How In God's Name Can You NOT Have a Bank Account?

Miscellaneous and Personal Stuff I Must Share
61

The employees without bank accounts now could still open an account for the direct deposit and then go to the bank and get out their paycheck in cash and pay everything in cash or money orders if they really wanted too. It would take the same amount of effort as taking the check to the bank and cashing it without the risk of losing the check on the way to the bank.

I am also in a credit union (probably the same one Otto uses) that has a $5 minimum to join and that pays for your savings account. As long as you have $5 in the credit union, nobody charges you anything. In a day where $5 doesn’t buy 2 gallons of gas, anyone should be able to come up with $5 by correctly inflating their tires. Credit Union membership has benefits like cheaper auto loans, free ATM cards, low-cost overdraft protection loans, free online banking and webpay, and prequalifications for lower than average interest rate home loans and second mortgages. Again, 0.24% lower on a car loan more than makes up for the $5 you have to leave in the bank.

I don’t understand not planning for the future either. I went to an information session for tax sheltered annuities at my workplace and was the only person there who wasn’t well into their 40’s or older. These people had no idea what they needed to retire and how to save for retirement. I am not doing all that I should, but I know that I am in that situation and how to get out of it. And I am decades away from retirement. Some of these people were 5 years or less from their target retirement date. These people weren’t poor or undereducated, they just never bothered to look into their future and make plans.

62

[QUOTE=Tenar]
Since you usually have to provide a Social Security card to open an account, and since there are all kinds of tax implications, etc.
[/QUOTE]

The people who pay you already have your SSN. What are these tax implications you speak of? You pay a bit of income tax on your interest if you earn any interest at all. You won’t pay more in taxes on interest that you will earn in interest, so I can’t see how this is a huge scandal.

63

[QUOTE=Tenar]
Okay, this part confuses me. It seems to imply that the COMPANY will open the account for the person if the individual fails to do so. Since you usually have to provide a Social Security card to open an account, and since there are all kinds of tax implications, etc., I can’t imagine that an employer can open an account on an employee’s behalf without their permission.
[/QUOTE]

s I understand, what will be set up for non-conpliant employees is not a “bank account” per se-- the money will be electronically transfered to the bank and they will be able to draw their pay from it via a debit card, but the fees are outrageous. IIRC, it woun’t work like a normal debit card which you can use in some stores. The employee will only be able to use it at the bank to draw funds.

64

Ok… I have a question- if you don’t have a bank, do you roll around with (say) $1200 dollars in your wallet every pay day, until you spend some portion of it?

(this may account for the obviously poor people I’ve seen at stores with multiple $100 bills in their wallets)

And say you don’t spend all of it, do you do something odd like bury it in the backyard?

65

I’m surprised only one other person has mentioned it, but I also really don’t like the idea of forcing employees into getting a bank account. We did something similar recently at my company, mainly to go paperless, but we were given the option to go without the direct deposit still if we really wanted to. I’ve had a bank account for my adult life, but I don’t see why you should be made to have one if you just don’t want to.

66

[QUOTE=Anaamika]
I’m surprised only one other person has mentioned it, but I also really don’t like the idea of forcing employees into getting a bank account.
[/QUOTE]

I don’t know about other areas, but around here it’s become pretty common the past few years. I’ve worked for two companies in the past 5 years that have mandatory direct deposit. If you want your money, you have to have a bank account for them to drop it in.

67

[QUOTE=Annie]
If one owes child support or taxes, direct deposited paycheques could be subject to garnishment. …
[/QUOTE]

This is the very reason I didn’t have a bank account for years. I had full custody of the child but the ex-wife went to the state and claimed welfare or something. Next thing I know money is being taken out of my account. The next day I received a notice in the mail about what was going on. It took YEARS to get this cleared up. They nabbed everything they could get their hands on. Tax refunds, savings. Everything. It was only until a few years ago did we get it settled. I never saw the money they took (which I didn’t owe) again.

Try raising a child or living day to day when your savings is drained and money vanishes from your checking account. It’s also hard to hire a lawyer when they take all your money.

During that time all my paychecks were cashed at the issued bank. They were garnishing some from it but at least I was getting something and I didn’t have the fear of bounced check fees when they decided to drain my account dry.

Later I worked for myself so there was no garnishment (which was one of the main reasons I wanted to go into business for myself).

The whole thing really sucked.

Not long ago the IRS drained both my wife and my accounts dry. We owe a bit of back taxes and have a payment plan set up with them. Well, one day they decided a payment plan wasn’t good enough and decided to rape our accounts of every last cent. This of course resulted in several hundred dollars in bounced check fees. At the end of the day they put the money back and the banks were nice enough to spilt the difference in the fees. Once screw up at the IRS cost us about $150.

I managed to get a series of NSF fees about a year ago because a gas station electronicly pinged my account for triple what I bought. It was a tight month and I was down to the wire in my checking account. I only had a few days until payday so I didn’t bother transfering money to checking from another account. I made a few minor check card transactions and then got gas. According to my check book I would have has about 20 bucks left. The gas station put a hold on about 30 dollars in my account. This put me $10 in the red. When all the other transactions when through they got dinged with a NSF charge. After all the transactions cleared I was in the hole a hundred or more dollars all in bank fees. It took days to clear up and I was very close to closing my account and going back to cash under the mattress. The bank himmed and hawed but ended up doing the right thing.

