Prepaid Debit Card Reviews, Complaints, Etc

Tag: debit cards

  • Tips on How to Best Use a Prepaid Reloadable Debit Card

    Tips on How to Best Use a Prepaid Reloadable Debit Card

    Welcome to our site! Our editors have been covering the credit and debit card space for a total of 30+ years and we are proud to have been featured by the Wall Street Journal, CNN, etc. Your input is invaluable and we’d love to have your opinion regarding tips on how to best use a prepaid debit card (see below) – this site is powered by you!

    Chime is a new Visa card that is amazingly free (unless you use the card outside of their large ATM network). This is best alternative to a prepaid card that we’ve seen in 5+ years and offers all of the benefits of traditional bank account.

    It’s a Visa card and has a lot less fees than the typical prepaid debit card. Also, people with poor credit can apply too as there is no credit check. Chime can be managed entirely from your smartphone. No overdraft fees. No minimum balance. No Chex Sytems. No monthly service fees. No transfer fees. Over 38,000 fee-free ATMs, plus 30,000+ cash-back locations.

    And for a limited time, earn a Cash referral bonus of $50 when you tell your friends and family members about Chime and they sign up (and they’ll earn $50 too)- details within the app after you apply! Click for more info.- you can apply online in just 2 mins with no obligation. Start by simply entering your email address and clicking “Get Started”– over 3 million customers couldn’t be wrong. 🙂 (Referral Link)

    Prepaid debit cards are big business in the United States. According to Time magazine, consumers used them for (http://business.time.com/2013/08/01/prepaid-debit-cards-a-few-good-ones-to-consider-and-several-to-avoid) $77 billion worth of transactions in 2012. That’s a lot of swiping.

    We all know about using them to pay for lunch or a pair of shoes. But have you ever thought about a prepaid card for. Following are some tips on creative ways you can use a prepaid debit card (Visa or MasterCard).

    1. A door prize. You want lots of butts in the seats at the community cleanup or the first PTA gathering of the year? Advertise that a $50 prepaid debit card (or a couple of $25 ones) will be given away. Advertise it extensively.

    Sure, it would be nice if people would attend such things without coaxing, but be realistic: If someone’s on the fence about attending (“Do I want to get up that early on a Saturday?/Be out that late on a school night?”) then the chance of winning might tip them over into Do The Right Thing territory.

    2. An employee incentive. Whether it’s for putting (usable) ideas in the suggestion box or for making it through the holiday crush without losing their minds, your workers might appreciate the chance to get a little something extra.

    Do it through a random drawing or as an out-and-out prize for a really smart suggestion. (Note: These are considered taxable income, according to the Internal Revenue Service. But they’re still fun to get.) On a related note, please note that Pex and Bento offer employee prepaid cards for small to medium sized businesses.

    3. Help to a relative/friend in need. Sometimes handing over cash feels weird. Giving a prepaid card lets the person you love get what he needs: medicine, a bag of groceries, a tank of gas. Better yet: Slip it under the person’s door or mail it anonymously.

    4. Moving expenses.  Donna Freedman, who blogs at Surviving and Thriving (http://www.donnafreedman.com), tells us: “When my daughter and son-in-law moved from Seattle to Phoenix, I saw them off with a big bag of snacks and a $300 prepaid gift card for road expenses. I thought the card would be easier to manage than a wad of cash. (It was.)”

    5. Kid travel gift. If your pre adolescent or teen is heading cross-country to visit his grandparents or to spend the summer with the noncustodial parent, a prepaid card will let him buy his own snacks and incidentals.

    6. Blog giveaway. Want to build subscriber loyalty and get the attention of additional readers? Have a monthly giveaway – and every so often, make it a prepaid debit card. “This is something that we definitely plan on doing for our readers of our website and Facebook page. 

    With our website name talking specifically about prepaid cards, it just makes sense,” says Shane Tripcony, co-founder of BestPrepaidDebitCards.com.  Regular gift cards are popular, too, but not everyone drinks coffee or shops at Target, whereas a prepaid card is good just about anywhere. Heck, I wish I could win one.

    7. New grad gift. It can be tough to guess the needs/desires of an 18 or 22-year-old. A prepaid gift card means not just buying power, but choice. It’s up to him whether he spends at a grocery store or at The Gap.

    8. Tax refund. The major tax preparers let you have the option of a refund via prepaid debit card. You’ll want to keep a close eye on the fees, but if you’re unbanked or underbanked, you want the refund a little faster or you just want to really manage how you spend your tax refund, this could be the right option.

    9. Teacher present. Believe me when I tell you that your kid’s teacher has waaaaay too many mugs already. Please don’t add to that problem. Give a prepaid card because it can be spent at any merchant the teacher chooses. However, I predict at least some of it will be rung up at a bookshop or educational supply store. Teachers are just like that.

