What did one reporter learn about living without a primary financial institution? Namely, it’s more expensive than you think.
The AP’s Candice Choi recently undertook a hands-on approach to reporting by suspending her primary financial institution relationship to live “bankless,” the way roughly 25% of American families do. Avoiding bank services, credit and debit cards, Choi relied on services like check cashing stores, prepaid cards, and payday lenders, and managed to rack up a startling amount of fees in the process.
From her month long experiment, Choi estimates this lifestyle would cost her nearly $1,100 per year for financial services she could have received much cheaper as part of a financial institution. Frequent charges included:
*Prepaid cards can cost up to $29.95 by themselves. One, the Millennium Advantage Prepaid MasterCard, can have application fees up to $99, according to the NY Times.
*Up to $1 a minute charges to call customer service for prepaid cards, and recharge fees of up to $5.
*$56 to cash two paychecks at a check cashing store.
*A $3.50 charge for two money orders to pay rent.
Prepaid cards and other fringe financial services continue to be a growing choice among consumers, despite undisclosed fees and a general a lack of regulation compared to products from financial institutions. But while consumers are still learning hard lessons about these services, credit unions are in a position to be both educators and an alternative to the traditional bank options that let these consumers down. How is your marketing highlighting the dollar difference belonging to a credit union can create for consumers? The clearer the message, the less substantial a role these alternative financial solutions will have in your potential member’s lives.