Banking institutions are crucial to our everyday lives. During the pandemic, cash transactions aren’t the most dominant option when paying for bills. Instead, most people opt to use credit cards or bank transfers to do the job. This is a problem that most unbanked Americans are facing. But they do have their own reasons for being unbanked. Some of these reasons aren’t necessarily their fault.

About seven million Americans don’t have a bank account. These Americans primarily rely on their management skills to handle their funds. But studies have shown that some of them don’t have a natural choice in the matter. Here are some reasons why people are unbanked:

Past Financial Mistakes

For unbanked people, they’ve likely made some financial mistakes in the past that have led them to be unbanked. This choice can come from multiple bounced checks to overflowing credit cards. All these are viable reasons why people are unbanked.

But unfortunately, their credit score might also be so low that they are on the blacklist of many banking institutions. Sadly, even if they want to get banked, they can’t-unless they go through multiple processes.

Not Trusting Financial Institutions

Aside from the reason above, another primary reason why people choose to be unbanked is that they don’t trust banks. This mindset can also come from a previous experience, such as selling unwanted services or fraudulent scams from ghost banks worldwide. These experiences can undoubtedly lead to a significant distrust in financial institutions. However, it’s essential to know that many laws and regulations keep banks from fraudulent activities.

Advantages of Being Unbanked

Regardless of whatever reasons unbanked people have, there are some advantages to being unbanked-at least, for a while. One of them is for you to get a new chance at being banked again.

Getting a New Chance

For people who have a poor history with financial management, the best course of action is not to get banked for a couple of years. Credit scores and past financial histories are much like broken bones: they get better in time. So if you want to get banked again with at least a nominal credit score, then it can be an advantage for you to avoid banks for a while.

Freedom from Fees

If you don’t like bank fees and enjoy your financial freedom, this should be one of the reasons you should be unbanked. If you’re pretty good with money management and enjoy $100 bills in your home, locked behind a safe, then go for it.

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Disadvantages of Being Unbanked

However many you think the advantages of being unbanked are, like anything else, there’s a caveat to being unbanked. Here’s what you need to know about the disadvantages of being unbanked:

Lack of Protection

Storing all your money in a safe inside your home doesn’t mean it’s safe. People can break into your home and crack that code. A fire might happen and damage any bills you might have with you. Sure, banks are liable to replace it, but that’s only when the bills aren’t entirely charred. There are many more reasons why you need banking protection, aside from accidents or acts of God.

Limited Access to Loans

At some point in your life, you’re going to need loans, and you can’t have access to these loans if you don’t have a bank account. This means that you might not be able to purchase a home or even start a business without substantial savings. So you’re going to need loans, whether you like it or not, and you need to have a bank account for that.

No International Presence

The main benefits of being banked are related to international presence. Let’s say you want to send some financial help to friends or family in the Philippines. You won’t be able to transfer money to Philippines bank account if you don’t have a bank to help you out. If this is the case, you’ll need help from a different financial institution with some international presence. They can help you transfer money worldwide. This is a viable option if you choose to be unbanked.

Few Investment Options

If you want to grow your money, you’re going to need to invest. But you won’t have access to almost all investment options without a bank account. Therefore, you lack access to the most efficient ways you can grow your money without being banked.

No Safety from the Pandemic

Lastly, if you want to stay safe from the pandemic, you’re going to have to lessen your cash transactions and do more digital bank transfers. Sadly, you can’t do that without being banked. So you’re putting yourself at risk by not having a bank account.

There are so many more reasons why you should have a bank account. Sure, there might be some advantages to being unbanked, but it will never surpass the security and the financial options you can get from banks. By the end of the day, you should consider depositing at least some of your money and open a bank account.