|Photo By Alex Barth|
Even using money itself is expensive. Checking accounts often charge monthly fees unless one maintains a minimum balance or direct deposit. Without a checking account, it can costsignificant fees to cash a paycheck. Without checks, one is also often charged a fee to pay utility bills. And sometimes the money’s just not there to pay for food and for the electricity, so you put off the electricity bill, even though you know you’ll incur a late fee. And saving money for the future?Worry instead about surviving today.
So without access to banking services, many must turn to predatory payday lenders. You can borrow $300 for a $47 fee. That’s only if you pay it back within a week (806% APR). But now at least your rent is covered. Credit card interest rates also vary by income. Making standard minimum payments, it will take 13 years to pay off a $4000 credit card balance carrying the typical 11.5% APR. Bear in mind that the majority of uninsured folks carry over $2000 in medical debt alone.
I encourage you to visit this post but also to check out this educational, interactive game:
Spent - This game simulates a situation of sudden poverty (like a job loss) and challenges you to make it through the month. I found the choices presented to be about 50% similar to what may be faced by some of our refugee and poorer immigrant friends.
I also appreciated this list "Being poor is . . ."
For a more global perspective, I would point you again to Wilbur Sargunaraj's video about poverty.