A recent survey released by the FDIC provides interesting data about Americans’ banking habits; one of the most notable findings is that the number of Americans who have moved their money from mainstream banks elsewhere has risen by 821,000 households in just two years.
What’s the reason behind the trend? A recent article in TIME Magazine titled “America to Banks: We’re Just Not That Into You” offers an answer: fees.
Financial reform that came into effect over the past couple years cut into the fee revenue from automatic overdrafts and debit card interchange, especially at large banks. To make up for this loss in revenue, banks made up new fees: monthly maintenance fees, getting copies of statements, closing an account…the list goes on.
Fed up with the sudden onslaught of new fees, after not being charged any for quite some time, prompted many Americans to close their accounts with big banks and move their money elsewhere, explains the TIME article.
The FDIC survey also found interesting data regarding American households not doing their banking anywhere. One in 12 households or 8.3% are unbanked (no one in the household has a bank account whatsoever), while another roughly 20% are “underbanked”; they have a bank account but still use payday loans, prepaid debit cards, and other alternative financial products.
TIME points out that some Americans opt of traditional banking altogether because they believe they don’t have enough money for a bank account. Approximately one-third of Americans cite this as their reason for staying away from banks, according to the survey.
Prepaid debit cads are also taking some business away banks. It’s an alternative for those who think they can’t afford an account as well as those who could pay the fees but don’t want to, TIME points out.