It is $5/mo for accounts with less than $1000, but you're not going to get better than that at a bank.
More importantly, they aren't pulling the overdraft scams that banks are. The example right here is that the customer in question pulled $100 in overdraft fees over a $4 purchase, with a traditional bank card.
That might be true of the big national banks with a branch in every town small and big alike but it's not true of the smaller local banks and credit unions. My checking account at my credit union is free as long as I maintain a balance of at least 5 dollars. It has branches in the area with decent hours, it has an excellent online banking site, it has excellent customer service. When I walk in to do some business I'm not bombarded with sales pressure to waste my money in exotic types of accounts that the credit union offers that do more for the bottom line of the credit union than for me. If I travel across the country I can access my money through a national network of similar credit unions without paying any fees.
To my understanding this is extremely common among credit unions in other areas.
Oh and to reply to one of your comments below, my credit was extremely poor when I opened my account. I received nothing but highly professional customer service regardless.
I just checked and my CU has a $30 overdraft fee, which can be disabled if you're willing to let things bounce.
I just bought a car, and the satellite branch could only give me $1000 in cash. I had to beg the seller to take a cashier's check for the balance.
Sometimes the systems don't integrate well and so they have a hard time figuring out which account is which.
Finally, even though my spouse is listed as a co-owner of the account, there is very little she can do at a satellite branch (or even over the telephone to the main office).
It might, OTOH, be hard with the same kind of bad account history that will stop you from being able to open a regular bank account, but that's different from regular no credit or bad credit.
Background: For the record, it was due to defaulting on a student loan. It's taken care of now, but back then I couldn't afford the 10% interest rate.
Sure you are. I have many accounts with less than that. Don't spread FUD.
Overdraft fees are easy to avoid if you just tell them to decline overdrafts.
Maybe you're a student or have multiple products (different types of accounts, credit cards, home loans, term deposits) with your bank?
I can't get a $0 / month account for everyday banking from my bank because I have a special rate home loan. They have a savings account that's $0 / month but you can only transfer from / to it via a regular $4 / month account.
* http://content.schwab.com/web/retail/public/get-started/chec... - amazing checking account, reimburses all ATM fees
* https://www.capitalone.com/bank/360checking-guide/
* https://www.aspiration.com/summit/
I do have a few other ones but they're based on relationship banking. All of the above have no fee and no minimum.
I'm not trying to say the unbanked don't have barriers. I just didn't like the assertion that free checking is impossible, since that's what leads to even people on HN paying needless maintenance fees.
For example, if you attempt to opt out, the teller might say, "but what if you are at the gas pump and can't get gas because you have opted out of overdrafts?" The subtext being, "wouldn't it be better to get enough gas to get home and in the process incur a 40 dollar fee."
A good bank let's you disable overdraft for debit card while enabling it for checks.
You may be able to find a couple credit unions that do this, but you still have minimum account balances and other hurdles that make it difficult to open an account if you have bad credit and little money (not to mention time or financial savvy).
I don't know about the credit check part; I set up with my parents years ago so that may have exempted me as I didn't have any credit history at the time.
...in the US.
In the UK its the opposite; the majority of checking accounts are free, some premium accounts charge a fee but generally come with rewards.
Overdrafts; there are fees for unarranged overdrafts, but its reasonably trivial to arrange a limit and this is generally fee-less (naturally you pay interest; mine is 1.2% calculated daily)
ATMs are largely free regardless of who your bank is.
Every credit union in my area offers free draft accounts as well, just put the $25-100 member balance into savings and you're done.
They have proven to be a criminally fraudulent organization time and time again.
For as awful as they are, Wells Fargo even has the "opportunity" checking account that gives people who have negative marks on ChexSystems a second chance at having a proper checking account. Compared to the awful re-loadable debit cards from Walmart, et. al, it's a great option and the monthly fee can be waived with 10 debit transactions per month or $500 in direct deposits.
Would I go out of my way to say I LIKE Wells Fargo? Hell no, they've done tons of shady stuff - but compared to how US Bank has screwed over every one in my family at least once they've been at a "below average" level of suck.
https://www.capitalone.com/checking-accounts/online-checking...
What's the benefit of personal banking through an actual bank over a credit union? I see none currently except it's a bit more difficult to send/receive money internationally through mine (I'm fairly sure it isn't all CU's that have this issue).
