People aren’t feeling very hopeful nowadays. Many of us have felt the sting of our adjustable rate mortgages rising sharply, or the ache of our credit card interest soaring. Our economic climate is shaky at best and it’s hard to feel optimistic when so much seems to be out of our control.
We’re all searching for ways to regain that control over our financial lives, and one way that more and more people are finding makes sense is the use of prepaid debit cards.
Prepaid debit cards are an alternative to regular credit cards. You can acquire a debit card usually without either having a bank account or any established credit. All you have to do is purchase the card and load it up with some amount of cash. Then you can use that card wherever any credit cards are accepted.
These “stored-value” cards look much like any MasterCard or Visa credit card. Plus, they have most of the same benefits that credit cards have, but without some of the drawbacks.
For instance, prepaid debit cards have a fixed spending limit (because you prepay them), so it’s very difficult to overspend. They don’t carry minimum payments so you don’t find yourself in a never ending payment cycle that goes on for years. And they don’t carry interest, so you never find yourself in a position where the bank doubles your debt virtually overnight if you’ve missed a payment.
Prepaid cards do force you to adjust your spending habits. You can no longer overextend yourself with poor planning or impulse buys. No, you have to think ahead more. But that’s really a good thing because with a little bit of planning and saving, you can make purchases that actually cost you less in the long-run. For instance, by simply removing the “interest component” from your purchases, you lower the cost. That means you’ll have more money for things later on.
Prepaid debit card usage is on the rise. As people have become more familiar with what these products offer, they’ve been embracing them more and more. I have one and I’ve been using it all the time. In fact, I’ll bet that I’ve only used a true credit card two or three times in the last 6 months.
In today’s world most of us need to exert more, not less control over our finances. Perhaps it’s a lesson we lost over the last several years but it’s a lesson we can’t afford to ignore right now. So take a closer look at prepaid debit cards and see if they can help you manage your finances better. I think you’ll find it’s a positive step in a positive direction.
There are a couple misconceptions about how you load a prepaid debit card. So let’s shoot them right down shall we?
Misconception #1 – You can only reload prepaid debit cards with cash.
This was true back in the day when prepaid debit cards were just learning how to walk but times have changed. You see the whole idea behind a prepaid debit card was for you to load it up with your cash so you could use the plastic online, over the phone, or at your corner dry cleaner. The entire prepaid industry was built to serve the unbanked community.
But now prepaid card companies are reaching out to people who are underbanked or who even have normal relationships with their banks. These customers have regular jobs and are paid through normal channels and so the card companies have been wooing them into loading up their reloadable cards via direct deposits – either from their payroll checks or from their bank accounts themselves. In fact, companies will suspend any loading fees when you sign up for direct deposit; in other words, the load is free. Some prepaid companies have even offered bonuses for direct deposits. So if you go the prepaid card direct deposit route, you’ll never have to show cash to a cashier again.
Misconception #2 – Loading cash onto your debit card is inconvenient.
I have to admit that this one is partially true, but only for those people who could use direct deposit but don’t. For the rest of the prepaid debit customers out there cash is a mainstay of their lives. They often work in jobs where they receive straight cash for their labor and they’re used to having it in their pockets and pocket books.
When you’re always carrying around cash it’s pretty convenient to load up your debit Visa or prepaid MasterCard right at the store. Many retailers even have the machinery to “swipe load” your card at the register. You just walk up to the cashier with your cash and your card, tell him or her how much you want to load, they swipe your card through a card reader, and voila, you’re card is reloaded.
When you load up your prepaid cash card in this way, there are no more steps to take – like having to phone the company to finalize your load or use their website. It’s as easy as buying a pack of gum.
Prepaid debit cards are convenient folks. And they’ll save you money in the long-run over their credit card cousins. Just take a closer look.
Prepaid debit cards are making a dent in the check cashing business. For years check cashing shops have served that part of the financial market that did not have conventional bank accounts. Pay checks, government checks and personal checks are all cashed for a fee that can range from 1.5% to 10% of the face value of the check. Typically people paid these rates simply because there are no conventional banks located in their community.
