Credit and Debit Card Ratings

Debit Cards Are A Good Deal After All

A few years ago, you couldn’t use “debit card” and “good deal” in the same sentence, but now with the high rate of competition, banks are easing off a lot of their fees.  In fact, with a few smart moves, you can use a prepaid debit card without any fees at all.

“We’re seeing new entrants to the market with some pretty compelling offers,” said Greg McBride of Bankrate.com.  Even consumer advocates have started to take notice of the kinder, gentler nature of the debit card citing them as a real alternative for the more than 10 million unbanked U.S. adults.

According to a report from bank consultancy Mercator Group, gift card purchases dropped slightly from 2011-2012, but debit card purchases were up by 12%.

In the past, consumers were often forced to buy debit cards at grocery stores or other retail outlets without being able to see a full list of quirk fees which were sometimes only available online.  But newer card issuers have adopted simplified, single monthly fee structures that are winning over customers.  “We feel like these products are headed in the right direction,” said Jennifer Tescher, CEO of the Center for Financial Services Innovation.  “Debit cards are becoming a mainstream product.  I am quite excited about the possibilities.”

New prepaid cards come with some great benefits once limited to checking account users such as:

  • Free Direct Deposit
  • Monthly Fees Waived With Direct Deposit
  • Free Online Bill Pay
  • Some Offer Paper Checks
  • Get Cash Back With Purchase and Skip the ATM Fees
  • Costs are strikingly less than that of a checking account.

With all the things the debit card has going for it, there are, however, some drawbacks.  They enjoy none of the standard federal consumer protections that credit do.  There are no refunds for fraud and no dispute resolution requirements.

Thanks to their growing popularity with government agencies for disbursing funds, a growing number of middle-class consumers are using debit cards.  A report issued last year by the Aite Group says 34% of users hold college degrees, and one-third earn more than $45,000 annually.

For more information, visit:  http://redtape.nbcnews.com/_news/2013/05/15/18255097-surprise-prepaid-debit-cards-actually-a-good-deal-for-consumers?lite

Author: Tameka Riley

  • Debit Cards Are A Good Deal After All

    Debit Cards Are A Good Deal After All

    A few years ago, you couldn’t use “debit card” and “good deal” in the same sentence, but now with the high rate of competition, banks are easing off a lot of their fees.  In fact, with a few smart moves, you can use a prepaid debit card without any fees at all.

    “We’re seeing new entrants to the market with some pretty compelling offers,” said Greg McBride of Bankrate.com.  Even consumer advocates have started to take notice of the kinder, gentler nature of the debit card citing them as a real alternative for the more than 10 million unbanked U.S. adults.

    According to a report from bank consultancy Mercator Group, gift card purchases dropped slightly from 2011-2012, but debit card purchases were up by 12%.

    In the past, consumers were often forced to buy debit cards at grocery stores or other retail outlets without being able to see a full list of quirk fees which were sometimes only available online.  But newer card issuers have adopted simplified, single monthly fee structures that are winning over customers.  “We feel like these products are headed in the right direction,” said Jennifer Tescher, CEO of the Center for Financial Services Innovation.  “Debit cards are becoming a mainstream product.  I am quite excited about the possibilities.”

    New prepaid cards come with some great benefits once limited to checking account users such as:

    • Free Direct Deposit
    • Monthly Fees Waived With Direct Deposit
    • Free Online Bill Pay
    • Some Offer Paper Checks
    • Get Cash Back With Purchase and Skip the ATM Fees
    • Costs are strikingly less than that of a checking account.

    With all the things the debit card has going for it, there are, however, some drawbacks.  They enjoy none of the standard federal consumer protections that credit do.  There are no refunds for fraud and no dispute resolution requirements.

    Thanks to their growing popularity with government agencies for disbursing funds, a growing number of middle-class consumers are using debit cards.  A report issued last year by the Aite Group says 34% of users hold college degrees, and one-third earn more than $45,000 annually.

    For more information, visit:  http://redtape.nbcnews.com/_news/2013/05/15/18255097-surprise-prepaid-debit-cards-actually-a-good-deal-for-consumers?lite

  • Debit Cards, Credit Cards and Bank Accounts Could Be Required If You Want to Receive Health Coverage

    Debit Cards, Credit Cards and Bank Accounts Could Be Required If You Want to Receive Health Coverage

    According to information provided by the Federal Deposit Insurance Corporation (FDIC), more than 17 million adults in the United States are unbanked.  Additionally, 43 million are considered underbanked, still relying on payday loans check cashing services to handle regular banking needs.  This could be a huge obstacle for those shopping for health insurance under the Affordable Care Act.

    Millions of Americans are expected to be eligible for tax subsidies under the health care overhaul that they can use to purchase coverage on new marketplaces.  With few regulations about what types of payment health insurers must accept, the unbanked could run into trouble paying the monthly premiums.

    According to the Washington Post, the unbanked rate tends to be higher among minority groups.  The Department of Health and Human Services addressed this issue in a letter to health insurers on April 5, saying that insurance carriers must be “able to accept payment in ways that are non-discriminatory.”

    One possible deterrent to accepting credit cards could be the administrative fee that comes along with a credit card transaction, which could slightly increase premium costs.  “The reason this is such an issue is that insurers are increasingly saying that they will not accept debit or credit cards as an acceptable form of payment,” study author Brian Haile said.  “If insurers refuse to accept premium payments made by debit cards, you’re going to exclude many uninsured Americans.”

    For more on this story, visit: http://www.washingtonpost.com/blogs/wonkblog/wp/2013/05/22/millions-of-americans-dont-have-bank-accounts-that-could-be-a-problem-for-obamacare/

    For more from this author visit:  Tameka Riley’s Author Page

Credit and Debit Card Ratings