A simple google search for free checking account gave me 20+ such banks in the first result.
What? It costs money to lend your money to the bank in the US?
There are enough banks/credit unions that don't charge fees that it is more of a way of asking people not to open an account than it is a problem with access to banking.
Seriously though, these cards, like many "financial products" come with a variety of price points and fee structures. If you re-read my comment, you'll see that I didn't claim my figures were definitive, but they are definitely in the ballpark.
- It's $1 for the card, not "$5-$10"
- It's free cash withdrawal, not $3
- It's free deposits from direct deposit or government benefits, not $3
You are not approaching this remotely honestly.
As I said, there are a variety of cards on offer, from a variety of sources, but they all seem to fall within the same range cost-wise, even if the fees are structured differently.
It's as if we are arguing about cars, and you want to debate whether the pinto in question had power-windows or not, while ignoring the fact that it will explode in a routine accident.
The precise things you claimed about this card are _not true_. Those are facts. If you want to debate, use _facts_.
Nobody is denying that WalMart _could_, if they wanted to, offer a savings card which is a scam. But also consider their motives going into this, compared to the average bank:
- Wal-Mart's goal is to get people to spend money at Wal Mart. This card makes it easy to spend money at Wal-Mart.
- Banks exist entirely from interest on saved money, and on fees.
Since these customers have very little saved money (the whole point of this article), the money made is entirely from fees, unless you have another reason to get people to use the card. Wal-Mart does -- it is totally reasonable for them to run this program at-cost to attract customers. You cannot say the same for any bank.
If you want to disagree with the merits of people spending money at Wal-Mart, that's a different topic. But the evidence points to this card being a good deal for an underserved part of the population.
You are right to say that a few of the specifics I gave were not correct. I was clearly not arguing that. However, the specifics you gave were not 100% correct either. For instance, if you go to an atm machine in a wal-mart and attempt to withdraw cash, you will be charged 3 dollars. The fee breakdown I linked bears this out. A fee breakdown, I might add, that is several pages removed from the main page describing the class of card in question.
> You can withdraw cash from your card at any Walmart register or MoneyCenter. This service is free for the Walmart MoneyCard product with Cash-Back Rewards.
Where are you looking?
now click on the fees tab https://www.walmartmoneycard.com/account/faqs#fees
then click on the 'fee plan' link https://www.walmartmoneycard.com/account/legal-info#feeplan
then click on the 'view the Wal-mart money card fee plan' link https://www.walmartmoneycard.com/account/legal-info#feeplan
and you will arrive at the fee plan I linked earlier.
> Walmart Card Cashing / Withdraw cash without a fee at Walmart MoneyCenters and Customer Service desks. / No Fee
there's no fee for withdrawing cash in any Wal-Mart.
That seems to be the same as any other normal bank -- except for some credit unions that reimburse you, you don't get free withdrawals at random ATMs (I have BoA, and it's the same for me).
Yes, they do charge fees at the register, regardless your link. When I went and deposited the $200 check from Wal-mart at a register, and $197 goes in... yeah. You can link URL's all you want. But 3$ disappeared in that transaction for "reasons".
I know because I've used the plans that people here are talking about. Unlike the rest of you, I've had them. I've used and been used by them.
No shit the act of depositing and withdrawing are different. But they still get their $3 cut for each of these. How about you go spend 3 packets of $200 on this and report back your results instead?
Yeah. I have. I did the Green Dot. Pile of shit, with hidden service fees, usage fees, loading fees, fee fees. Oh yeah, YC.
Ive been on food stamps. I've been on unemployment. Even been homeless for a time. Right now, I have a significantly better job... But I still live in a trailer.... err, "Tiny House".
But anyways, good luck explaining what you mean. These people don't get it, and their societal structure means that they won't get it, even if you linked the very documents to them. It's out of their worldview.
Also, to quote from the article.
"Check-cashing outfits, payday lenders, and similar businesses are often thought of as merely preying on poor people, who, the conventional wisdom goes, tend to make bad financial decisions. Lisa Servon, a University of Pennsylvania professor of city and regional planning, offers a different angle in her recent book, The Unbanking of America: How the New Middle Class Survives. During Servon’s research working as a teller at a check casher and payday lender, consumers told her that the fee structures of nonbank alternatives were more transparent and predictable than those at conventional banks—crucial to anyone living on a budget."
