Those who can’t take on credit card debt pay in other ways

A reporter for the Associated Press participated in a one-month experiment to see how much it cost those who don't have a bank account and can't take on credit card debt.

The report said she piled up $93 in fees and charges that those who are part of the banking system never have to worry about. That works out to over $1,100 a year for those who go unbanked. For example, she paid $28 to cash a paycheck, $1.50 for every money order she had to send out to pay bills, and a dollar or more every time she swiped her prepaid debit card at a store.

The report said many consumers don't have the ability to take on credit card debt for a number of reasons. The majority of those households that are considered under- or unbanked bring in less than $30,000 a year, and rely on services like check-cashing companies and payday loans. Many also rely on prepaid debit cards, but these carry their own fees, including paying just to set up an account. In addition, some may charge up to a dollar a minute to call the issuer's customer service hotline, or $5 every time the user adds more money to the account. However, there are many hassles associated with not using a credit card or bank that consumers may take for granted. For example, if someone with a prepaid card wants to use it to take cash out of an ATM, they are often hit with hefty fees to do so, with some companies charging up to $5.

Many consumers who can't get a credit card may have a history of bad credit and are no longer able to qualify for a new account from a lender. Many banks have tightened restrictions on the minimum credit score a person can have to qualify for even the most basic card.