Are banks necessary?

[curious123]

It seems as though younger generations are turning to prepaid debit/credit cards rather than using a bank. The few people that I've talked with said the main reason they prefer the prepaid cards is because you can't overdraft. They cited examples of losing track of how much they spent and overdrafting as much as $200. The banks charge a really high fee for this.

People (in the U.S.) are said to be "underbanked" if they don't use a bank exclusively. This seems misleading to me. Granted, I've only talked to a few people, but it sounded more like they were intentionally opting out of banking and using alternative services that better meet their needs.

I'm wondering if these people will have trouble accessing credit down the road.

Are banks necessary?



Also, If anyone here uses prepaid debit/credit cards, please consider taking this quick survey I made. I'm in the process of building a free mobile payment app and would like offer similar features of a prepaid debit/credit card. (Nevermind. Can't post links.)

[fetzer85]

No, banks are not necessary, but they're an integral part of our economic system.

I don't know of anyone who uses prepaid cards and doesn't have a bank account. The bank account tends to simplify things...direct deposit, bill pay, etc. If you're lousy at managing your money I don't believe prepaid cards are any kind of solution really, they're more of a roadblock between you and your issues.

[BuckyBadger]

I can't imagine living life with nothing but prepaid credit/debit cards. Seriously. How would that even work? I can't pay my mortgage with a credit card - it's paid from my bank account. Same with many of my utilities.

I disagree with the premise that this generation isn't finding banks necessary.

[disneysteve]

No, banks are not necessary, but they're an integral part of our economic system.

I don't know of anyone who uses prepaid cards and doesn't have a bank account.

I disagree with the premise that this generation isn't finding banks necessary.

Folks, keep in mind that the original post was intended as spam until the poster realized he couldn't insert the link he wanted to.

[BuckyBadger]

Folks, keep in mind that the original post was intended as spam until the poster realized he couldn't insert the link he wanted to.

Thanks for explaining! That makes sense.

Will stop feeding the troll.

[97guns]

ive worked with many people that never had a bank, everything in cash. they would cash their check at the local liquor store every week and these were 30-40 year old men

[disneysteve]

Thanks for explaining! That makes sense.

Will stop feeding the troll.

I and the other moderators delete the outright spam but I sometimes leave things up if I think they raise interesting topics to discuss. So please feel free to discuss this. As 97guns points out, there are many people who fear the banking system for some reason. I don't think this is a generational thing necessarily. Folks can be paranoid at any age .

There are also people who can't get a bank account because they can't afford the fees and can't meet the minimum balance requirements. There are also citizenship issues in some cases.

[bjl584]

Definitely spam, but an interesting question.

I certainly wouldn't want my entire paycheck dumped onto a prepaid card. I'd have to think that people that do that are not very financially savvy. I've known several people without bank accounts and all of them were broke.

[rennigade]

Whether this was spam or not. There may very likely be a day when banks serve no purpose, at least the brick and mortar ones.

Take bitcoin for example. Its somewhat confusing to most (even myself,) but as other digital currencies take shape, so will the ability to use it (it will become more user friendly.)

Right now if I travel to india for example...I cant just hand them a $5 US bill. I have to convert the USD first, then I can purchase. Heck I dont even know the conversion rate? Maybe our money is worth more, maybe less? With one global denomination, that simplifies all of the money exchange nonsense.

Fees as we know it would be a thing of the past. As long as the person on the other side of the world has a bitcoin wallet, I dont have to go to the grocery store and wire money through a moneygram thing. A couple times a week when I go to Giant, I see spanish folks filling out forms to send money. How much do they get charged a year for this? Way too much in my opinion. Its an archaic way of transferring money from one person to another.

And for anyone thinking bitcoin and digital currency are a joke...right now amazon, tigerdirect, home depot, newegg and many other mega stores are accepting bitcoin.

[corn18]

I know all currencies can vary in their relative value, but bitcoin is stupid. All it has done since Oct 2013 is lose 79% of its value. Not exactly keeping up with inflation. If it ever stabilizes and becomes more ubiquitous, it might make sense, but you won't catch me with any bitcoins any time in the near future.

[GREENBACK]

One of the most obvious reasons for having a brick and mortar bank is the cheap availability of a good old fashioned safe deposit box. I keep things in mine that are invaluable and I'm not sure where I would put these items otherwise.

[disneysteve]

There may very likely be a day when banks serve no purpose, at least the brick and mortar ones.

The only times I step into a physical branch are:
1) when I need change
2) when I have a check that for some reason won't scan with my iPhone app or the ATM

One of the most obvious reasons for having a brick and mortar bank is the cheap availability of a good old fashioned safe deposit box.

This doesn't require a bank. There could just be a security company that operates a vault location. There actually used to be one of these near my house in Philadelphia years ago. I don't know if it's still there. Basically a secure equivalent of a Public Storage kind of place.

[GREENBACK]

This doesn't require a bank. There could just be a security company that operates a vault location. There actually used to be one of these near my house in Philadelphia years ago. I don't know if it's still there. Basically a secure equivalent of a Public Storage kind of place.

I've never heard of this kind of place. Are they affiliated with banks? Where are the vaults at? Are they FDIC insured? Would you feel as comfortable leaving an extremely valuable item in them as you would with a typical bank SDB?

[rennigade]

I know all currencies can vary in their relative value, but bitcoin is stupid. All it has done since Oct 2013 is lose 79% of its value. Not exactly keeping up with inflation. If it ever stabilizes and becomes more ubiquitous, it might make sense, but you won't catch me with any bitcoins any time in the near future.

Sure, digital currency is in the beta version. I dont own any either but I like what it represents and how it can be used. Its impossible to overlook how beneficial it would be to have a global currency and the ease it would make money transfers possible.

Its a generation thing. You're older...and like most older people you have a difficult time with change. Some people just cant accept progression and how things are going to change whether they like it or not. Unfortunately thats the reality.

Heres an example. Jesse James the outlaw died in 1882. Imagine if we could go back in time right before his death. Now imagine telling Jesse James and the people around him that one day we'll have metal cylinders with wings that transport people through the sky at 500mph...and that horses will primarily be used for sport and recreation. They would think you're nuts. That was only 140ish years ago. A blink of an eye.

I now understand why my grandparents are they way they are. They grew up so close to things like the civil rights movement and womens suffrage. They could never accept the change that happened. One day my kids kids will look back and laugh at that fact that gays couldnt marry, that pot was illegal, and more than likely laugh at that fact that we used to carry around metal/paper objects that we exchanged for goods and services. Hell they'll also get a kick out of our latest iphone6. That thing will be a brick compared to what phones will look like in 70 years from now.

[corn18]

Its a generation thing. You're older...and like most older people you have a difficult time with change. Some people just cant accept progression and how things are going to change whether they like it or not. Unfortunately thats the reality.

Wow. I guess you have it all figured out. I'll go back to gumming my food and trying to remember who I am.