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Over 25 million American households are unbanked

According to the FDIC over 25 million American households are unbanked or under banked. They do not have accounts at banks and other mainstream financial institution.

Most Americans with bank accounts who live check to check are finding that over half of their paychecks are going to the bank for overdraft fees. These fees are ranging from $20 to $30 per overdraft transaction.

This is big business for banks and they take the opportunity to make money on overdraft fees especially if they consumer has direct deposit. I remember I had a problem with Bank of America with my account. I asked them not to authorize any bankcard transactions if I don't have the money in the account. I notice that my account was over drawn. So I called to see what happend. They told me the charge came from Orkin Pest Control and it caused the over draft. I told her well I didn't have the money in my account and I called to make sure this does not happend. The banker told me they have no control of what charges are authorized or declined and they will not refund me the overdraft fee.

This is one of the reasons why so many Americans are unbanked. They feel that they save more money by cashing it at a check cashing store than give the bank over half of their check due to poor account management.

The lack of financial education is the root of Americans being unbanked. FDIC has a money smart Internet program that educates consumers in financial management. You can log on to www.fdic.gov/consumers/community to start your financial education.

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