Prepaid Debit Card Reviews, Complaints, Etc

Tag: Debit card

  • Google Launches Prepaid Card

    Google Launches Prepaid Card

    Google Inc. decided that the run-up to the holiday shopping season was the right time to announce its entrance into the prepaid debit card industry. On November 20 the search engine company declared – via blog post, of course, and with typical irreverence – the availability of its Google Wallet Card.

    “Your roommate finally paid you back for dinner through Google Wallet, and you want to use that money right away to pay for groceries this week. Now, you can use the new Google Wallet Card to spend the money instantly, either by purchasing in stores or by withdrawing cash at ATMs,” reads the blog. As the company’s announcement indicates, the new prepaid debit card offering from Google is both similar and somewhat different from other cards already on the market, which are now available from financial heavyweights like American Express and Chase as well as groups like the Occupy Wall Street Movement.

    Like so many other prepaid debit cards, the Google Wallet Card allows users to make purchases anywhere MasterCard is accepted. In addition, the card also makes it possible for cardholders to withdraw cash from ATMs. But there are also significant differences with the Google Wallet Card. As its name indicates, the Google prepaid debit card is linked to Google Wallet accounts. Google Wallet is a smartphone app linked to a consumer’s credit card or bank account that allows users to pay for items using their phone (if a retailer accepts Google Wallet, that is).

    The new Google Wallet Card, which is available for use only in the U.S., can be loaded with money either from a Google Wallet account or from bank and credit card accounts. There are other differences that make the Google prepaid debit card stand out. Importantly, there is a notable lack of fees. Google does not charge anything to people for obtaining the card initially nor does it levy fees annually or monthly. The Google card also provides instant notifications delivered straight to a cardholder’s phone whenever a purchase is made.

    Perhaps more controversially, information about purchases made using the Google Wallet Card will be tracked. According to an article in Reuters, the company will collect information on goods purchased with the card, the amount paid and the name and address of the seller. That information will then be included in profiles Google creates for advertisers interested in better targeting their pitches.

  • The Debate Over Green Dot

    The Debate Over Green Dot




    Analysts disagree about how much longtime prepaid debit card supplier Green Dot should worry about new competitors

    By Shane Tripcony

    Recently, (Green Dot Corporation- click for our review of their prepaid card) has been a source of debate and disagreement. A longtime issuer of prepaid debit cards, Monrovia, California-based Green Dot, is an established player in the industry, selling Visa and MasterCard branded prepaid cards both online and at tens of thousands of retail locations. In its most recent quarterly earnings report this past July, Green Dot not only declared that both its net income and revenue were 4 percent higher than the year before, but it also raised its full-year guidance.

    Not everyone is as rosy about Green Dot’s position in the prepaid industry. In mid-October, the company’s stock price took a tumble after Janney Capital Markets’ analyst, Thomas McCrohan, issued a client note (http://www.businessweek.com/ap/2013-10-16/analyst-cuts-green-dot-to-sell-on-competition) downgrading his rating of Green Dot from “Neutral” to “Sell.” McCrohan’s dimmed view on Green Dot’s fortunes were due to what he saw as stiffening competition from big financial players like American Express. In particular, McCrohan cited the low (or non-existent) reload fees available with cards such as AmEx’s Serve and newly introduced cards from retailers like Walgreen’s.




    In McCrohan’s analysis, Green Dot’s Wal-Mart MoneyCard, which has a $3 reload fee, doesn’t stack up well. “Paying a fee to reload cash onto a card is an irritant to most consumers, and retailers are beginning to turn to zero-fee reloads as a tool to drive foot traffic,” McCrohan wrote in his note to clients.

    McCrohan’s comments about Green Dot came during a stretch in which the company’s shares slid to three months’ low. Not everyone seems to share McCrohan’s dour view on Green Dot. On October 29, Piper Jaffray analyst, Michael Grondahl, (http://www.businessweek.com/ap/2013-10-29/green-dot-climbs-as-analyst-raises-rating)elevated his rating of the company from “Neutral” to “Overweight.” Grondahl said that the impact of increased competition on Green Dot’s business health was being overstated. He also noted that Wal-Mart is not pressuring the company to reduce fees on its card and is instead offering a larger selection of Green Dot cards.

