The Lazy Option to Payday Loan Online No Credit Check Instant Approval

The cost of not having a bank account is Hundreds of Dollars per Year, always one step behind.

Advertiser disclosure You’re our first priority. Everytime. We believe everyone should be able to make financial decisions with confidence. And while our site doesn’t feature every company or financial product that is available in the marketplace We’re pleased that the advice we provide and the information we offer and the tools we create are impartial, independent, straightforward — and cost-free. So how do we make money? Our partners compensate us. This can influence the products we write about (and the places they are featured on the site) However, it in no way affects our advice or suggestions which are based on many hours of study. Our partners are not able to pay us to guarantee favorable reviews of their products or services. .

The cost of not having a bank account: Hundreds of Dollars a Year, Always One Step behind.

Written by Tony Armstrong Lead Assigning Editor | Banking Tony Armstrong leads the banking team at NerdWallet. He has covered personal finances for over 10 years. Tony started his career at NerdWallet as a writer , and then progressed to assistant assigning editor and later to the position of lead assigning editor. The writing of Tony has been featured on the Los Angeles Times, MarketWatch, Mashable, Nasdaq.com, USA Today and VentureBeat. Tony lives in Minneapolis, Minnesota.

Sep 13, 2016

A majority of the items featured on this page come from our partners, who pay us. This influences which products we review and where and how the product is featured on the page. But, it doesn’t influence our opinions. Our opinions are entirely our own. Here is a list of and .

Banks may bring about a fair amount of problems, but the lack of access to a bank can be even worse for your financial wellbeing. In the absence of a financial institution that offers basic services such as free check cashing , and loans that have reasonable interest rates Unbanked customers depend on other financial service providers to cash their checks and cash out money orders. The accompanying fees cost these households hundreds of dollars per year.

Along with the higher cost of living, not belonging to any credit union or bank has harmful long-term effects. Unbanked households, which the FDIC defines as households that do not have an account at an insured institution, cannot save money to create emergency funds. They also can’t switch to tools that save time for things like paying bills or transferring funds.

«The traditional banking system is beyond the reach of thousands of Americans,» says Sean McQuay the NerdWallet’s banking expert as well as credit specialist. «While it might appear impossible, using a bank account could become the initial step to breaking the cycle of living paycheck to paycheck, thereby paving the way to financial freedom.»

The majority of households that don’t have a savings or checking account with a bank are told the reason is that they don’t have enough money. The average income after tax of such households is just $18,203 according to NerdWallet’s analysis of data from the Federal Deposit Insurance Corp. The high cost of alternative financial services only make the situation worse.

However, there are cheaper options available, and taking advantage of them can help people reduce unnecessary expenses.

The key conclusions

The average annual cost of not having an account at a bank is $196.50 for those who utilize a prepaid debit card that features direct deposit. This figure increases to $497.33 in the event that the card does not offer direct deposit.

Individuals who are only dealing in cash face average annual costs of $198.83 for cashing checks and the money-order services.

With approximately 9 million households that are not banked across the United States, down from 9.5 million in 2013, the aggregate annual cost for families in these households is between $1.8 billion and $4.5 billion.

The absence of an account with a bank forces individuals to seek out alternative financial services. People who do not have a bank account are 6 times as likely to use costly .

Transacting «off grid» can be costly

«In many respects, you can equate the needs of unbanked households with those of banks,» says John Thompson, senior vice president at the Center for Financial Services Innovation an independent consulting firm in the field of financial services. Certain transactions require however for consumers who aren’t banked they aren’t processed through the bank, Thompson says. And that’s where they get expensive.

Take cashing a check, for instance. When it’s done through a bank or credit union, the task is as easy as it is affordable. However, this convenience disappears in the event that you don’t belong to the traditional financial institution and the alternative could be a hefty price.

Check-cashing firms typically charge between 1% to 10% of a check’s value, and that means unbanked customers who don’t have the prepaid cards that offer direct deposit pay an average of $182.03 per year just to access their cash as per NerdWallet’s analysis of FDIC data and assuming that a fee of 1% of the value of the check. Customers who don’t have banking accounts are around six times more likely make use of check-cashing services than those who do.

«Relying on services like money orders and check cashing is expensive, and it’s those Americans who are unable to afford the costs and inconveniences of these services that are left without a bank account,» McQuay says.

Instead for checking account, some people use pre-paid debit cards. They are offered at supermarket stores as well as other retailers such as Target, Walgreens and Wal-Mart. This type of card is relatively simple to use: Users can spend only the amount they have loaded onto the card.