    This is a short list of potential ways to use a prepaid reloadable debit card.  What are some creative ways you have used your prepaid card?  We welcome your comments below and would love to hear from you.

  • For Prepaid Cards, Choose EMV Chip Cards, A Smart Card All Around

    For Prepaid Cards, Choose EMV Chip Cards, A Smart Card All Around

    By Curtis Arnold

    Besides the thieves themselves, the main culprit to emerge from the recent heist of personal information from over 100 million Target and Neiman Marcus shoppers isn’t human at all. Rather, the unlikely villain is a decades old piece of technology known simply as the magstripe, or magnetic stripe, that graces the backs of billions of credit, debit and prepaid debit cards carried by Americans in their pocketbooks and wallets everyday.

    But, there is an alternative on the way, the EMV chip card.

    In a way that not even the most well crafted editorials or investigative journalism series could have accomplished, the collective anger spawned by millions of consumers has focused a spotlight on the inability of magnetic stripe technology to safeguard the critical account and personal data it contains. “Basically, the magnetic strip contains all the data needed for credit card fraud,” says Lamar Bailey, Director of Security Research for Tripwire, a data security firm that works with companies like Visa, MasterCard and Safeway. “Unfortunately, these strips are very easy to read and duplicate and are a favorite target for a wide variety of financial fraud.”

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    [button link=”#Comments” variation=”darkgrey”]We want your opinion![/button]  What do you think of the recent security breaches?  How safe do you feel your personal data is currently?  What are your main concerns about using credit, debit or prepaid cards?  We want to hear from you!  Just add in your thoughts in the Comments section below!
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    As difficult as the lesson has been to learn, there is now a more widespread understanding of the need to quickly embrace so-called smart cards. Also known as EMV or chip and PIN cards, they have been the standard in Europe for years and offer far greater identity protection than magnetic strips. Introduced in the 1990s in Europe, these so-called EMV cards take their name from Europay/MasterCard/Visa. As Robert Siciliano, the CEO of IDTheftSecurity.com, explains it, EMV chip cards contain an embedded microchip that is authenticated using a personal identification number, or PIN. “When a customer uses a smart card to make a purchase, the card is placed into a PIN pad terminal or a modified swipe-card reader, which accesses the card’s microchip and verifies the card’s authenticity. The customer then enters a four digit PIN, which is checked against the PIN stored on the card.”

    This is another way of saying that smart cards are a tougher nut for identity thieves to crack – and a good explanation as to why global cyber criminals have set their sights on the U.S. It also means that, whenever possible, American consumers should choose a payment card that offers EMV chip protection. This is particularly true for the growing number of Americans who utilize prepaid debit cards.

    While it’s true that the prepaid debit card industry has been exploding recently – Mercator Advisory Groups reports that Americans loaded $192 billion onto prepaid cards in 2012 – the mainstreaming of a product once favored primarily by those who couldn’t get bank accounts or credit cards has not yet been accompanied by stronger consumer protections. For instance, if a credit card is lost or stolen, federal law limits consumer liability to just $50, although most major card issuers offer zero liability. Federal law also protects debit cards, although limiting liability depends on a consumer quickly reporting a card lost or stolen. By sharp contrast, prepaid debit cards do not have blanket protection. The terms and conditions vary depending on the card issuer, with some being quite good and others nonexistent.

    Because of that lack of protection, prepaid debit card users concerned about fraud can avoid having their accounts cleaned out by getting an EMV chip card. Unfortunately, these smart cards are not available everywhere – not even close. Some card issuers, such as the Members 1st Federal Credit Union, do offer EMV chip reloadable prepaid cards. But as is the case with most debit and credit cards, a smart card option is not yet available. “EMV has not been popular in the US because of the high cost of replacing all the credit card readers and millions of credit cards,” says Lamar Bailey of Tripwire.

    What can change that? For many credit and debit card issuers, the change is underway and expected to be complete by 2017. A combination of public pressure, regulation and simple self-interest could prompt the same move by prepaid card providers. “The technology in a magnetic stripe card has been hacked and decimated,” says Siciliano of IDTheftSecurity.com. “EMV for prepaid cards would bring them to the same security standard as credit and debit cards and more than likely open up a new market for card providers.”

    Photo Information below.

    Caption:  By 2017, look for embedded security chips to be present in all US credit and debit cards. (Photo credit: Wikipedia)

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    [button link=”#Comments” variation=”darkgrey”]We want your opinion! [/button] What do you think of the recent security breaches?  How safe do you feel your personal data is currently?  What are your main concerns about using credit, debit or prepaid cards?  We want to hear from you!  Just add in your thoughts in the Comments section below!
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  • Prepaid Card Fraud Controllable

    Prepaid Card Fraud Controllable

    A recent report by Mercator Advisory Group examines the vulnerability of prepaid debit cards to criminals.

    by Chris Warren

    Prepaid debit cards make it into the news a lot these days. A lot of the time stories are focused on the maneuvering of large financial services companies like Chase and American Express and the various strategies they’re implementing to grab a larger chunk of this ever-growing market.

