I have two rental homes and a friend has 23. We’ve both noticed that renters no longer have bank accounts. They either pay cash or they get money orders.
They don’t have the $5,000 or so to leave in checking accounts so they can have them for “free.” For both of my rentals I had to adjust the pay date to when they got their paychecks. These people are literally living paycheck to paycheck.
Do they have credit cards? I don’t know. But my guess is yes. I wouldn’t be surprised if their credit is maxed-out too.
Incidentally, my friend, who has been in the game longer, says this cash-only trend is relatively recent in just the last several years. I’d guess that it coincides closely to when Obama took power.
Another possibility that comes to mind is that people have had checking accounts in the past, and got into overdraft trouble. Once that happens, if they aren’t able to pay off the hefty fines - some banks charge $8 a day if an account is overdrawn - then they go into a chex system - which prohibits them from opening a checking account at another bank. This might be one reason your renters pay cash or with a money order.
Thanks for the info, very interesting.
One thing I do is read the federal flow of funds account report every quarter. It shows the raw numbers of where the money is in this country. Before Obama it showed people saving again; they had $7,000 or so in savings and $2,500 in checking (bill money). Now, people have no savings and fewer checking accounts. I guess ya gotta have a job to need a checking account.