Cash Is Disappearing, Stranding the Unbanked in Crisis

An assuring legend is printed on U.S. bills: “This note is legal tender for all debts, public and private.” I have always been glad to know that Uncle Sam is there for me; got my back, so to speak.

But for 14.1 million American adults, that statement is a lie because bills are being pushed aside by bank cards, credit cards, and online payment systems like PayPal. The stranded are the unbanked, the unplasticized.

The unbanked aren’t axiomatically the homeless, the undocumented immigrants, or those who have fallen through the cracks. They are also people with jobs who pay their taxes, and many of whom live exemplary lives but don’t have bank accounts.

That may be because they don’t trust banks or — and this is a big factor for the working poor who are unbanked — they feel having a bank account is too expensive. They have been charged disproportionate fees for bouncing a check, for late payments, or for any of the other creative ways banks go after fees to enhance their earnings, like the high ones for using an ATM.

However, if you choose to keep your money under the mattress or in the breadbox, you elect to be the financial equivalent of undocumented. Essentially, you are immobilized.

All this came to mind while I was checking in online for a recent United Airlines flight. I learned that I would need to save a form of payment for boxed meals and snacks before I boarded because I wouldn’t be able to use credit cards while in flight. United maintains, “We are working to make your trip more enjoyable while maintaining a safer and more touchless travel experience.” In the time of COVID-19, that’s fine with me. But the corollary is they don’t take cash — no credit card, no snack.

Most airport eateries are going to ordering by computer — again, no credit card, no food. I went to one of those wired restaurants at Newark Liberty International and wondered about the unbanked: How would they feed a child if they didn’t know cash wasn’t accepted?

For the unbanked, travel is nearly impossible. First, you would have to go to the airport and buy your ticket with cash. But would they take it? Airline offices are no longer scattered about, and most travel agencies are now virtual. To get to and from the airport, you may have to take an expensive taxi — if one can be found, as you won’t be riding with Uber or Lyft.

Want to stay in a hotel when you arrive at your destination? You won’t have a reservation because you can’t make one without a credit card. Then you must beg the hotel to let you stay.

Once in San Francisco, I had to pay cash for a hotel room because I had lost my wallet. They gave me a room (I was in their guest file because I had stayed there on a previous trip); took a cash deposit for the room, which my office had sent through Western Union; and instructed me not to charge any items to it, not a drink, a meal, or a phone call.

Welcome to the world of plastic, as in credit-card dependency. Who would have thought that your freedom was linked to a small, plastic card?

The road from being unbanked to being banked is littered with obstacles and it takes years to build credit for, say, a new car or a mortgage. The person who has no bank account has no credit history — and that means has little official existence.

There are hidden costs for being unbanked. Your paycheck will have to be cashed somewhere and check-cashing services, like payday lenders, charge fees that can be as high as 3 percent of the check. Also, the unbanked are victimized by dubious operators, performing illegal banking services and other crookery.

The burden of being unbanked is limitless.