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Can someone live without a bank?
January 28, 2010 3:55 PM   Subscribe

I'm starting to toy with the idea of ditching banks altogether. Can it even be done? Has anyone successfully done it?

I'm usually a very rational man, I assure you. However, when it comes to using a bank/credit union my irrational principles and control issues go to 11. I am opposed to the whole system for a number of reasons ranging from the somewhat valid to the nutball crazy, but I've always considered it a necessary evil. I guess my question is whether this "evil" is actually necessary.

I suppose the biggest hurdle would be finding a way to pay bills. I don't think anyone but the water department takes cash, and paying anything over the internet would be basically impossible.

The next problem would be finding a way to get paid, since most employers use either direct deposit or a check.

So is it possible to live in today's world without being tied to a bank? If it's possible, can it be is the sacrifice of convenience unreasonable?
posted by Willie0248 to Work & Money (26 answers total) 2 users marked this as a favorite
 
I suppose the biggest hurdle would be finding a way to pay bills. I don't think anyone but the water department takes cash, and paying anything over the internet would be basically impossible.

Most will accept money orders, which you can buy at almost any convenience store.
posted by hermitosis at 3:56 PM on January 28, 2010 [1 favorite]


Where do you live (exactly)?

What bills do you pay to who?

Who do you receive payments from?

What activities do you want to keep doing?

Because without answers to all of the above, this is just a rant.
posted by hal_c_on at 3:58 PM on January 28, 2010 [1 favorite]


The unbanked: http://www.google.com/#hl=en&source=hp&q=unbanked&aq=f&aql=&aqi=g10&oq=&fp=64df356c6a3f8304
posted by dfriedman at 4:01 PM on January 28, 2010


When you say "live without a bank" do you also mean no loans of any kind, even a mortgage?
posted by cabingirl at 4:03 PM on January 28, 2010


@cabingirl

You're right, I should have been more clear! No, I have no qualms with loans. I'm thinking more about checking accounts - just where someone stores their money.
posted by Willie0248 at 4:05 PM on January 28, 2010


You can always cash checks at the bank they are drawn from, but it usually costs $5 and a thumb print.

You can get money orders. But they usually cost from $1-$5, and if something goes wrong, or they get misplaced, you will spend several months trying to get your money back.

I've tried the route of avoiding banks because I don't like their policies or fees either. Let me assure you that it is less painful to find a good credit union.
posted by 517 at 4:07 PM on January 28, 2010


had an employee once who refused to use banks.

things i know about that he had difficulties with:

renting an apartment - he ended up borrowing 6 months worth of rent from a family member to get approved.

getting his pay checks - at first he paid a fee at a check cashing place, then he cashed it at the bank the check was drawn from (lucky for him it was a national bank), and when we switched to all direct deposit or a paycard he had to go the paycard. according to him, the paycard was a major pain in the ass (one time he didn't get paid - if he had direct deposit the situation would have been fixed within 12 hours - as he didn't, they couldn't fix it until the next paycheck due to something wonky with the paycards they used - i ended up loaning him the money he needed for rent. without that, he probably would have been evicted)

renting a car - hard without a credit card, basically impossible without a bank account

wasn't able to buy most anything online (some people took money orders, but that list gets smaller every day)

got mugged more than once due to the amount of cash he had to carry to get money orders

ended up spending in money order fees what he would have paid in account fees

had trouble getting cable

he still seemed happy with his non-bankness. fwiw - i have a bank account, but i've never had a credit card, and while i've certainly come up against hassles, it hasn't been too bad.
posted by nadawi at 4:10 PM on January 28, 2010 [2 favorites]


I hate banks also but I would hate worrying about my cash being stolen or burning in a fire more.
posted by Burhanistan at 4:16 PM on January 28, 2010 [1 favorite]


You would spend a lot more time thinking about money.
posted by Jaltcoh at 4:22 PM on January 28, 2010 [7 favorites]


I don't have a bank account, and while it can be done you end up having a lot of fees. For example, I use gift cards to buy stuff online, which is effective but the monthly fee prevents any type of long-term saving plan that doesn't involve cash. I also usually lose the last few $'s on the card because most places don't accept cards under a certain amount anyway.
posted by biochemist at 4:26 PM on January 28, 2010


I had a neighbor who went most of his life with only a savings account. When he needed to pay bills, he went to the bank (no ATM card!), withdrew cash, then went to the gas station nearby, which issued money orders.

