Most people put up with many things that they don’t particularly enjoy: the dentist, exercise, Aunt Mildred’s Jell-O salad. But some things are so unbearable they’ll do anything to avoid them. Enter banks.
People’s dislike of banks is keeping them from using checking accounts at a rate that is nearly double what it was in 1989. That’s according to the Federal Reserve’s 2016 Survey of Consumer Finances, which found that of the families who don’t have checking accounts, nearly 26% said it was because they didn’t like dealing with banks. That’s up from 15% in 1989.
Other reasons for not having a checking account include not writing enough checks to make it worthwhile (25.2%) and the high cost of service charges (13.4%). But the most commonly cited reason is a dislike of banks, which stands at 25.7%.
Shunning checking accounts can be costly
After the 2008 financial crisis and the more recent Wells Fargo fake-accounts scandal, it’s not hard to understand consumers’ disenchantment with banks. But not using a checking account can be costly.
Without one, consumers have to rely on alternative financial-service providers for services such as check cashing and money orders. These providers typically charge more than traditional financial institutions. A 2016 NerdWallet study found that not having a bank account can cost Americans nearly $500 per year, money that might otherwise be put into a savings account.
If you think you could benefit from a checking account after all, using an online-only bank is an affordable option. Most keep fees to a minimum, and annual percentage yields tend to be higher than those at brick-and-mortar banks. And if you’re tired of driving to a branch, most have excellent online and mobile platforms, so you can complete your banking tasks from home.
» Interested in banks with low fees and strong customer service? Check out NerdWallet’s list of the best checking accounts