    McCrohan, Grondahl and other observers of the quickly expanding prepaid industry will be able to quibble all the more soon. On October 31, Green Dot is set to (http://ir.greendot.com/phoenix.zhtml?c=235286&p=irol-newsArticle&ID=1865243&highlight=”) announce its third quarter financial results.

  • How To Keep Holiday Spending Joyful

    How To Keep Holiday Spending Joyful

    Prepaid debit cards can help you stick to your budget.

    by Shane Tripcony

    It seems to happen earlier and earlier each year. Even before the little ones don their witch and ghost outfits to go out trolling for candy on Halloween night – let alone before anyone has planned out their Thanksgiving Day feast – many stores around the country already are decorated with evergreen wreathes and plastic Santas.

    To be sure, this makes absolute sense for retailers, many of whom rely on the holiday shopping season to account for as much as 50 percent of their annual revenue. In other words, it’s just good business to try and stretch the duration of the holiday shopping season as long as possible, even if it does occasionally also stretch credulity.

    But what might be good for storeowners is not necessarily in the best interest of all of us shoppers. Which is why so many personal finance pros urge us to make a detailed holiday shopping budget and stick to it. The first part is easy. Indeed, according to a recent survey by Capital One Bank, fully three-quarters of all Americans say they are likely to come up with some sort of holiday spending budget this year. But the same study also hints at the reality of what usually happens: Almost half of those who say they’ll budget for the new sweaters and Xbox games they plan to buy aren’t confident that they’ll actually stick to their best-laid plans.

    But it is possible to be both generous for the holidays while simultaneously ensuring that you don’t wake up with a financial hangover in the New Year. Step one is to do exactly what personal finance experts have been urging holiday season after holiday season and actually make a budget. Only you can determine what makes sense given your current financial situation and expenses. The consulting firm Accenture pegs the amount U.S. consumers are likely to spend this year on gifts at $646, an increase from $582 last year.

    Whatever you decide that number should be, step two is to take that amount and load it onto a low-fee prepaid debit card. Doing so – and being disciplined about using only that one card for your shopping and not adding more money to it once it is depleted – will ensure that you stick to your budget, even when your holiday spirit is threatening to overwhelm your best financial interests. Why not just use a gift card? That could make sense if you decide that you want to do all of your shopping at just one store. The beauty of dedicating a prepaid debit card to all of your holiday shopping is that it gives you the flexibility to make purchases wherever Visa and MasterCard are accepted, which is basically everywhere.

    Just as we here at BestPrepaidDebitCards.com urge you to select cards with low fees for day-to-day use, the same imperative applies for holiday cards. You still want to select a card – like Serve from American Express or Chase Liquid – that doesn’t hit you with many fees. There’s no need to be a Scrooge this holiday season. Just get a little budgeting help with a prepaid debit card to ensure the good cheer lasts into 2014.

  • Walgreen’s Launches A Prepaid Card

    Walgreen’s Launches A Prepaid Card

    The drugstore chain puts a prepaid debit card at the center of its financial services options

    by Shane Tripcony

    Walgreen’s is already the place millions of Americans head to in order to pick up everything from deodorant to Halloween candy to prescription drugs. Now the nationwide drugstore chain is adding financial services, including a prepaid debit card, to its already lengthy menu of offerings.

    On October 7, 2013 the Illinois-based retail giant announced that its new Balance Financial Prepaid MasterCard is available to customers in 250 Walgreen’s stores in Detroit, Milwaukee and Nashville. The company also said that the new prepaid debit card will be available nationwide by the end of the year.

