Americans Increasingly Avoid Banks

Even higher-income people find attractive financial alternatives elsewhere

The Russell family of Kirkland, Wash., makes about $230,000 with Charles Russell, 43 years old, working as a systems analyst for Microsoft Corp. According to the U.S. Census Bureau, that puts them among the top 5% of American households.

But their affluence might not be apparent based on the way Mr. Russell conducts his personal finances. He has no bank account, having dumped it due to irritation over fees and overdraft penalties. Instead, for more everyday transactions he uses a debit-card offered by NetSpend Holdings Inc.

"I have no need, desire or want to go to a regular bank," says Mr. Russell, who adds that a savings feature on the card offers a competitive interest rate.