Why People Are Turning Their Backs On Traditional Banks

It used to be common for people to open accounts at their local bank, but this is slowly becoming a thing of the past. The fact that there are so many fees and penalties associated with them makes many people look for alternatives. This is not always a good thing since some of the options they select are not insured by the FDIC and offer little protection for those who have issues.

Online Banks

There are some banks available these days that are available strictly over the Web. The big draw of these banks is the fact that many of them do not charge fees for their services. In many cases, you can use in-network ATMs, make transfers and spend more than you have available without incurring any fees. Imagine that. These are all activities that would typically cost you greatly when doing business with a traditional bank. The only drawback is the fact that there are often no physical locations, which makes things like depositing cash a hassle, but many do not mind since they will be saving money in the end.

Prepaid Debit Cards

Instead of worrying about monthly fees and being slammed with overdraft costs, some people are signing up for prepaid debit cards. While this can have its issues, finding the right can save you quite a bit of money. There are some cards that waive fees for those who have direct deposit. As long as you take advantage of this, you will only have to pay when using an ATM. This is worlds better than the huge slap you get from a traditional bank when it comes to penalties and other fees.

Mobile Payment Apps

These are becoming more popular all of the time and for good reason. The fees that are typically charged for these is much lower than banks. In addition, you are not usually required to pay anything monthly, nor are you forced to keep a balance or make deposits in order to avoid penalties. If you send money internationally using your bank, the fees can be rather astronomical. Using an app like Paypal or Cash App is much more cost-effective.

The fact that more people are using the three options here shows that they are getting tired of all the money they have to pour into traditional bank accounts. With that said, there are some merits associated with being an account holder, so others are staying put.