Unable to conduct everyday financial transactions without a bank account or in need of flexible, shortterm credit, many low- and moderate-income (LMI) households turn to alternative financial services (AFSs). This brief summarizes research on AFS use among LMI tax filers participating in the Refund to Savings (R2S) Initiative. We make an important contribution to AFS research by distinguishing the characteristics, circumstances, and experiences of AFS users from those of nonusers. We discuss findings in relation to the importance of having emergency savings. The findings also can inform efforts to promote safe and affordable credit products.
Project: Household Financial Survey (HFS)
Despard, M. R., Perantie, D. C., Luo, L., Oliphant, J., & Grinstein-Weiss, M. (2015). Use of alternative financial services in low- and moderate-income households: Evidence from Refund to Savings (CSD Research Brief No. 15-57). St. Louis, MO: Washington University in St. Louis, Center for Social Development.