I understand where you're coming from, I was in the payday loan trap at one point.. robbing peter to pay paul as it were, I made much less than 40k a year, its only in the last 5 years I've started to get north of 50k, and gotten comfortable.. now I save save save..
Indeed. And I'm still paying for it after many years. I got fucked over with payment reordering for bank-profit maximization, even with "overdraft" disabled. Didn't matter. Because whatever the bank says, is the ordained truth. And when your name gets on ChexSystems and other lists, you're done for.
My wife was did in similarly. The local credit union said she owed $120 for previous account issues that pertained to her then ex-husband. Didn't matter. The bank said it was hers, and too bad. There is no recourse. The bank/CU is god, no if's ands or buts. And suffice it to say, if you're in this position, there's no money for a libel suit (which is what it is, without a court determination).
> "Check-cashing outfits, payday lenders, and similar businesses are often thought of as merely preying on poor people, who, the conventional wisdom goes, tend to make bad financial decisions. Lisa Servon, a University of Pennsylvania professor of city and regional planning, offers a different angle in her recent book, The Unbanking of America: How the New Middle Class Survives. During Servon’s research working as a teller at a check casher and payday lender, consumers told her that the fee structures of nonbank alternatives were more transparent and predictable than those at conventional banks—crucial to anyone living on a budget."
I would agree with the transparency discussion. But it's also much more predatory. They get their pound of flesh. And this flesh is taken every time you use it. Banks do cover up and obfuscate their fee structure, but if you have the usual minimum balance, you'll never see this. Banks also rely on lack of CSR's for rich people. Because money's nothing, not a big deal. Bills are minuscule compared to income.
> I understand where you're coming from, I was in the payday loan trap at one point.. robbing peter to pay paul as it were, I made much less than 40k a year, its only in the last 5 years I've started to get north of 50k, and gotten comfortable.. now I save save save..
Yeah, it's not common to see people here who know what this all means. Fortunately, I was able to avoid the payday trap.. But not student loan trap, credit card trap, medical trap.. Right now, I have a garnishment for an injury sustained in 2008. Had insurance, but the physical therapy "wasn't approved". For a while, I was job hopping a bit and stayed ahead of the garnishments. And unemployment is ungarnishable in Indiana.
Credit cards.. Well. I had them when I had a job. Paying them down is hard without one. But it's easy money to get food and basics when you're waiting for unemployment. Fortunately, a few of them have been written off.. but that just burns another bank. At least Google Voice allows me to shitcan creditors, especially when I dont have the capability to pay.
School debt is a whole 'nther area. I got into my accident which caused my medical debt, but also caused all those classes to fail. But the school gets their cut, regardless if you do well or not. The school can do horrendously, apathetically, and cutthroat.. and they're guaranteed their money no matter what.
I did schooling at a "proper 4 year university" with frankly nothing to show for it. And I believe this burden should also be shared in part with the organization that also failed me in my educational goals. But, even this "Public University" is run much more as a Business than a public trust or institution. But likely, I'll be paying this off with garnishments in my Social Security.
In reality, this whole area is a sore point. Many people here, given the focus of HN, will never have to suffer like this. They'll also never know the pain of hurting, and not being able to fix (no medical care). They'll not know what it means to go hungry because you're waiting for the unemployment to start along with food stamps. They won't know the shame of walking into the food pantry, or using the foodstamp card. Nor will they see the looks you get, when you borrow your mother's vehicle to get the groceries... How dare you not be dressed in tatters and driving a rust-eaten beater truck.
It comes down to understanding "Us" vs "Them". I was an "Us", and remember that well. I'm on my way to being a "Them". Faking it, living the culture, understanding the nuance. But I understand, and seeing many posters here in this thread brings back all that anger of being taken advantage of, and having no power to do anything about it.
I guess the main thing I was attempting to communicate is that the facts on the ground are very different from the facts as presented in this article and elsewhere online. While it's definitely difficult to convey this in brief internet comments, I do feel there's a worthwhile discussion going on, so thanks to all involved as well as those reading. :)
The only cash machines that charge over here that I've seen are rented ones at packed events (clubs, concerts etc).
It is certainly possible to pay for those services, but it's not normal. Some people let it happen out of laziness, or due to not being aware that they can do better.