Enter the prepaid debit card. Both Mastercard and Visa have prepaid debit programs that have significant advantages over the traditional check cashing shop. Probably the biggest advantage is not having to carry around cash. If you have just cashed your weekly or bi-weekly paycheck, what do you do with the cash? Carry it on you? Hide it someplace at home?
With the prepaid debit card, your deposit is recorded and the card is the only thing you need to make purchases at a store, online, or get cash out of an ATM. Funding your card can be done by direct deposit or by reloading the card at one of thousands of stores that provide the service. There is no need to carry around more cash than you need. Because the debit card is using your own money and is not a credit card, there typically is no credit check and most persons are approved online immediately. Because there is no credit check there is no inquiry recorded on your credit report.
While carrying a debit card is safer than carrying cash, there is a downside when it comes to liability. Unlike a credit card which limits your liability for fraudulent use or broken or undelivered merchandise to $50, the debit card has stricter requirements. The card user must report the loss of his card or suspicion that the card has been compromised within 2 days of the event to limit his liability to $50. If the loss is reported after 2 days the liability jumps to $500. If the loss is not reported for 60 days, then there is no protection and your account could be wiped out. The big difference here is if you are disputing a fraudulent credit card charge, you are not out of money. If you report a fraudulent use of your debit card, the bank could take 10 days to investigate meaning you are out that unauthorized use for over a week.
So how do these cards make money for the issuers? If you are thinking about using a debit card, make sure you carefully read the terms and conditions and fee schedule. There are many programs available on the internet and they all have different fee schedules and features. Look for a card that does not charge you to reload if you use direct deposit. Look for a card that will allow you to see your balance online or via telephone without a charge. If you shop carefully, you will definitely save money compared to the check cashing shops.
Great advances have been made over the past several years in the availability of options for people wishing to send money around the world. Whether it’s a family member traveling abroad or a migrant worker sending money to family and friends at home, many of us have the need to send money to faraway places at some point in our lives. For years, there were rather limited options for sending money. Individuals could send money the old fashioned way-sending cash or a personal check by mail. Individuals could also use local banks in attempts to wire funds directly. Finally, independent money transfer services could be used.
Each of the above methods worked for transferring funds, but each had a downside as well. Either the money took too long to reach the recipient, the fees associated with the transfer were excessive, or there were security issues that could cause the money to be lost. One of the benefits of technology has been the advances made in making transfers faster, safer, and more affordable. One method of sending money that encompasses all three of these important characteristics is transferring money through a prepaid debit card.
Faster Money Transfers
A prepaid debit card enables money to be transferred almost immediately, taking the funds directly from a credit or debit card. An individual seeking to send money simply needs to establish a relationship with a site offering this service. Currently, a US resident needs to have a valid Social Security number and a Visa, Mastercard, or valid checking account in the United States. A debit card is sent via Fed Ex to the recipient of the funds, who will then receive the PIN number from the person sending the money. This card can be used again and again for money transfers over a long period of time. This will make money available for the recipient much faster than some of the more traditional methods.
Safer Money Transfers
Each prepaid debit card is sent without a PIN number, ensuring that if the card is lost or stolen, funds cannot be accessed and end up in the wrong hands. Great strides have been made in the security of prepaid debit cards. In most cases, a PIN number is assigned by the person sending the funds, who has the responsibility of contacting the recipient of the funds to disclose the PIN. This method reduces the risk of loss for the sender and the recipient.
More Affordable Money Transfers
The money transfer business is becoming more competitive all the time. This great new for consumers sending money. Using a prepaid debit card, money can be sent for as little as $5, just a fraction of the cost associated with wiring funds internationally or purchasing money orders.
In a fast paced world, technological advances are making it possible to send money more easily and affordably than ever before. It will be fascinating to see what the future holds in this increasingly competitive business.