Checking account costs

, which have low overdraft charges and no monthly fees, cost customers around $30 annually. Checking accounts on average cost customers around $150 annually, when factoring in monthly maintenance charges as well as two overdraft fees.

» relying on services such money orders and check cashing is expensive, and it’s Americans who are unable to afford these costs and hassles who are left without a bank account. » Sean McQuay , NerdWallet banking and credit expert

However Prepaid cards are generally thought to be more expensive than regular checking accounts, costing customers the equivalent of $179.70 or $298.50 annually, based on the card’s the option of direct deposit for free. If not, customers face steep cash-loading fees. Also, prepaid cards typically include monthly fees or per transaction costs as well as ATM withdrawal fees.

Someone who doesn’t have either a checking account or an prepaid card will be charged annual charges of $198.83 for check cashing and money order services.

On top of their costs Prepaid cards also have other disadvantages. They aren’t able to be used to build credit and federal law does not require prepaid cards to provide protection against fraud, like they do for regular debit cards. However, companies like American Express, Discover, MasterCard and Visa generally provide a specific amount of protection for purchases but they don’t offer protection for ATM and some online transactions.

Additionally, the majority of checking accounts are backed by the government, which means that the account holders will not be able to lose any money, from $0 to $250,000, in the event that the institution goes under. The people who use debit cards that are prepaid have this protection when their card is made by a banking institution, but even then, they may not get all of their money back. If they bought their card from a company that isn’t insured by the FDIC which is quite rare, the rules of the issuer determine the amount of protection they offer and whether they’ll be reimbursed.

Indirect costs impose their burden as well.

The pitfalls that come with not owning a banking account extend beyond the cost of financial alternatives. One of the biggest disadvantages is that not being a member to a bank takes extra time. Unbanked consumers who don’t use card that are prepaid don’t have access to the various conveniences that come with online and mobile banking, like automatic bill payment and money transfer services that are free. Prepaid cards may come with these services however they are usually not cost-free, as opposed to those offered by credit unions and banks.

«If you’re not a member of any financial institution You can’t trust what you do,» Thompson says, saying that this can cause people to take time off work, which can affect their earnings. If someone has to travel to take care of their financial needs and travel, they will incur costs for transportation as well, Thompson says.

Being unable to utilize standard banking products hurts individuals in different ways, too. Banks provide access to tools that assist them in maintaining or improving their financial health, like , certificates of deposit and secure credit cards. They could, for example, help them create an emergency fund and increase credit, which can reduce the requirement for costly payday loans.

The median amount borrowed from payday lenders is just 350 dollars, according to study by the National Association of Credit Unions. This is a figure that those who are members of a financial institution or credit union could accumulate by using a savings account, or a secured credit card to pay for. This would enable them to avoid the risk of taking out loans that carry the median interest rate of around .

With the help of savings accounts and secured cards, it becomes easier to maintain healthy credit. And the cost of borrowing is lower; the most well-known secured credit cards generally have rates of about 20%..

«We have systems that let us create information on people’s credit habits,» says Gregory B. Fairchild who is associate professor of administration for business in the University of Virginia Darden School of Business. «Absent those information, the real cost that people face in the long run is they’re at risk.»

«Everyone’s an individual danger,» he says, but the risk for people without credit histories «is extremely uncertain.»

This risk could have an impact that can trickle down into other aspects of life and affect their ability to get loans , get credit cards or even begin an business.

Without a credit history small business owners have difficulty getting credit lines as per Tara Robinson, chief development officer at Mission Asset Fund, a nonprofit that facilitates loans and other financial products to previously unserved families. A lack of credit history is a factor that can restrict the potential of earning according to her.

«You sort of get stuck before you start,» Robinson says.

Better options for consumers who aren’t banked

For those who don’t own an account at a bank account, it may seem as if expensive alternative financial services are your only choices. However, that’s not the case. Here are a few strategies to consider.

Take advantage of second-chance checking in the event that you’ve had an unpaid check or shut down an account prior to paying a bank fee you may be listed with the Consumer Reporting Agency. A negative file is often all it takes to get banks to deny your request for a new account.

But some financial institutions offer second-chance checking accounts. These accounts eliminate the need to make use of check-cashing service and money orders, the latter of which costs unbanked customers approximately $17 annually. These products are available to anyone who is listed on ChexSystems and are able to be used to establish an impeccable banking record. Once you’ve managed to do this, you should consider opening a savings account to help you build and manage your emergency funds. To open either type of account, you’ll need to show proof of identification, and may be asked to deposit an initial sum of anywhere from $10 to $100.