The same thing happened another time when someone proccessed a $100 charge twice. It put me in the hole and I got clobbered with NSF fees. That account I did cancel because Bank of America were not going to reverse the charges. It took several days and hours of lost time getting that fixed. After it was and the charges were reversed, I closed the account.

At least when I kept cash under the mattress I always knew how much was going to be there from day to day. With money in a bank, one mistake by a cashier with fat fingers and you’ve got a big pain in the ass on your hands and zero access to money you own. Until it is cleared up there is nothing you can do about it and you are dead broke.

Right now I’m doing a mixture of the two. I keep enough in my checking account to pay for a few things but I also keep enough cash on hand to survive a month or two (including one months rent). I also have two other accounts with money at different banks - which didn’t help in the case with the IRS.

68

[QUOTE=Lissa]
Child support comes out of a state employee’s check before they even get it.
[/QUOTE]

Not just state workers. One of my previous jobs involved reviewing accounts payable outgoing checks at a private company. Every payday there was a stack of checks made out to various agencies charged with child support collection, spousal support collection, judgment garnishes, etc.

69

[QUOTE=bump]
Ok.. I have a question- if you don’t have a bank, do you roll around with (say) $1200 dollars in your wallet every pay day, until you spend some portion of it?

(this may account for the obviously poor people I’ve seen at stores with multiple $100 bills in their wallets)
[/QUOTE]

At my last job, people did this all the time. We worked in a not-so-great neighborhood and got an extra half-hour for lunch on our every other week payday. Plenty of my co-workers went to the local branch of the bank that the check was issued on, cashed it, stopped off in the stores that took electric, gas, cable etc payments and went back to work carrying whatever was left. They did this even though the local muggers knew exactly when the government workers got paid, and people where pretty regularly mugged after leaving the bank.

70

Keeping all the money I have in the world in cash either on my person or ‘hidden’ in my home would drive me nuts. While banks sometimes screw you (which I think means you need a different bank), a fire, or a robbery, or a not so trustworthy friend could wipe you out and you’d have nothing to fall back on. At least if a bank takes your money, there is a paper trail and proof that you once had that money and that it went somewhere without approval. I don’t like having $100 on me. I hate getting cash from the bank because I know that someone out there is seeing me leaving the bank and guessing that I have just taken out money and they are going to get some for themselves. But I verge on paranoid sometimes, too.

71

[QUOTE=tarragon918]
<snip>

As hard as it may be to believe, not everyone has a computer or wants to pay bills online. And some folks just like paying for things in cash.
[/QUOTE]

…huh? The only thing me or my parents have ever used banking online for is to be able to check how much money is in our accounts, so that’s optional. Every bill is either setup to be automatically taken out of the account or you go to the bank to pay it (either by teller or ATM).

I totally understand a nest egg for a rainy day under the mattress, but managing all my finances in cash? Scary. Like most of the other Canadians that have piped up, I just had a savings account. I don’t remember when I got it, I just remember I needed to find out about it for direct deposit for my first job.

72

Unless there’s some fundamental difference in the way Americans operate financially from the rest of the world (and it would appear this is indeed the case, judging from this and several other threads), having a bank account does not preclude paying for things in cash.

An example:

Bob works for Big Company Ltd. Every payday, Bob gets his pay direct debited to his Bank Account. Without going anywhere near “online banking”, Bob has several options open to him:

  • He can withdraw cash from an ATM, allowing him to pay his bills in cash if he prefers.
  • He can transfer money between his different accounts (say, from his main account to one especially set up for his mortgage/rent, and another one for his automatic payments, and so on)
  • He can leave his money alone, letting it accrue interest, or simply be somewhere safe, so he can save it up for something
  • He can put the money on his Credit Card
  • He can pay his bills via Phone Banking (or set up direct debit from his bank account, if he prefers, or via EFTPOS if he’s in Australia/NZ)

The idea of trying to survive without a bank account in the modern world strikes me as being about as sensible as trying to survive without breathing oxygen.

I know Australia is a lot more Electronic Banking-centric than the US (the amount of stuff I can do with my EFTPOS card is just mind-boggling, for example), but surely even the most paranoid gainfully employed person realises that it’s not a good idea to keep large sums of cash in the house?

Although, this does explain one of those things I’ve been wondering about for years: Why doesn’t EFTPOS exist in the US?
The answer appears to be the spectacularly simple and Occam’s Razor-worthy “Because a large percentage of people don’t have bank accounts”. :eek:

And Seven: I don’t know the specifics of your situation, but what was stopping you from simply opening another bank account at a different bank and getting your wages paid there instead?

73

[QUOTE=fetus]
Huh? What does this statement have to do with the line quoted?
[/QUOTE]

I could have phrased that better. It seems likely to me that his credit card payment was late and he was rushing to make sure it got in on time. I’m reminded of a buddy who had to wire his tuition money to his college because he was about two hours away from them dropping him from all his classes.

