Want to Manage Your Money Without a Bank? Try Walmart

What's Hot

2 Types of Black Marks Might Vanish From Your Credit File SoonBorrow

5 Surprising Benefits of Exercising Outdoors in WinterFamily

6 Ways the Obamacare Overhaul Might Impact Your WalletInsurance

7 Dumb and Costly Moves Homebuyers MakeBorrow

Obamacare Replacement Plan Gets ‘F’ Rating from Consumer ReportsFamily

Beware These 12 Common Money MistakesCredit & Debt

17 Ways to Have More Fun for Less MoneySave

This Free Software Brings Old Laptops Back to LifeMore

30 Household Uses for Baby OilSave

Nearly Half of Heart-Related Deaths Linked to These 10 Foods and IngredientsFamily

10 Ways to Save When You’re Making Minimum WageSave

Boost Your Credit Score Fast With These 7 MovesCredit & Debt

7 Painless Ways to Pay Off Your Mortgage Years EarlierBorrow

Considering a Fixer-Upper? 15 Ways to Avoid a Money PitGrow

This Scam Now Tops ID Theft as the No. 2 Consumer ComplaintFamily

6 Stores With Awesome Reward ProgramsFamily

6 Healthful Treats for Your DogFamily

6 Ways to Save More at Lowe’s and The Home DepotSave

20 Tips for Buying a Home in the Best Location, Location, LocationGrow

30 Awesome Things to Do in RetirementCollege

New Study Ranks the Best States in the U.S.Family

6 Overlooked Ways to Save at Chick-fil-AFamily

The Most Sinful City in the U.S. Is … (Hint: It’s Not Vegas)Family

House Hunters: Beware of These 6 Mortgage MistakesBorrow

Ask Stacy: How Do I Start Over?Credit & Debt

Secret Cell Plans: Savings Verizon, AT&T, T-Mobile and Sprint Don’t Want You to Know AboutFamily

10 Ways to Save When Your Teen Starts DrivingFamily

The True Cost of Bad CreditCredit & Debt

You’ll Soon Pay More to Shop at CostcoSave

Marijuana Stocks Flaming Out Under TrumpFamily

21 Restaurants Offering Free Food Right NowSaving Money

People who either don't trust or can't afford to rely on a bank have traditionally used pay-day lenders and check-cashing stores instead. Now some of them are using one of few companies with revenues that surpass even Bank of America: Walmart.

We’ve heard a lot about people angry at the steep new fees that big banks are charging, and how they’re closing their accounts in droves. And the fees the unbanked pay to services like pay-day lenders and check-cashing services have always been a horror show. But who knew some of these customers would find relief with another corporate giant – Walmart.

According to The New York Times, instead of opening an account at a community bank or credit union, some folks are ditching banking altogether in favor of Walmart’s stand-alone financial services, which the company began offering in 2003. These include check cashing, bill pay, wire transfers, and even prepaid debit cards.

According to The New York Times, Walmart has no plans right now to accept deposits or make loans – although there’s a Walmart credit card with an APR of nearly 23 percent.

Looking at the prices for Walmart’s various services, I can see the appeal to consumers who might have kept low bank balances or run afoul of big overdraft fees, as well as those turned off by check-cashing fees or the possibility of debit card fees. Here’s what Walmart offers…

  • Check cashing: 1 percent capped at $3 for checks up to $1,000; flat fee of $6 for amounts up to $5,000
  • Bill pay: 88 cents to $4, depending on payment speed
  • Money transfer: $4.75 and up for transfers under $50 in store, $11 and up for transfers online (For some reason, the fees to international destinations are lower, starting at $3 online.)
  • Prepaid debit cards: $3 to acquire, or issued free online; $3 “reload” fee, waived if you’ve already paid the check-cashing fee to add funds or if you transfer money from a bank account or direct deposit; $3 monthly “maintenance” fee
  • Credit cards: No annual fee, 22.9 percent APR

How do these rates stack up? Well, a 2009 analysis of “alternative financial services” – non-banks – released by the FDIC found the average check cashing fee to be above 3 percent. A clear win for Walmart.

As for money transfers, the retail giant seems to have Western Union beat too: The latter wants at least $5 for a three-day transfer of $50 within the United States, while Walmart will do it in four hours for less. But transfers through PayPal cost 2.9 percent, which beats Walmart, at least on the low end.

Yet many smaller banks and credit unions offer all these services for an even better price: free. So why don’t these people use them? As the trade group Financial Service Centers of America puts it…

“Many low-and-moderate-income individuals and families live paycheck to paycheck and do not have the means to leave their hard-earned money in a bank account.  Financial service centers allow customers to access 100 percent of presented funds instantly, without having to wait for the funds to clear, thereby bringing them immediate liquidity.”

In short, people with very little money need to keep it all in hand. And at least these fees are visible and static, whereas having a bank account seems to require constant vigilance for unexpected new fees.

Still, for responsible consumers who can meet the minimum deposit requirements, a community bank or credit union seems the cheapest way to go in the longbrun. You can learn to shop for a good one in 7 Steps to Switch to a Better Bank. And if you want another alternative to “alternative financial services,” check out 5 Reasons to Move to a Web-Only Bank. And to find the best rates on savings, be sure to check out our rates page.

Need to sound off about bank fees, or anything else? Let it all hang out on our Facebook page.

Stacy Johnson

It's not the usual blah, blah, blah

I know... every site you visit wants you to subscribe to their newsletter. But our news and advice is actually worth reading! For 25 years, I've been making people richer without making their eyes glaze over. You'll be glad you did. I guarantee it!


Read Next: 7 Things Worth Paying More For

Check Out Our Hottest Deals!

We're always adding new deals and coupons that'll save you big bucks. See the deals to the right and hundreds more in our Deals section.

Click here to explore 2,007 more deals!