paycheck, the idea of maintaining a minimum balance can be daunting.
• Additionally, some individuals may not have access to traditional banking services due to their geographic location. In remote or rual areas, for example, there may be a lack of physical bank branches, making it difficult for individuals to open and maintain a bank account.

For those who are unbanked, there are several options available that can help improve their financial situation. Below are five options that unbanked individuals can consider:

1.  Prepaid Debit Cards: Prepaid debit cards function similarly to traditional debit cards, but they are not tied to a bank account. This can be a good option for individuals who do not have a bank account or who do not want to deal with the fees associated with traditional banking. With a prepaid debit card, individuals can make purchases and pay bills online or in-person.
2.  Online Banking Services: Many online banking services, such as Chime or Varo, offer accounts that do not require a minimum balance or charge monthly fees. These accounts can be a good option for individuals who want the convenience of banking without the hassle of traditional banks. Online banking services often offer features such as direct deposit, bill pay, mobile check deposit, credit cards, and ways to improve your credit score. 
3. Credit Unions: Credit unions are non-profit financial institutions that are owned by their members. They often have lower fees and more flexible account requirements than traditional banks. Credit unions also tend to be more community-oriented, which can be appealing to individuals who may have had negative experiences with larger banks. Keep in mind that credit unions may not approve your application depending on your credit score or financial situation.
4.  Mobile Banking Apps: Mobile banking apps, such as Cash App or PayPal, allow individuals to send and receive money, pay bills, and make purchases all from their smartphone. These apps are convenient and easy to use, making them a good option for individuals who prefer to manage their finances on-the-go.
5.  Check-Cashing Stores: While not ideal, check-cashing stores can be a temporary solution for unbanked individuals who need to cash a check. These stores charge a fee for cashing checks, but they can be a convenient option for those who do not have a bank account.

In conclusion, being unbanked can present several challenges for individuals in today's society. However, there are several options available that can help unbanked individuals improve their financial situation. Whether it be prepaid debit cards, online banking services, credit unions, mobile banking apps, or check-cashing stores, there are solutions that can provide individuals with the financial services they need. By exploring these options, any unbanked individual can take steps towards achieving financial stability and independence.