Generally this isn’t a bust type situation, but rather a methodical seizure of assets. Nobody is immune- having just one drug dealing housemate or renter or whatever can mean nearly anything can get seized. If you get wind that something is going to go down, you can move cash fast. But a bank account makes a solid record of how much money you have, and in a seizure situation the police are going to want all of that money.

And that’s not to say all these people are drug dealers. There have been cases of grandmother’s losing their assets because their grandsons decided to deal drugs.

74

[QUOTE=Martini Enfield]
And Seven: I don’t know the specifics of your situation, but what was stopping you from simply opening another bank account at a different bank and getting your wages paid there instead?
[/QUOTE]

For which situation?

75

[QUOTE=Seven]
For which situation?
[/QUOTE]

The one with your ex-wife and money vanishing from your bank account…

76

[QUOTE=RealityChuck]
…
However, I don’t know of any bank that sets a minimum for a savings account; you just don’t earn interest until you reach the minimum…

[/QUOTE]

Actually, we have a savings account at a bank that charges a monthly maintenance fee if the account balance drops below 300 dollars. It’s on the order of 5 or 10 dollars a month, which obviously would chew up the account balance in a fairly short period of time.

We were going to close the account when they started imposing that fee, but we have our safety deposit box at that bank (it’s the closest place to our house that has them) and the annual rent would double (from 75 to 150 a year) if we didn’t maintain the account. We figured it was worth the pathetic interest rate, to save the 75 bucks on the box.

77

When I got transferred from Spain to Philly:

  1. the person from HR told me she loved having to do the setup for Europeans because we always brought our ID, SSN and so forth and because instead of having to fight to convince us of the beauty of direct deposit, we came asking “is there a bank you’d prefer to work with? Since anyway I have to open an account, I figured I might as well ask”
  2. the person from the bank across the street did not want to open an account for me because I could not produce a PA picture ID, “merely” a foreign passport. Then I mentioned I had been sent over from That Building and she said “oh” in a tiny voice and agreed to sit down with me and open an account. We had the following piece of dialogue several times: she “you need an SSN to open an account”, me “I have one, let me give it to you”, she “but you’re a foreigner, you can’t have an SSN”, me “yes I am a foreigner and yes I have one”, she “oh, so you’re American”, me “no, but I have an SSN”. After iteration #6 she finally let me give her the number and typed it. The screen responded promptly by giving a name that looks suspiciously like the one in my passport and an address that, gee, matched exactly my Florida driver’s license. Yes, I had been their customer before, ain’t life nice? Can we open that account now, please?

If it had been for that woman, I wouldn’t have been able to open an account :stuck_out_tongue:

Mom and the accountant-bro came to visit. As I was driving home, we saw this loooooooong line going around two corners of a block. Bro asked “what’s that?” “A checking place, that’s all people who don’t have bank accounts, going to cash their check. They don’t qualify to open one or don’t trust the banks.” Bro verified that what he had understood was exactly what I had said and his response was “Wow. Never would have thought it possible… you know, I don’t think they show that in the movies. Hell, I knew you’d had problems with the lady from the bank, but this is weird.”

Of all the things they saw in the States, that’s the one which impacted him the most. Seeing NY’s water deposits and back alleys (“ok, so there really are these places you see in the comics”) was cool, but kind of expected and expectable. The checking lines were just alien to us.

78

[QUOTE=Martini Enfield]
Unless there’s some fundamental difference in the way Americans operate financially from the rest of the world (and it would appear this is indeed the case, judging from this and several other threads), having a bank account does not preclude paying for things in cash.

[/QUOTE]

No, it’s entirely like that here too. I had no idea so many people didn’t have bank accounts - most of the places I’ve worked since high school have required direct deposit.

79

Is it possible that one of the reason that for this reluctance in the U.S. to open a bank account is that there has been a greater history of bank failures in the U.S., contributing to more distrust of banks, than has been the case in other countries?

For example, in Canada, the last bank failures were in 1985, and those were two small regional banks. Nonetheless, that was serious enough to trigger a federal inquiry, chaired by a Supreme Court judge. Prior to that, the last bank failure had been in 1923. In other words, no banks failed in Canada even during the Great Depression: Canada’s Banks

By contrast, in the U.S. you had the savings & loans debacle in the late 80s - early 90s, and I believe bank failures during the Depression.

That different experience may lead to different views of the safety of banks as places to keep your money.

80

Is it possible that one of the reason that for this reluctance in the U.S. to open a bank account is that there has been a greater history of bank failures in the U.S., contributing to more distrust of banks, than has been the case in other countries?

For example, in Canada, the last bank failures were in 1985, and those were two small regional banks. Nonetheless, that was serious enough to trigger a federal inquiry, chaired by a Supreme Court judge. Prior to that, the last bank failure had been in 1923. In other words, no banks failed in Canada even during the Great Depression: Canada’s Banks

By contrast, in the U.S. you had the savings & loans debacle in the late 80s - early 90s, and I believe bank failures during the Depression.

That different experience may lead to different views of the safety of banks as places to keep your money.