Cash and Bad Credit

Many people with bad credit decide to pay everything in cash and avoid using checks, debit cards and credit cards.

This is a serious mistake because it can cost individuals a lot of money to operate on a cash basis. A lot of businesses won’t take cash payments so cash users have to purchase money orders or wire funds to make payments. Worse if you get paid in check you will have to use check cashing outlets or cash checks at grocery or discount stores which can charge to cash checks.

You may also be forced to use a debit card issued by your employer because many companies no longer cut paychecks. This means you’ll have to pay a fee to get cash from ATMs when you need it because the only way to get cash from a debit card is from an ATM or retail store.

Bank Accounts Are A Better Deal Than Cash

Nobody needs to rely solely on cash or spend lots of extra money on check cashing anymore because there are cheaper alternatives available.

It is possible for people with bad credit to open a checking account. There are many banks that do open checking accounts for people with bad credit. Most of these will require a person to have a job and sign up for direct deposit when they do. The way to find these banks is to ask around and visit a number of different banks. Some banks may even advertise the fact they will open a checking account with running a credit check.

A checking account is a better deal than cash because checks are cheaper than money orders. Most modern checking accounts also give individuals access to some sort of free online bill pay which is a lot cheaper than wiring money. Most banks provide a free debit card so you can make purchases at stores without writing a check.

A big advantage to the bank is that you don’t have to worry about your cash being lost or stolen. You also won’t attract the attention of muggers and robbers by carrying a lot of cash around or having cash in your home.

Another advantage to the bank is that you can put part of the money into a savings and earn interest on it at the bank.

Prepaid Debit Card

If you can’t find a bank in your community that won’t open an account without running a credit check look online.

There are a now of excellent online banks that will open prepaid debit accounts or checking accounts without a credit check. These will issue a debit card that you can use for everyday purposes. Some of them such as Account Now give you the option of making payments from the account via check . Instead of issuing you a checkbook these banks cut the check and mail it out to payees at your instructions.

A great advantage to these accounts is that they don’t charge overdraft fees. Instead you can only spend the amount of money that’s in your account. This can be embarrassing when the card is declined but its cheaper than overdraft fees.