The Green Dot Visa & MasterCard are prepaid debit cards. You may be unfamiliar with debit cards so let me explain the basics.
Unlike with an unsecured card where the company issues it and attaches a limit on which they then charge interest as it is used. With this you must load or deposit money and that amount then becomes your limit.
Instead of making purchases and paying for them later, along with the interest rate and associated fees, you pay for your purchases beforehand by loading cash amounts. The issuer is Columbus Bank and Trust Company.
You will, at times, need to load and reload value onto the card. The minimum amount of the initial load is $20 and the maximum amount of the initial load is $2,500.
You may never have more than $2,500 loaded onto the card at any given time. To load or reload your Green Dot card, you may have a portion of your paycheck directly deposited to your card or you may purchase a Green Dot MoneyPak universal reload from locations such as Rite Aid, CVS, Eckerd, Radio Shack, The Pantry and other participating merchants. The MoneyPak costs $4.95.
The card charges a $4.95 per month maintenance fee, $2.50 for each ATM transaction ($3.00 per international ATM transaction, $4.00 per cash advance from a teller or non-ATM transaction), up to $1.00 per call to obtain your balance using the interactive voice response system or a live operator, and $10 fee to replace a lost or stolen card. Always be sure to read the Terms and Conditions before applying.
Columbus Bank and Trust Company also offers a Premier version of this card. Be sure to research the Premier card fees before moving forward.
Fees include, but are not limited to, a one-time $19.95 membership enrollment fee and a $5.00 fee per month if you do not load $750 per month to the card. Additional charges may accrue if you use an ATM.
Likewise, if you purchase one of these cards at a store, the retailer will charge an initial activation fee and a reload fee. Be sure to check with the retailer for the costs involved with purchasing one of these cards.
Personally, I would not apply for one of these cards, though I guess it would depend on your situation and why you need the card. Again, personally, I don’t really feel that I want to pay to call someone’s answering machine.
I also don’t want to pay $5 per month merely because I don’t reload $750 per month. I believe I should be the one to decide how much a balance I want to maintain.
Additionally, there are other cards which allow more flexibility as to reload options.
Prepaid debit cards, on the other hand, offer employers the ability to immediately transfer funds to employees anywhere in the world, and allow employees to quickly and easily access money in their home currencies, without the necessity of opening a foreign bank account. They are powered by your own money, so the amount you have on the card is the amount available to spend. But not limited to prepaid phone cards, and more particularly, to a package assembly and methodology for permitting activation the card at a point of sale from a remote location. Issuers point out that they can create conveniences for employers and employees beyond monthly payroll. Since this will be disbursed to workers at the place of employment, to business owners at the tax offices, and to the unemployed and dependent at the social assistance agencies, the reference income could be readily determined.
Direct deposit and prepaid debit cards, however, may be less than 50 cents per transaction. You have the freedom to make purchases anywhere at any time without carrying around too much cash. And are accepted at locations and shopping outlets. Since it carry a Visa insignia on them, people can use them any place that accepts Visa or Master Card. As with any card, they carry some limitations on usage. They are providing the cardholders with some of the best financial services. Some are offered by smaller banks to build up their deposit assets I suggest that you begin your search at a website that offers this kind of selection. In this way, the retail merchant need only pay the costs associated with the prior to the actual sale.
Prepaid debit cards work well with programs that allow an employee or benefits recipient to choose between direct deposit or check disbursement. Meta Bank specializes in prepaid debit cards for those with poor credit. They are sold by participating retail locations, banks and card companies, and are typically available without a credit check or prior bank account. Most consumer credit comes from banks, savings and loan institutions, credit unions, finance companies, and credit card companies check cashing payday loans money transfers bill payments money orders and many other services are offered by these financial. International It can be issued to just about anyone in the world without requiring credit, banking and employment history. Experts are predicting more growth, linked to flexible spending accounts, health savings accounts and health reimbursement arrangements. Debit News, the named defendants in the case have sold millions.
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