Being Unbanked

Being Unbanked

What does it mean to be unbanked? What does it mean to be underbanked? What are some of the reasons some people are unbanked or underbanked?

Learning Objectives

​After this lesson, you should be able to:

• Explain who is typically unbanked and the reasons that they are unbanked

• Compare payroll and prepaid cards to debit and credit cards

• Detail the consequences of being unbanked

• Explore banking status in regions across the U.S.

Poll

What percent of teens have opened a bank account?

• About 10

• About 25%

• About 50%

• About 75%

• About 90%

High School Banking

​Are you banking yet?

Now that you are aware that over half of teenagers have some experience with a bank account. Read the following article , to learn more about opening a bank account while you are still in high school. Then be prepared to answer a few questions.

How to Open a Bank Account as a Teen | Get SchooledGet Schooled

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Poll

Do you have a bank account currently?

• Yes

• No

Poll

Why don't you have a bank account?

• I do have a bank account.

• I don't have enough money to open a bank account

• I don't trust banks with my money

• I am not old enough to have a bank account.

• Other reason

Poll

When do you think you will open your first bank account?

• I already have a bank account.

• I will open an account before the end of this school year

• I will open an account during summer vacation

• I will open an account during my Junior year

• I will open an account after I graduate high school

Open Ended

What are the benefits of opening a bank account as a high school student?

Open Ended

What are the reasons that young people might decide NOT to open a bank account?

Open Ended

What do you need to open a bank account, if you are under the age of 18?

The Cost of Being Unbanked

Read about it

Being unbanked or underbanked means that you either don’t have access to or choose not to use a traditional bank which leads you to use services like payday loans and check cashers.  Read the article about being unbanked.  Then, answer the questions.

The Costs Of Being Unbanked Or Underbanked – Forbes Advisor

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Open Ended

According to the survey mentioned in the Forbes article "The Cost of Being Unbanked or Underbanked", what are some of the reasons that people are unbanked?

Open Ended

What are some of the major downsides of being unbanked?

Open Ended

Many people choose to be unbanked due to a lack of trust in traditional banking services.  Why do you think some individuals place more trust in alternative banking services?

What is Pre-paid card?

And how does a pre-paid card work?

Due to the cashless nature of today’s world, many who are unbanked rely on prepaid cards to complete transactions.  Read the article on prepaid cards.  Then, answer the questions.

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Open Ended

What’s the difference between a prepaid card and a debit or credit card?

Open Ended

What are the downsides of using a prepaid card?

Payroll Cards

​An Alternative to Direct Deposit?

Instead of issuing paper paychecks that you would have to go to a bank to deposit, employers are mostly using direct payment to a bank account.  But what if you don’t have an account to deposit your pay into? Read the article about payroll cards.  Then, answer the questions.

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Open Ended

Why might an unbanked employee choose to use a payroll card over receiving a paper check?

Open Ended

One of the main disadvantages of payroll cards is fees.  What types of things might you be charged for when using one of these cards?

Banking Status by Region

​Interactive: What is the banking status is your region? 30 minutes

Now that we know what it means to be unbanked, let’s explore the banking status in regions across the U.S. Follow the directions on the worksheet to complete this activity.

Multiple Choice

Which is a disadvantage of using a payroll card?

• You cannot withdraw your money for cash.

• Many payroll cards charge fees.

• You cannot use your payroll card as a debit card.

• It is challenging to use your payroll card for purchases.

Multiple Choice

All of the following are reasons that a person might be unbanked EXCEPT… 

• Not trusting the banking system

• Not having enough available money to maintain an account

• Not having a bank within close distance to your residence

• Not having a credit card account from a traditional bank

Multiple Choice

Danielle is unbanked and is considering using a prepaid card.  Which of the following would be BAD information to give her about prepaid cards? 

• Prepaid cards are a good way to build credit because they work like credit cards.

• Prepaid cards could have a lot of fees associated with them including transaction and loading fees

• Prepaid cards are usually accepted everywhere debit and credits cards are accepted

• Prepaid cards are a viable way for the unbanked to complete online transactions