>> MORE:

Get a secured credit card: With secured credit cards, you put down a deposit, typically at least $200 or $300, which you can then use to borrow. Once you’ve used your secured card in a responsible manner for around 1 year, you may be offered an upgrade to a regular credit card.

In addition is that you’ll have improved your credit score during the process, thus becoming more appealing to lenders. This is assuming, of course, that you pay your monthly bills punctually and on time.

>> MORE:

Join a lending circle or work with a small community lender: Borrowing money and repaying on time can improve your credit, and borrowing traditional loans from banks or credit unions isn’t the only choice. Mission Asset Fund, Robinson’s employer, manages and facilitates lending circles, which offer a special type of zero-interest loan.

«Each loan is typically around 1,000 dollars,» Robinson says. «You have 10 people come together and make a contribution of $100 per month, with one person receiving the loan every month. The loan is distributed until everyone receives their loan.»

Like many organizations that supervise lending circles, Mission Asset reports repayment behaviour to credit bureaus on a monthly basis. Anyone with no credit history who make their payments punctually can raise their scores to about 650 within 6 months Robinson says.

«It’s the perfect opportunity to allow those without credit scores to build credit quickly and for those who have damaged scores to help start to rebuild them with a positive line of credit,» she adds.

Find out if there’s an area-based community lender or nonprofit in your area that can facilitate these kinds of loans or similar financial services.

>> MORE:

Joining the financial mainstream

From depositing checks to savings accounts, the reasons why people turn to banks may not be particularly appealing. Ultimately, though banks are crucial elements in families their financial lives. If you’re not able to access to a bank, managing your money and taking care of daily financial chores can be harder and almost certainly will be more costly.

This is what makes second-chance check accounts as well as secured credit cards, community lenders and lending circles extremely valuable. They provide families with access to traditional financial services they would otherwise miss out on, thus opening the way to a more secure financial future.

NerdWallet Data analyst Sreekar Jasthi and writer Spencer Tierney were the authors of this study.

The METHODOLOGY

To calculate the average income of unbanked households we used information taken from 2015’s FDIC National Survey of Unbanked and Underbanked Households. The survey revealed that 7% of households were unbanked. To determine the check-cashing costs for unbanked households using prepaid debit cards without direct deposit and unbanked households that only use cash we assumed two checks that were cashed each month, as well as a 1% cost of the check’s total value. We also took the assumption that one money order is each month, with an average cost of $1.40.

For banking costs associated with using a NerdWallet-recommended checking account, we assumed two overdrafts per year costing $15 each and no other fees. For the typical checking account we assumed two overdrafts every year for a total cost of $30 per one along with maintenance fees in the amount of $7.50 monthly. To determine the average cashing of checks and money order charges We used the FDIC’s statistics regarding how often alternative financing services used by each type of household (banked or non-banked), then added the less frequent the use of banks by households to the average costs.

To calculate the average annual cost of prepaid debit cards we examined 69 cards, which were based on the major issuers, high search volumes, Pew Charitable Trust’s and the offerings of cards on and ‘s websites. For cards with different plans we counted each plan as an individual card.

The study includes the annual costs of the prepaid debit card that comes with or without direct debit to pay payroll. The median monthly cost used was $4.98, and the median out-of-network ATM fee was $2.50. We used the maximum charge for cash loads of $4.95.

For the direct deposit option we assumed 12 monthly fees as well as two non-network ATM costs per month. In the case of the non-direct deposit option we assumed twelve monthly fees, four ATM fee per month and two cash load fees per month. Signature- and PIN-based transaction fees are typically not applicable to cards with monthly charges, which is why they were not included.

About the author: Tony Armstrong is a banking editor at NerdWallet. His work has been highlighted by Mashable, the Los Angeles Times, Mashable and USA Today.

Similar to…

Find a better savings account

Check out NerdWallet’s recommendations for the most high-yielding online savings accounts.

Dive even deeper in Banking

Learn more about smart money strategies right to your inbox

Join us and we’ll send you Nerdy posts on the financial topics that are important to you and other ways to help you make more from your money.

Do all the right financial moves

Should you have any kind of issues relating to where as well as how to make use of payday loans without checking account (payday-loan.ru), you possibly can e-mail us in our site.