    In making a foray into the prepaid debit card market, Walgreen’s reiterated a reality that has already prompted so many other large banks and financial institutions to unveil their own products. The many Americans lacking traditional bank accounts need an alternative to cash transactions and ultra-high fee check cashing and payday lending services. “Millions of Americans do not have – or want alternatives to – traditional checking accounts and debit cards,” says Jason Dubinsky, Walgreen’s vice president and treasurer. “For them, Balance Financial will represent safety, convenience, value and rewards. With Balance Financial as our platform, over time we plan to add more features and functionality that give our customers even more powerful financial tools to get, stay and live well.”

    In other words, the new Walgreen’s prepaid debit card is just the start. While Walgreen’s is already planning to offer Western Union Money Transfers and bill payment services in 2014, the details around the features of its prepaid debit card have already been set. Notably, the card will allow for no-fee ATM withdrawals for cardholders at most of the 8,000-plus Walgreen’s and Duane Reade stores nationwide. Balance Financial customers will also be able to check their account balance, move funds and view previous transactions on a website, mobile app or even at in-store kiosks. Like many other prepaid debit cards, Balance Financial can be reloaded for free via direct deposit. Also like similar products, the Walgreen’s prepaid card comes with a variety of fees, including a $2.95 account activation fee and a $2.95 monthly charge.

    Where the new Walgreen’s card is somewhat different from its competitors is in how it is synchronized with the store’s customer loyalty program. Use of the Balance Financial prepaid card earns points for every dollar a customer spends at Walgreen’s. Users of the card can also earn points for in-store reloads and direct deposits, points that can be used for future savings and other benefits. Dan Caplinger, the financial website Motley Fool’s Director of Investment Planning, recently wrote that this is the “real genius of the Walgreen’s offering” because it encourages customers to stick with the drugstore and make repeat visits. “If it’s successful, then you can expect not only Rite Aid and other direct competitors to follow suit but also a broader set of retailers hoping to cash in on the same trend,” he says.

  • Pros and Cons of Traveling with a Prepaid Debit Card

    Pros and Cons of Traveling with a Prepaid Debit Card

    Should you pack a prepaid debit card for your next trip?

    By Lucy Lazarony

    Going on a trip? Here’s a look at the advantages and disadvantages of traveling with a prepaid debit card in your wallet.

    An alternative to credit cards. If you don’t have a credit card or don’t want to travel with one, a prepaid debit card may be a good option, according to Robert Firpo-Cappiello, Executive Editor of Budget Travel.

    “Traveling with a prepaid debit card is preferable for travelers who do not want to use a credit card,” Firpo-Cappiello says. “Reasons for not using a credit card include a history of racking up charges and high interest (and) already having too many credit cards with high balances or balances at the limit.”

    Terry Maher, general counsel for Network Branded Prepaid Card Association, has sent each of his three children on travel adventures with prepaid debit cards. He monitors their spending and their locations online and adds funds as needed.

    “A credit card is probably just as convenient but do I want to give a credit card to a 22-year-old or a 20-year-old?” Maher says. “I can check their balances daily online.”

    Good for budgeting. A key advantage of traveling with a prepaid debit card is that it forces you to travel on a budget. The amount of money you have to spend on your trip is the amount of money you have loaded on the card, minus any fees you pay for using the card.

    “The major upside to traveling with a prepaid debit card is that you’ve established your budget and you have a tool that forces you to stick with it!” Firpo-Cappiello explains.

    Unlike a debit card tied to a bank account, with most prepaid cards you don’t have to worry about paying overage charges.

    “By using prepaid rather than a card tied to your bank account, you’ll avoid any overage charges,” Firpo-Cappiello says. “But, of course, that means you have to stick to your limit — no wiggle room.”

    Ease of use.  Prepaid debit cards are accepted at the same merchant locations as credit cards and debit cards tied to bank accounts.

    “Because you can use a prepaid debit card at the same places that accept credit and non-prepaid debit cards, it can be ideal for getting the best possible exchange rate and convenience in places, such as on a plane where the only accepted method of payment for snacks and entertainment is plastic,” Firpo-Cappiello advises.

    “A good prepaid debit card provider also will offer replacement and emergency cash disbursement as well as the ability to “reload” the card while you’re on the go.”

