Are banks necessary?

curious1234

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.)

thebritishbloke

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.

Voltaire7

curious1234 wrote: »

The few people that I've talked with said the main reason they prefer the prepaid cards is because you can't overdraft.

That's really a rubbish, rubbish reason.

jonesMUFCforever

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.

curious1234

jonesMUFCforever wrote: »

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.

Maybe I should have asked if "banks are necessary for everyone". Or maybe even said "traditional banks". I haven't stepped foot in a bank in over a decade.


Cards can be topped up through a merchant.


Metabank is a major issuer and they are killing it. There is a lot of demand. I would like to know why. I'm sure there are more reasons than poor budgeting.

forgotmyname

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

forgotmyname wrote: »

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.

Cards can be topped up through merchants but that usually costs. Topping up from a bank is usually free.

They might lose track of how much they spend, but the card will not allow them to overdraft and rack up fees. This is the only reason I've heard so far as to why so many people are using these instead of banks.


With the app I'm working on, you can top up your account for free using a merchant.

Fruit_and_Nut_Case

curious1234, are you aware that this is a British web site? You may not get the response that you expect.

agrinnall

curious1234 wrote: »

With the app I'm working on, you can top up your account for free using a merchant.

Obvious precursor to spam, go away and leave us alone.

DCFC79

curious1234 wrote: »

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.)

Well them people you spoke to should learn how to budget. I don't know anyone who uses a prepaid card for day to day spending, yes they are useful for going on holiday.

JKSandy

thebritishbloke wrote: »

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.

I agree with this statement, I only know of one only one person who uses one and that's probably due to their dodgy dealings.