Are checking accounts a dated concept? Alternatives to consider

Many people believe they must have a traditional checking account for basic financial needs like paying bills, cashing checks and keeping finances balanced. The truth is there are alternatives to traditional checking accounts that can work just as well.

"Some 60 million Americans don't have access to checking accounts or credit cards. They may be too young, or may have a poor credit rating, or can't afford the high fees. This creates problems. How do you cash your paycheck? How would you pay your landlord? How do you buy things online?" says Patrice Peyret, CEO and co-founder of Plastyc, a money management company.

If you don't qualify for a traditional checking account at your local bank, it's time to consider the alternatives. Using cash is an easy way to spend only what you have and never go in debt, but it's not very practical for paying bills. Check cashing locations can charge a hefty fee and money order costs can add up quickly if you need them to pay monthly bills.

Recent regulatory changes have caused some banks to raise fees for standard checking accounts, and some have completely eliminated any offer of "free checking" in order to keep profits up. This has many people who do qualify for traditional checking looking for an alternative also, not just those who cannot get approval.

One option that is quickly growing in popularity is using online accounts that come with reloadable Visa prepaid cards. What is a reloadable prepaid card? This option works much like a traditional checking or savings account because the user deposits money and then can use the card to make purchases. One of the major benefits of a prepaid card is that you'll never go into debt because you can only spend the money that has been put on the card. This can help those with money-management issues stay on budget.

Some prepaid cards do not accept direct deposits of salaries or government benefits like a checking account would. If you like the idea of a prepaid card, but still need access to the services of a traditional checking account, some programs offer an easy solution. The UPside prepaid Visa card offers the benefits of a credit card and checking account. Each pre-loadable card comes with a checking account number as well as a credit card number to use. Need to send a paper check? Pay your rent or other bills when you visit their website. Simply enter in the bill you'd like paid along with the name and address of the recipient. A paper check will be mailed directly to that address on the date you select.

UPside is a convenient, affordable alternative to traditional checking accounts. Use your cell phone to manage your account, make transactions and load money. Need cash fast? Each card comes with a PIN number that can be used to get cash at ATM machines.

For those who can't get a traditional checking account, or others who are tired of high fees and limitations, a prepaid alternative might be a good fit. To see what's right for you, visit an online fee calculator to compare fees between traditional checking accounts and prepaid card options.