You could have a bank account to serve as a gateway for your paycheck and immediately withdraw everything except for a minimum balance.

You'd be left with the problem of online shopping, if that's important to you. There are prepaid cards out there, but they're a bigger scam than regular credit cards.

You could also live in "today's world without a bank" if you moved to a country where banks, checks, and credit cards are less of an issue.
posted by adamrice at 4:39 PM on January 28, 2010


is the sacrifice of convenience unreasonable?

I would say most definitely yes. Our financial lives are built around banks. You will constantly have to plan ahead for how to buy and pay for things. This does not seem worth it. What are your major qualms with banks? I don't like them either, which is why I try to bleed as much money from them and make myself as unprofitable a customer as possible.

Reward credit cards, reward checking, high yield savings, never carry a balance, etc.
posted by jckll at 4:52 PM on January 28, 2010


I have no experience living without a bank account, but my place of employment does offer the option of getting paid via a paycard. I imagine that this option is offered for people that for whatever reason do not have a bank account. I'd be wary of this option. At least where I work, the paycard is like one of those pre-paid credit cards, and there is a $3.50 charge per transaction! I'm not sure how standard that is, but definitely read the fine print if this is an option where you are employed.
posted by kaybdc at 4:53 PM on January 28, 2010


If you keep your cash under a mattress, inflation will slowly eat away at it. So you'd better spend it when you got it. Something to consider.
posted by seliopou at 5:00 PM on January 28, 2010


How about joining a credit union?
posted by ifandonlyif at 5:00 PM on January 28, 2010


Is there a reason why you have credit unions lumped in with banks? Credit Unions are run as not-for-profit institutions. Without shareholders they're a lot more invested in serving their members and community. They're also a diverse bunch and you might be able to find one that at least satisfies some of what you find objectionable about financial institutions. You could even have an account with just a little money in it that would be handy for renting cars and getting cable.

Still, ignore this suggestion if you're eager to live completely disconnected from the financial grid.
posted by Alison at 5:19 PM on January 28, 2010


The next problem would be finding a way to get paid, since most employers use either direct deposit or a check.

Someone touched on this above, but besides the skeevy check-cashing places, you can take a check back to the bank it was issued to and they will cash it for you on the spot, no fees. Even BoA will do it! (But I don't know what you've got agains the credit unions. As far as financial institutions go, they are pretty benign, or at least non-malignant.)
posted by whatzit at 5:46 PM on January 28, 2010


How much is your time worth? I'm not exactly in love with my credit union, but reading the above makes it sound like you'd spend a lot of time taking care of things that take me approximately one mouse click. No ATM means you'd better get your cash before that long holiday weekend.
posted by fixedgear at 6:11 PM on January 28, 2010


Since you don't have a problem with loans, I'll explain why I asked. I think you'd find it difficult or impossible to qualify for a mortgage without an established bank account, especially now. The application process involves a close look at your finances and they want you to prove that you're a good risk.
posted by cabingirl at 6:14 PM on January 28, 2010


is the sacrifice of convenience unreasonable?

That's up to you. My answer is "OMG YES!" but it depends on what your time is worth to you.

I LOVE using online bill pay with my credit union. Every month, my SO spends a good hour writing out checks or visiting the websites of various businesses so she can pay her bills. Meanwhile, all but 2 of my bills are set up to pay automatically, and the others take me about 5 seconds to send.

And direct deposit is humankinds greatest invention. I haven't had to physically go to my credit union in 3 years (and that was only to sign for a vehicle loan with a fabulously low rate).
posted by coolguymichael at 6:15 PM on January 28, 2010


I've gone bank-less, but I was making peanuts and totally off the grid. I can't imagine that going without a bank would be less of a hassle than the alternatives, since it seems like you still care about lots of the amenities that come with a bank account: credit, paycheck, utilities.

Banks suck, fees are awful, and reading about how much the executives get paid makes me want to cry. But your mattress isn't insured by the FDIC, fees for check cashing/money orders are a nightmare, you can't get a cell phone, and unless you're willing to move to a commune or barter everything, you'll have to deal with plenty of people who won't get it. You'd end up trading a very convenient, centralized place that takes your money for lots of smaller places ready to take your money.
posted by blazingunicorn at 6:35 PM on January 28, 2010


I did this for years. It wasn't as bad as all that. People managed for thousands of years without buying things on the Internet, after all. Once in a while you end up with some weird money order from a bank that has one branch in Nebraska that's a royal pain to get anyone to cash, but mostly it's tolerable if you don't mind check-cashing fees.

