How to Live with No Bank Account

Common Money Tasks Without a Bank Account

Paying Cash
Thomas Winz/Lonely Planet Images/Getty Images

Things are generally easier with a bank account. However, you might have your reasons for living life without a bank account. It might be a temporary thing (while you clear up identity theft issues or problems you’ve had with banks in the past), or you might have simply decided to just do without banks. Either way, it’s essential to know how to function bank-free.

We’ll cover how to accomplish the most common and important tasks on your own, and we’ll start by discussing a tool that offers bank-like features: the prepaid debit card.

You don’t need to use prepaid cards, but they are a shortcut (without all of the same problems you might have with banks).

Apps and online services are another alternative, with slightly less functionality than prepaid cards. We’ll cover some of those below.

Prepaid Cards

Prepaid cards let you do a lot of the same things that you’d do with a checking account. However, you don’t need to open a fully functional bank account. Instead, you “load” funds onto your card, and spend the money that you’ve loaded. The differences between prepaid cards and bank accounts include:

  • You don’t need to start with a certain minimum balance
  • There are no credit checks
  • Chexsystems and similar items generally won’t prevent you from opening an account
  • You can avoid or minimize monthly fees
  • You can’t spend more than you have or go into debt

Prepaid cards sometimes cost money, but there are free cards out there, and if you do pay fees you might pay a lot less than you’d pay to a bank or credit union.

Now, on to some basic banking tasks and how to get them done without a traditional bank account.

Everyday Spending

For buying things like food, gas, transportation, and entertainment, cash is still often an acceptable form of payment. The main drawback is that you need to carry cash on you, which can be a safety issue – plus if you lose it there’s no way to get it back.

There’s also the issue of getting cash in the first place: you can’t exactly go to an ATM if you don’t have a bank account (we’ll cover getting cash below).

If you're going to use cash, you'll be fine in most places. But you might have a bit of trouble getting change (or with requests for exact change). To make things easier, try to get small bills, and buy passes (such as bus or subway passes) to reduce the amount of cash handling required – and the number of coins you end up with.

Prepaid debit cards can help with most of your everyday spending. There are certainly a few places that don’t accept plastic, but most merchants are happy to take payment with a prepaid card (they’ll probably never know if it’s a prepaid card or a standard bank-issued debit card). You can spend as much money as you’ve loaded, and if the card is lost or stolen you can cancel it and get a replacement. If you ever need cash, it’s easy to withdraw funds at an ATM.

Paying Bills Without a Bank Account

Unfortunately, cash is often not accepted by billers. Utility companies (gas, water, and electric), phone companies, and insurers generally want payment by check – or an ACH transfer from your bank account. There are certainly some billers that allow you to come in-person and pay with cash – and that’s always an option – but it’s a bit of a burden to make the trip every month during business hours.

If you’re planning to operate with cash only, ask your billers where you can pay in-person. Some offer local service centers, while others allow you to pay at supermarkets and convenience stores (using Western Union, for example). If you simply must mail in a payment, use a money order made payable to the biller instead of cash.

Again, prepaid cards can make things easier (and cost less). Many prepaid cards offer online bill payment: you’ll set up a payment, and your prepaid card issuer will print and mail a check to your biller (or send the funds electronically) – usually for free. If your biller accepts payments from a credit or debit card, you’re also in luck.

Cashing Checks

When you get paid with a check, you’ve got limited options without a bank account. It’s typically best to deposit checks instead of cashing them – that way you’re not walking around with a large amount of money (which can tempt you to spend the funds).

However, you’ll occasionally want to cash a check.

With no bank account available, your best option might be to take the check to the check writer’s bank. For example, if the check pays out of an account at Bank of America (see where to find this information), take it to a Bank of America branch to cash it. You might have to pay a fee if you’re not an accountholder, and the branch might refuse to cash the check.

Retailers might also be willing to cash checks for you. For example, K-Mart cashes some checks for free, and mom-and-pop stores that you shop regularly might also do the same. You’ll need to sign the check over to the retailer to get cash. Check cashing stores (often in the same location as payday loan shops) might also be an option, but they’ll probably charge more.

If you don’t need cash right away – or if you only need a small amount, a prepaid card once again can come in handy. Most prepaid cards allow you to deposit checks to your account by snapping a photo with your mobile phone. Within a few days, you can withdraw those funds at an ATM.

Storing (and Saving) Money

One thing banks do well is hold money for you. Even if your bank burns down or gets destroyed by a natural disaster, your money is often insured by the FDIC. Again, it’s risky to walk around with large amounts of cash or keep all of your money in your home – it could get stolen or burn in a fire. If you’re going to live without banks or prepaid cards, get a fireproof safe and find a good place for installation.

Prepaid cards allow you to safely store money that you’ve loaded in an “account” linked to your card. The account might or might not be FDIC insured, and you probably won’t earn interest on your savings, but it can’t “walk away by itself” or go up in smoke.

Sending and Receiving Money

If you want to pay friends and family (as opposed to businesses that send you a bill), there’s good and bad news: you’ve got several non-bank options available, but many of those services require a bank account (or at least a prepaid debit card) to operate.

Apps like PayPal, Square, and Venmo are often free for person-to-person payments, but you need a way to fund the payment. For most people, that means linking a bank account to the online service, but that’s obviously not an option if there’s no bank account to link.

In some cases, you might be able to “load” money into an account by sending a money order, and others allow you to buy cards at retailers and add funds to your account. For example, PayPal offers My Cash cards and some prepaid cards can be loaded with cash at retailers like Walmart.