    But there has also been a steady stream of news recently about fraud involving prepaid debit cards. For instance, in mid-November six Yonkers, New York residents were arrested and charged with hacking into bank financial systems and swiping prepaid debit card information that enabled them to steal $45 million. There have also been frequent reports of criminals posing as utility workers, who threaten victims with shutting off their power unless they put money on a prepaid debit card.

    While the use of prepaid debit cards by criminals is gaining notoriety, the scope of the overall problem may not be so dire. Indeed, according to a recent report by Mercator Advisory Group, a consulting company, fraud involving prepaid debit cards is much smaller than what takes place with debit cards. The report, “Prepaid Card Fraud and Risk Controls in the United States,” notes that criminals target credit, debit and prepaid cards alike simply because they all have some level of weakness that can be exploited.

    Prepaid Card Fraud Controllable

    In addition, Ben Jackson, the report’s co-author and a senior analyst at Mercator’s Prepaid Advisory Service, insists that further regulation of the industry isn’t necessary. “Prepaid fraud is a serious, but manageable problem, as long as the members of the prepaid value chain work together. There is nothing inherent to prepaid that makes it more or less risky than other financial products,” he says.

    Furthermore, Jackson outlines a variety of best practices that can be implemented to thwart criminals. For instance, the report says that card issuers and retailers should not be hesitant to say “no” to customers who raise red flags. In addition, the report encourages companies and banks to ask for additional documentation in situations when they feel it’s warranted and also to create a list of problematic names, addresses and phone numbers.

  • Girl Scouts Embrace Prepaid Cards

    Girl Scouts Embrace Prepaid Cards

    A Girl Scouts chapter strikes a deal with prepaid card company, SpendSmart Payments.

    by Chris Warren

    Thin Mints, Samoas, Tagalongs and Lemonades are definitely not financial terms. Yet the truth is that, aside from fundraising, one of the main reasons Girl Scouts from across the country sell these and other varieties of cookies is to learn something about money management and running a business. Think about it: Successfully selling hundreds or thousands of cookies requires smart marketing and sales strategies, wise inventory management as well as record keeping and order tracking.

    While involvement with the organization’s sprawling cookie business is certainly one way for young girls to become more financially aware and savvy, one Girl Scouts chapter has gone a step further. In October the Charlotte, North Carolina-based Hornets’ Nest chapter announced that it had established a partnership with SpendSmart Payments Co., a financial services outfit and prepaid debit card issuer based in San Diego, California.

    According to a recent story in The Kansas City Star, SpendSmart is crafting a financial education program that will be offered starting in January of 2014 to the 16,000 girls in North and South Carolina who make up the Hornets’ Nest chapter. With materials designed to appeal to girls from kindergarten through high school, the curriculum being developed by SpendSmart is meant to help girls understand the value of money and credit, as well as learn how to budget and use plastic wisely.

    “That last point of emphasis caught my attention,” Kansas City Star reporter Steve Rosen wrote. “As part of its partnership, Scouts 13 and older can sign up for the SpendSmart Prepaid MasterCard.”

    It is understandable why SpendSmart would be eager to become well known by thousands of young girls. The company offers prepaid debit cards specifically designed for teens and parents. Among other features, SpendSmart cards alert parents via text or email whenever a purchase is made, allowing them to monitor how well (or poorly) kids are spending money.

    Rosen points out that SpendSmart charges a $3.95 monthly fee, an amount that is both far higher and lower than other prepaid debit cards. He also notes that prepaid cards like those offered by SpendSmart also charge for withdrawing money from an ATM, replacing a card and checking an account balance. “The upshot: Whether it’s SpendSmart or some other prepaid debit card, weigh the costs against the services provided and decide on the best deal.”

    SpendSmart certainly hopes the Girl Scouts like the cards and the information they’re offering. The company hopes the deal with the Hornets’ Nest chapter is the first of many partnerships with the Girl Scouts.

  • The Occupy Card Moves Ahead

    The Occupy Card Moves Ahead

    The Occupy Money Cooperative needs to raise $900,000 to make its card a reality.

    by Chris Warren

    The Occupy Wall Street Movement’s first steps into the financial services industry have not been particularly smooth. The announcement this past summer that the Occupy Money Cooperative, an offshoot of the anti-status quo coalition that grabbed the world’s attention with its street protests and barbed criticism of banks in the fall of 2011, would attempt to issue a prepaid debit card was an immediate source of fascination.