We do have a fees problem, but it's mostly with other services. For example, many banks will charge some outrageous amount (like $5, outrageous compared their cost) to give you an electronic copy of a past bank statement. High overdraft fees are common. If you accidentally use your debit card to make a purchase that exceeds what you have in your account, the bank will often charge you a ~$35 fee rather than reject the transaction. This is optional, but they push it hard and sell it as a "service," since it means you're never left unable to complete your transaction. Never mind that being out a bunch of money is bad too.
Even worse, some banks (at least for a while) would intentionally maximize your overdraft fees by sorting your transactions on any give day from largest to smallest before applying them. For example, imagine if you have $99 in your account, and you use your debit card to make purchases, in order, of $1, $1, $1, and $100. The last transaction should overdraw the account, hit you with a $35 fee, and your balance will be -$39, right? Wrong! They'll run the $100 transaction first, overdrawing the account, and then run the $1 transactions on the overdrawn account. Net result: four $35 fees and a balance of -$144.
So yes, many of our banks suck, especially larger ones, but it's not quite as bad as everyone paying to withdraw and deposit.
Of course, the CFPB is looking pretty dead at this point, so who knows what they'll do after Trump dismantles it.
FREE CASH
Of course that unfortunately only means that you're not charged for the withdrawel, but the cash doesn't really come free.
Using a cash machine is free, for the majority of cases — those in banks, supermarkets, shopping centres, railway stations and so on are run by one of the banks and are free for customers of all banks to use. It doesn't matter if the machine or customer is with/is a major bank or a small one, they're all on the same network and charge the same: £0.
The exception is captive markets. Cash machines within a stadium, nightclub or a convenience store often charge. I've never used one of these, it's so easy to avoid doing so.
Free would be nice but I can understand why banks would charge non-customers fees. If your ATM is in a very high traffic and convenient place, you are going to be servicing and refilling the machine more often which costs more money. If you can control the usage a bit by charging non-customers a fee then you can reduce service costs.
I assume this averages out amongst the large banks, who probably each have their fair share of convenient places. The small banks pay for their customers' convenience; presumably a very worthwhile cost for some of the new banks or Internet-only banks.
But withdrawing and depositing money is a service that costs the banks money to do doesn't it? I'm can see why you don't like but I can't see it as morally 'disgusting'.
Would you look after someone else's meagre current account for them, and give it back on demand, for free? I wouldn't.
I don't really know who covers that cost in the UK. It's certainly not interest they earn lending out our savings is it? Especially this type of customer since they have no savings because the point of the card is to encourage them to do so, and since interest rates are so low.
Who is paying to cover the costs of a basic bank account of someone who doesn't save? I've no idea.
It's literally their job. It's their function. Why am I reimbursing them? I'm giving them my money essentially to invest, why am I also paying them to support basic business functions on my money, with my money, while they make money using my money?
It's easy to say "hurr durr why are you paying them for a service they provide, who does that??" but that's missing the point. Banks are a special case.
> I can't see it as morally 'disgusting'.
It disproportionately affects the poor, and for no real reason than 'I can charge this so I will'. Apparently some places charge you to even check your balance? What the hell.
> I don't really know who covers that cost in the UK
The big, fat, rich banks do. Because the total cost of running all their ATM's is a fraction of a rounding error on their yearly turnover.
It sets a floor for the spread, not a ceiling. All else being equal, the bank should make more money when the amount of interest it has to pay its customers drops.
But what about those people who aren't giving the bank any meaningful capital to invest? What is the bank getting in return in that case?
Or are you arguing that banks should be forced to provide it as a kind of social service even if they don't earn anything? I can understand that kind of point of view.
Or are you arguing that banks should be forced to provide it as a kind of social service even if they don't earn anything?
The people not giving the bank any meaningful capital are going to cost them much/anything,because it's not as if Joe Bloggs with $500 in his account is going to be doing a thousand withdrawals and balance checks a month.
The point is the banking fees hit those who can least afford to pay them the most. It doesn't have to be like that, and I can understand a kind of point of view that supports it.
It's also clear that banks aren't losing money. What's at issue is how they earn their money and at whose expense.
And it's not like they are about to go out of business either.
For another laugh buy a house or car with a loan and there's zillions of little fees and commissions tacked on to the base price. Complexity only increases over time, and it only decreases with collapse.