That said, I spent far more time in banks when I had no bank account than I do now with automatic bill payment and a debit card.
posted by enn at 6:43 PM on January 28, 2010


Both my girlfriend and I killed our bank accounts about two years ago. I go to the bank my employer uses and get them cashed for free. My girlfriend's goes to a check casher and doesn't pay too much to get them cashed (her employer's bank is small and out of state).
We pay for most everything with cash, including rent, and for when we really need a card we have a pay-as-you-go Master Card. You can get one at most any check casher or payday advance type place. We have to pay a dollar or two every time we use it (depends if it's run as credit or debit) but we only use it a few times a month- for bills and maybe a couple pizzas.
Most places don't even acknowledge that it's not a proper credit or bank card. The only time it's been turned down was when I tried to rent a car with it... though u-haul has no problems with it.
If you don't even want to get the type of card we have, every bill we have (cable/internet, water, gas, trash...) have physical places where we can pay. Cell phones, cable, etc. can be paid at that company's store, and utilities usually have pay stations set up all over- most any place that does western union will do it, including the check casher you take your paycheck to.
As for why we're bankless, I am bad with my money and was paying waaaaay more in bank fees than I do for a check casher and the card fees. I can't join a credit union because my credit is bad.
Girlfriend ditched banks because her bank lost $2000 of hers and couldn't find it for a month and a half... and then killed her credit line as soon as the two grand was found.
Banks suck.
posted by gally99 at 12:15 AM on January 29, 2010


>you can take a check back to the bank it was issued to and they will cash it for you on the spot, no fees. Even BoA will do it!

That is true, but watch out for one big bank, let's call it StageCoach USA. When my 20-year-old daughter took at $200 check from my wife's account to a branch to cash it, she was hit with a high-pressure sales pitch to open a new account with them. Appalling behavior, in my eyes.
posted by megatherium at 3:59 AM on January 29, 2010


What would you do with your savings? Keeping large amounts of money around the house doesn't sound safe to me. If your house was robbed, you might have a difficult time getting insurance companies to pay you back.

What about having a bank account do you find "evil?" There are plenty of places where you can get a free basic checking account or savings account. The sales pitches can be annoying, but you can set the account up online and then just use an ATM to make your initial deposit.

Being robbed is far more likely to happen than some sort of financial castrophe in which all the banks lost all of their money, which is what I imagine would have to happen for a bank to actually "lose" your money.
posted by parakeetdog at 12:41 PM on January 29, 2010


Keep a jar of change to pay for money orders. Comparison shop for those. CVS here is a dollar while a run down grocery store down the street is 29 cents up to a certain amount. I think to pay a dollar you have to go up to like 1000. Look around and you might find it cheap. If you grocery shop and find a cheap money order there then just get them at the same time. There's convenience.

I agree with the pay as you go cards. You can use those almost everywhere. I'm not sure about paying bills but its worth the google.

If you do decide to go the way of mortgage, assuming you haven't, make sure that you sign on for a cheapo bank account months in advance. I can't remember exactly but I think its at least 60 days but I say as long as possible so that it is easy to track your money.

Opt for checks at work and cash them at their bank. I've never had to do this without a bank so I can't comment on how much they would charge, if anything.

Since you may be dropping off payments, try cutting down in other places to make up for it if you're likely to worry about the toll it will take on your finances and gas as a whole. You could also buy a book of stamps and envelopes once every couple months and not waste gas driving around. Just depends on your comfort level.

I'm wanting to cut out my bank account pretty soon but may keep one on hand just in case for mortgage reasons. I don't pay my bills online right now anyway so this is closer to what I do now. Spending extra time to write out checks and money orders can be done while I'm budgeting (I budget weekly) so its not taking up too much extra time. On top of that I tend to divide my paycheck when I get it so I don't tend to have a large amount of money lying around.

As far as where to put money for savings, I'm working on it which is why I divide my money weekly and pay bills ahead of time. Nothing is lying around beyond change and small bills. If thats not possible for you then a credit union for savings could work, a fireproof bolt down safe or the freezer, I don't know. But you won't have nearly that hard a time keeping away from banks just requires a little more time an effort. I spend more time at banks now then I want to so might as well switch it over.
posted by grablife365 at 6:49 PM on January 30, 2010


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