How to Make Do Without a Bank Account

Although having a bank account makes managing personal finances easier, you may have your reasons for not having one. It could be a one-time thing while you sort out any issues with identity theft or previous bank issues. Perhaps you've made the decision to go bankless entirely. If you choose to live without a bank, knowing how to function without one is essential. Most day-to-day transactions and some bills can be handled with cash or prepaid debit cards, and some apps and other online services may be useful for other purposes. Without a bank account, however, overcoming some challenges will be more difficult than others.

Debit Cards With Prepaid Balances

Many of the same functions as a debit card linked to a checking account are available with prepaid cards. You load funds onto your card instead of having a bank account and then spend the money you loaded. There are some important distinctions to be made between prepaid cards and bank accounts: A minimum balance is not required to open or maintain a prepaid card, but many bank accounts do. Pre-paid cards are not subject to the same credit checks as credit cards. There is no need to borrow because they are prepaid. ChexSystems and other bank background check services to screen potential account holders will not prevent you from opening an account. As with a bank account, you can't spend more money than you have on your prepaid card, go into debt with it, or incur overdraft fees. Many cards, however, charge fees if you try to make a purchase with more money than you have on your account. Some prepaid cards charge monthly maintenance and other fees, so read the fine print to ensure the card you choose is right for you. Some of the most common are monthly fees, ATM fees, reload fees, decline fees, bill-paying fees, and other fees. Depending on the needs of the customer, some cards offer different fee options.

Spending regularly

The old-fashioned currency will be available for day-to-day expenses until society goes cashless. Cash is usually accepted as a form of payment for things like food, gas, transportation, and entertainment. The main disadvantage is that you must keep it on you at all times, which can be dangerous, and there is no way to replace it if you lose it. The issue of obtaining cash in the first place is also a consideration. You can't withdraw money from an ATM if you don't have a bank account or a loaded prepaid card. Large bills may appear to be easier to carry because they are less bulky, but most retailers and service providers will not accept bills larger than $20 for most purchases. Try to get small bills and buy passes for things like buses or subways to reduce the amount of cash you have to deal with. Pre-paid debit cards can help you with the majority of your day-to-day expenses. A few places refuse to accept plastic or charge a fee for using one, but most merchants are happy to accept prepaid cards as payment. They'll almost certainly never know if it's a prepaid or a traditional bank debit card. You can spend as much money as you have on the card; if it is lost or stolen, you can cancel it and get a new one. If you ever need money, getting cash from an ATM is easy.

Without a bank account, you can pay your bills

Sadly, it's not always practical or even possible to pay with cash. Most subscription services, insurers, utility companies (gas, water, and electric), phone companies, and utility companies demand payment by check, credit card, or ACH transfer from your bank account. Some billers allow you to pay in person, but making the trip every month during business hours is inconvenient, and it's impossible if there isn't a local office. Ask your billers where you can pay in person if you plan to operate solely on cash. Some have local service centers, while others, like Western Union, allow you to pay at national supermarkets and convenience stores. Use a money order made payable to the biller instead of cash if you must mail a payment. Pre-paid cards, once again, can make things simpler and less expensive. Many prepaid cards allow you to pay your bills online. You can provide the card number if your biller accepts credit or debit card payments.

Check Cashing

When you receive a check but do not have a bank account, your options for cashing it are limited. Taking the check to the check writer's bank may be your best option. If the check is drawn on a Bank of America account, for example, cash it at a Bank of America branch. If you're not an account holder, be aware that you may be charged a fee and that the branch may refuse to cash the check. A prepaid card can be useful if you don't need cash right away or only need a small amount. The majority of prepaid cards allow you to deposit money into your account by taking a photo with your phone. You can withdraw those funds from an ATM within a few days. Many retailers charge a fee for check cashing, but large retailers like Walmart may waive the fee if you transfer the check's amount to one of their prepaid store cards. Retailers may also be willing to cash your checks. Check-cashing stores (often in the same location as payday loan shops) may also be an option, but they will almost certainly be more expensive.

Keeping (and Saving)

Banks excel at one thing: keeping your money safe. The FDIC should insure your money even if your bank burns down or is destroyed by a natural disaster. Credit unions are similarly safeguarded. Walking around with large sums of money or keeping all your money in your home is dangerous because it could be stolen or burned in a fire. Get a fireproof safe and find a good place to install it if you're going to live without banks or prepaid cards. Pre-paid cards allow you to store money in an account securely linked to your card. The account may or may not be FDIC-insured, but the money cannot walk away or increase in value on its own.

Money Transfers and Receipts

There's good news and bad news if you want to pay friends and family (rather than businesses who send you a bill). You have several nonbank options, but many of them require a bank account—or at the very least a prepaid debit card—to operate. Note: For person-to-person payments, apps like PayPal, Square, and Venmo are frequently free, but you'll need a way to fund the transaction. Most people need to link their bank accounts to the online service, but prepaid cards are frequently accepted. Bill-splitting apps are useful for splitting bills among friends or roommates, but they frequently require integration with peer-to-peer (P2P) apps such as PayPal and Venmo. Some services allow you to "load" money onto an account by sending a money order, while others let you do so by adding money to your account by buying cards from merchants. You can load cash onto the PayPal Cash Card at stores like Walmart, for example.

Take out a loan

Borrowing is easier with a bank account, but getting a loan without one is possible. When you apply for a loan, lenders will frequently ask for your bank account information so that they can fund your loan and track where the money goes. When you apply without that information, it throws a wrench in the works. Furthermore, even if you are approved, you must do something with the loan proceeds, such as cash the check or deposit the funds in a prepaid account. All of this points to the fact that borrowing without a bank is more difficult. When you're unbanked, your borrowing options are limited. You're most likely left with less-competitive lenders such as payday loan shops and car title lenders. When you use those sources, however, fees are notoriously high. Check with a local credit union or small community bank to see if you can get a loan before giving up hope. Getting approved may take some effort, but it is not impossible.

Most Commonly Asked Questions (FAQs)

Is it possible to transfer funds from a prepaid card to a checking account?

A prepaid card can usually be used to transfer funds to a bank account. Depending on the prepaid card company, the process may differ slightly, but you'll typically transfer funds by logging into your prepaid card account online or via an app.

Is it possible to get a credit card without a bank account?

You can acquire a credit card even if you don't have a bank account. However, paying your credit card bills can be difficult without a bank account. You may be able to pay in person at a local branch if a bank issues the credit card. You can also use a money order or a money transfer service such as Western Union.

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