A question about : Are banks necessary?
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.)
Best answers:
- God knows who you've been talking to, but I don't know a single person who uses one.
If you can't budget yourself to not go into your overdraft, then there's not a problem with the banks, there's a problem with your budgeting. - Yes they are necessary.
Banks already have free mobile payment apps.
If there were no banks how would you top up a pre paid card? - no banks would mean no holding accounts which service these cards. - If they lose track of how much they have spent then they wont know how much credit is left on their pre paid cards either.
The problem is you have been talking to Americans.
You dont need banks as long as you have a big enough mattress and never need to borrow money from one or get a mortgage etc.
Cards can be topped up through merchants but that usually costs. Topping up from a bank is usually free. - curious1234, are you aware that this is a British web site? You may not get the response that you expect.
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