This is part of the logic of the old great depression "liquidate liquidate liquidate" guy who sounds heartless in retrospect but in practice the only way to reallocate poorly allocated resources in the modern capitalist system is to flush and start over, so not knowing the GD was going to be as bad as it turned out, the guy was correct, the faster the obsolete stuff gets flushed, the faster we get back to real living. Which is analogous to current conditions, and why many people are unhappy nothing has been fixed in the banking system (or another example is health care, obamacare and trumpcare have in common that they fix none of the core problems, which is our health care allocation system is an expensive disaster)
Have we forgotten what a bank is for? It's to conveniently and safely store money. Part of that convenience is to withdraw and store money at many locations. If a bank didn't offer that they wouldn't get my money.
Even now, most free checking accounts only require a certain amount of money, transactions they collect fees on, etc.
With interest rates so low, they don't make much just holding onto 500 dollars for someone.
Savings accounts had less fees, but you couldn't use them to write checks out of, etc.
What capital? The people referred to in this article don't have any savings. Many working class people have no savings at all, and only a few thousand in their current accounts.
I suppse where bank accounts are free including services like ATM that might be an indication that banks compete for all customers - which might ni turn be an indication that all customers are reasonably likely to buy financial products such as taking loans or savings products in the future.
Criticising this offer is as valid as criticising any other expensive and bad service.
It also ties in to how banks are regulated. Now again, I'm not super well versed in the history here, but as I understand it, after the stock market crash in the 20's, congress passed the Glass-Steagall act which, among other things, said that the banks either had to be an investment bank, or a commercial bank, but not both. That way the commercial banks, which are holding regular folks money, can't gamble it all away. That seemed to work pretty well, so much so that congress was later convinced to repeal large portions of Glass-Steagall.
Once that happened, investment bank culture, which never really left commercial banks, once again came to prominence, along with it's emphasis on making money for shareholders.
The reason I mention all that is to say that during Glass-Steagall commercial banks had to go back to making money slowly but surely through giving out safe loans and charging modest fees for basic services. In the meantime, their shareholders, having had a taste of the large dividends generated by investment fees and the like, came to expect more than the safe, modest returns commercial banks used to provide. In order to appease investors, commercial banks then had to look for other ways of generating profits. That's where things like atm fees, excessive overdraft charges, monthly checking account fees, and the like come in.
The fees and stuff actually got so bad that congress passed a law mandating that the banks had to allow people to opt out of overdrafts, among other things. Unfortunately, this law had been kicking around for several years by the time it got passed, so the banks had plenty of time to weaken it and/or find work arounds. For instance, where you used to get a single overdraft charge for each time you overdrafted, many banks went to a system where you got a daily charge for every day your account was in the negative. I've literally seen someone crying in the bank upon being told that what should have been a single $40 charge had grown in the course of a week or so into a $400 charge. Sadly, this is just one of many such examples of how commercial banks have changed their practices to prioritize profits over public service.
Hope that all made sense. As I said, I'm not a historian, and a lot of the stuff I discuss is widely debated, but if you find it interesting there's a lot of good info on wikipedia and youtube, not to mention your local library. :)
During Servon’s research working as a teller at a check
casher and payday lender, consumers told her that the fee
structures of nonbank alternatives were more transparent
and predictable than those at conventional banks—crucial to
anyone living on a budget.
Prepaid cards offer this predictability, and over time
their reputation for transparency has improved.Obviously each CU is different, and I can't really speak to the specific terms that each one offers, but overall they seem to be more attractive than the terms offered by the large chain banks and the payday lender style banks that originated the style of debit cards discussed in the article.
I was under the impression that most people using these cards were using them because:
a) They distrusted banks because of a prior history of being screwed by them, or
b) They were unbankable because of a ChexSystems report preventing them from being able to open a traditional bank account.
Is this not the case?
These cards charge 5 bucks a month, plus like 3 dollars to deposit cash, 3 dollars to withdraw cash, in addition to the 5-10 dollars up front for the card itself.
Because of this, a person using this type of card can easily spend $100+ a year on fees. Not exactly a great way to save money, and hardly better than overdrafts.
If at all possible, people in this sort of situation would be much better served by joining a credit union. While there are some drawbacks in terms of hours and atm availability, many CU's do not charge overdrafts and also have some form of atm reimbursement. This, along with the ability to deposit checks by snapping a pic with your phone make them a viable, and preferable alternative. Sadly, they are not as prominent, nor well advertised as the sort of cards peddled by Wal-mart, et. al.