Ever wonder how people without bank accounts can manage their money sensibly?
Wonder no more. The so called unbanked often rely on a simple tool recommended to keep any consumer from overspending: cash.
Some 9.6 million American households, or about 25 million Americans, were unbanked in 2013, according to new data from the FDIC. And a TD Bank study found 71 percent of the unbanked use cash for daily purchases, compared with 30 percent of the overall population. That simple approach automatically limits how much a consumer can spend to what they actually have on hand.
"Some people like to manage their money with cash," said Ryan Bailey, head of retail deposit products at TD Bank. People who can get credit cards often use them because of the points they can earn, he said, but "people who feel they can't pay off their balances... self-select into that cash product."