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Comment by jljljl | Hacker News Reader

For people without stable incomes or a large starting balance to serve as a buffer, bank accounts can be incredibly expensive, and confusing.

If you can easily maintain a few thousand dollars in positive balance, the weird rules around NSF and overdraft fees never really impact you. If you are living paycheck to paycheck, however, a single overdraft can wipe you out.

Here's a few articles that look at why low income individuals may choose to avoid banks:

http://www.newyorker.com/online/blogs/currency/2013/10/the-h...

http://www.publicbooks.org/nonfiction/ritecheck-12

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He probably has plenty of unpaid fines from the police too, as every homeless person is typically hounded with loitering and other petty fines that a collection agency would grab from his account.

I find the whole 'overdraft' issue from US banks puzzling.

Brazilian banks usually have an overdraft limit. That is subject to interest, based on the time the account was negative. Some banks even give you a few days to sort it out before charging interest. Once the limit is exceeded, all operations are simply denied, be that from a ATM, a debit card, automatic bill payments, etc.

Yes, the interest rates are ridiculous, but they only matter if you spend a month or more with a negative balance.

Now, bounced checks are another story and are much more similar to how US overdraft works. Which is why checks are very rarely seen nowadays.

It's not the first time I stumble upon a mention of a high barrier to entry into becoming a bank customer for poor people.

In Africa, technology seems to be solving this problem with mobile money, see e.g. very successful M-Pesa[1].

Perhaps this is a solution the American poor could benefit from, too.

[1] http://en.wikipedia.org/wiki/M-Pesa

Nonsense, he can get a prepaid card that comes with a bank account with no fees, and even a full fledged account - many banks (Capital One and Fifth Third for sure) offer accounts with no overdraft and no monthly fees.

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