I t is estimated that about 40 million Americans do not have a bank account. The reasons for this vary. For many, they are unable to qualify for a bank account because of past bounced checks. Bounce too many checks, and you’ll find yourself in the Chexsystems. which many banks use to evaluate potential new banking customers. For others it’s simply a distrust of the banking system or frustration with limited hours or the hoops one has to jump through to get service.
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Whatever the reason, the unbanked often turned to expensive check cashing stores to cash their weekly
paychecks. Time Magazine wrote about this phenomenon. which costs consumers $10 billion a year in fees charged by check cashing stores, payday loan providers, and others. It’s not at all uncommon for consumers to spend 3% or more to get a paycheck cashed.
In addition to high cost, check cashing stores present several other problems to consumers. First, there is the question of security. Taking your paycheck to a check cashing store and walking out with hundreds of dollars in cash is like wearing a bulls eye on your back. Second, there is simply the question of inconvenience. The weekly trip to a check cashing store takes time and gas.
For those that can’t get a checking account or simply don’t want one, there is a no cost, convenient, and safe alternative to check cashing stores–a free prepaid credit card with no fees or low fees.
List of Low Fee and Free Prepaid Cards
The key to finding the right prepaid credit card is to find one that charges no fees or very small fees. All prepaid cards charge various fees, but some of them waive some or all of the fees if you sign up for direct deposit. So here are the top free prepaid cards and low fee prepaid cards to consider.
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