You may be a black American who does not bank, having been turned down for a checking account when you tried to get one. Or you may have a checking account but have had problems getting loans.
You may not be aware of the existence of black-owned banks. Here, you will learn about the unbanked and underbanked, benefits of banking, and black-owned banks such as the one owned by Kevin Cohee.
Unbanked and Underbanked
Unbanked individuals may not use banks; instead, living their lives by using a combination of cash, reloadable prepaid cards, and money orders for purchases. They may pay a fee to use check-cashing services to cash their paychecks. And when strapped for cash, they may turn to high interest-bearing loan advances from payday lenders who may make loans without hassle.
The unbanked may have limited income or trouble with identity verification, creditworthiness, account fees, or minimum balance requirements. They may also prefer to keep their transactions from being traced back. On the other hand, underbanked individuals may live by using checking accounts, check cards, and savings accounts but shy away from other financial services.
You may not be aware of the advantages of using bank services. The money you place in your checking and savings accounts is safe since the funds are insured. With a checking account, you may write checks, set up automatic ACH payments and direct deposits, use check cards for purchases, and get cash from an ATM or at a point-of-sale transaction.
You may set up a savings account to withdraw an amount from your checking account to create automatic savings. You may use a savings account to cover overdrafts, save for a future purchase, a vacation, or fund emergencies or unanticipated expenses. You may also earn interest.
Additionally, providing you with access to loans is a vital bank function. A loan may finance a house, car, or business. You may use a credit card to finance everyday purchases and build credit.
Black-owned banks cater to their communities and build relationships. They may provide financial literacy to increase knowledge and understanding of financial services and increase utilization. These banks may provide opportunities for those with no banking history or poor credit to open accounts and build or rebuild credit. They may give home, car, and business loans to low-income individuals. And they may provide banking services to those who have experienced banking discrimination. Black-owned banks help address inequities in banking and borrowing faced by black Americans.