    Yet when the proposed fees associated with the Occupy Card were unveiled in September, an avalanche of criticism quickly followed. Far from being hailed as a savior riding to the rescue of helpless citizens being preyed upon by the big banks, respected observers like Consumer Reports declared that the card’s fees were worse than many other products already on the market. “Our first look at those proposed fees shows that the Occupy Card needs some work if its sponsors truly want it to be superior to other prepaid cards,” declared the Consumer Reports review.

    Nevertheless, the supporters of the Occupy Money Cooperative appear just as determined as ever to not only launch its prepaid debit card but to revolutionize the banking system. According to an article in the Cornell Daily Sun, the student newspaper at Ithaca, New York’s Cornell University, university professor Robert Hockett is among those working to make the card a reality.

    According to the article by reporter, Helen Donnelly, the Occupy Card will be launched once Hockett and the other co-founders of the Occupy Money Cooperative can raise $900,000 in initial operating capital. The article does not say how close, or far, the group is from reaching that amount.

    Despite its bumpy rollout, Cornell’s Hockett insists that Occupy’s ambitions are still to go well beyond just a prepaid debit card. “The Occupy Money Cooperative is beginning with the debit card. This debit card is a specific counterpart to cards like these that exist in existing banking institutions already offered. Chase Liquid is probably the best-known example,” Hockett told the newspaper. “The ultimate plan is to offer all the other services that these existing banking institutions already do, but on a non-profit basis.”

     

  • Hispanic Consumers Propel Prepaid Card Growth

    Hispanic Consumers Propel Prepaid Card Growth

    Hispanic consumers account for a growing segment of prepaid debit card users.

    by Lucy Lazarony

    Hispanic consumers have embraced prepaid debit cards. According to an August 2012 research study, “Consumer Payments in the U.S.: The Latino Market” by Packaged Facts:

    • There are 4.6 million Latinos who used a prepaid debit card in the last 12 months.
    • They make up 15 percent of all consumers using prepaid debit cards.
    • Between 2011 and 2012, the number of Latinos using prepaid debit cards increased by 7.2 percent from 4.3 million to 4.6 million.
    • It is projected that by 2017 the percentage of Latinos using prepaid cards will increase from 13.8 percent to 16.0 percent and the number of Latinos depending on prepaid debit cards will grow from 4.6 million to 6.3 million for cumulative growth of 35.8 percent.

    The principal source of primary data for the study is the Winter 2012 Experian Simmons National Consumer Study, which was fielded between February 2011 and March 2012.

    Prepaid debit cards targeting Hispanic consumers include the Univision MasterCard prepaid card and The Coopera Card, available through credit unions.

    Miriam De Dios, Chief Executive Officer of Coopera, says prepaid debit cards are good payment options for Hispanic consumers for several reasons.

    “A prepaid reloadable card provides safety, access to new payment methods, can serve as an alternative to check-cashing, buying money orders and using money transfers for the financially excluded and it can be a way to reduce payroll costs for small businesses,” De Dios explains. “However, this product needs to be culturally relevant to Hispanic cardholders and it needs to be a stepping stone into other financial products and services that can help consumers achieve their financial goals. Therefore, credit unions are well suited to offer this product as well as financial education, loans, etc. to help the consumer with more.”

    Likes and dislikes

    According to De Dios, the features of prepaid debit cards that Hispanics like most include being able to open the card without needing a credit history, being able to use the card internationally, and being able to obtain secondary cards for family abroad, and having cardholder support available and accessible in English and Spanish.

    Text message alerts, convenient loading options, and low fees are also popular with Hispanic consumers, De Dios says.

    Turnoffs for Hispanic prepaid debit card users include inconsistent Spanish availability of services and features and too many restrictions to open and obtain a card, De Dios explains.

    Des Moines Metro Credit Union has been offering The Coopera Card since January 2012. The bilingual support (phone and website) is great for our members,” says Traci Stiles, business development manager at Des Moines Metro Credit Union. “They also like the ability to load money from their account over the phone or in person at the credit union. They like to use the card for everyday purchases and online purchases. Also, they use it to pay bills.”

    Forging bonds

    Many Coopera Card users have other services at the credit union as well, Stiles says.  “I think most of our members who have a Coopera Card also have other services with us. We have a Credit Builder Loan that is very popular. Also, many people leave some money in their account for savings,” Stiles says.

    One of the aims of The Coopera Card is to build new financial relationships with Hispanic consumers, De Dios says.

    “We work with credit union issuers across the country and they are integrating this product with their overall product suite and promoting it locally through Spanish media, in an outreach capacity through financial educational opportunities and through partners. Credit unions are also including this in their toolkit as they build relationships with employers with a large number of Hispanic employees and Hispanic-owned businesses.”

Prepaid Debit Card Reviews, Complaints, Etc