    But there are some key downsides to traveling with a prepaid debit card.

    Voluntary consumer protections. Unlike credit cards and debit cards tied to bank accounts, there are no federal consumer protections for lost or stolen prepaid debit cards. If your prepaid debit card is lost or stolen, it’s up to your issuer to reimburse you.

    In most cases, if you have registered a prepaid card with the issuer you can recover the full balance when you report a card is lost or stolen, according to Consumer Action.

    That’s why it’s so important to register your prepaid card before you travel.

    “These cards have to be personalized,” Maher says.

    Fees. Another downside to traveling with a prepaid debit card is the fees that you pay for making transactions with the card.

    Understanding the fees charged on a prepaid debit card is key to getting the most value out of a prepaid card, Maher advises.

    “You need to understand how fees are and be prudent on how you use the card,” Maher says.

    For example, how much are fees for using an out-of-network ATM?  You’ll save money on ATM fees if you stick to in-network ATMs, whenever you can, when you travel.

    “If you’re in the U.S. and you (withdraw cash) at an in-network ATM, you won’t pay a fee at all,” Maher says.

    Maher suggests studying a card’s fee structure, including load fees, before signing up for a card.

    “Do your homework,” Maher says.

    No chip for European travel.  Not all prepaid debit cards come with a smart chip, which may be needed for self-serve terminals and preferred by merchants in some European countries.

    “A lot of Europe has gone chip and PIN,” Maher explains. “You might want to look for an issuer that offers a chip-based card. So you won’t have trouble using (it) at any merchant.

    “If you’re in countries that rely heavily on chip cards, there might be certain transactions you can’t do because it’s not a chip card.”

  • Employers Cannot Mandate Prepaid Cards For Wages

    Employers Cannot Mandate Prepaid Cards For Wages

    Responding to complaints, the Consumer Financial Protection Bureau (CFPB) issued a reminder to employees that they cannot force workers to accept pay on prepaid debit cards.

    by Shane Tripcony

    Over the summer the practice of using prepaid debit cards to pay employee salaries garnered a lot of attention, much of it negative. News outlets, The New York Times, Time Magazine and Businessweek, report that employees of large companies such as McDonald’s and Time Warner Cable complained that they were being forced to accept wages deposited onto a prepaid debit card. They were not offered the option of a paper check or direct deposit.

    Employees, many of them earning minimum wage, argued that payment via prepaid debit card meant they were losing a chunk of their salary to a range of the standard fees associated with prepaid debit cards. In response to the outcry, New York Attorney General, Eric Schneiderman, launched an investigation into rules around the use of prepaid debit cards to pay salaries that were being broken. As part of that effort, Schneiderman requested information from 42 companies doing business in New York – including Sears, Home Depot and Walgreen’s – about their use of prepaid cards to meet payroll. “No worker should have to accept a form of payment that reduces take-home pay and leads to hundreds of dollars in fees,” Schneiderman told NBC News.

    Now Schneiderman is receiving support from the federal government. Last month the Consumer Financial Protection Bureau (CFPB) issued a bulletin reminding employers that they cannot require employees to receive wages on a prepaid debit card. “Today’s release warns employers that they cannot mandate that their employees receive wages on a payroll card,” CFPB Director Rich Cordray said in a statement. “And for those employees who choose to receive wages on a payroll card, they are entitled to certain federal protections.

    In its statement, the CFPB declared that the use of prepaid debit cards to pay wages falls under its jurisdiction under the Electronic Fund Transfer Act and Regulation E. These provisions outline a number of employee protections specific to prepaid debit cards. Among them are written disclosures of all fees related to the cards, access to account history and limited liability in the case of unauthorized use of a card.

    In making its declaration concerning employers’ use of prepaid debit cards, the CFPB announced its intention to aggressively enforce the rules. “The Bureau intends to use its enforcement authority to stop violations before they grow into systemic problems, maximize remediation to consumers, and deter future violations,” reads a statement from the CFPB.

     

Prepaid Debit Card Reviews, Complaints, Etc