A study of consumers who use check cashing stores in Virginia found that 25% of them have bank accounts or were banked in the past and currently make more than $45,000 per year.
The consumers studied by the Aite Group who had a relationship with a financial institution in the past reported working at repairing past banking problems, according to the report titled "Can Banks Win The Hearts And Wallets of Check Cashing Consumers?"
When indicating their reasons for not having a checking account, respondents cited previous credit blemishes and avoidance of fees assessed for overdrafts as well as garnishment of account funds that might result from a credit problem, the firm reported.
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The researchers found that these consumers frequently make use of mainstream financial services. "However, past credit problems have made avoidance of punitive fees a priority. They manage their money carefully and actively, and utilize alternative financial services such as cashing checks at check cashing stores and using prepaid debit cards when doing so provides them with an advantage," the report said.
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