Prepaid Debit Card Reviews, Complaints, Etc

Tag: debit cards

  • 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

  • Banks Are Falling In Love With the Debit Card All Over Again

    Banks Are Falling In Love With the Debit Card All Over Again

    When financial reform targeted the lucrative overdraft and interchange/“swipe” fees, the banking industry began to move away from debit cards, but now banks are singing a different tune. With new Federal Reserve data showing that caps on swipe fees are working as intended, banks are going a different route to make up for the lost revenue: volume. Targeting tech savvy millenials, banks are marketing debit cards now more aggressively than ever; even resurrecting rewards programs in some areas.

    Last year, banks sent out 42 million direct-mail offers for new debit cards, up 6% from 2011 according to Mintel Compermedia. “It does appear that banks have regained their footing to some degree and are beginning to focus on debit card marketing,” says Susan Wolfe, vice president of research at Mintel Compermedia. Numbers don’t take into account the exponential rise in online marketing that’s taking place. With online marketing being far more cost effective than direct-mail, actual numbers are probably a lot higher.

    “Interestingly, banks are promoting online banking, mobile banking and text banking as ways to stay on top of debit card spending,” Wolfe says. “Debit is also positioned as a better way to manage finances,” since users can keep track of account balances in real time via text or email alerts on their cell phones.

    While debit card usage is up, credit card usage among 18-24 year-old college undergraduate students fell by 10% in just two years. Millenials are more money-conscious now, opting for debit card rewards, rather than credit card fees charging them to use their own money.

    For more information on this story, visit: http://business.time.com/2013/03/28/why-banks-love-debit-cards-again/

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

  • Debit Cards and Rewards

    Debit Cards and Rewards

    The demise of debit card rewards program have been greatly – well, make that slightly – exaggerated

    The government’s response to the financial meltdown in 2008 was years in the making and an extremely controversial piece of legislation that passed on a strictly party line vote. One component of the sweeping Dodd-Frank Act, which President Obama signed into law in 2010, is now thought of as the death knell for debit card reward programs.

    Inserted into Dodd-Frank Act at the last minute, the so-called Durbin Amendment, named after its sponsor, Illinois Senator Dick Durbin, capped the fees banks can charge retailers when customers purchase something with a debit card. The Durbin Amendment capped at 21 cents the fee banks are allowed to charge retailers when a customer swipes a debit card. Earlier, banks charged an average of 44 cents per transaction. Banks complained that the new limit would cost them billions of dollars, which is certainly true, and in response began to institute a variety of new fees on checking accounts and rolling back their rewards programs to compensate for the lost revenue. (You can take a look at the full Dodd-Frank Act / H.R. 4173 at the following link, but be warned: this is an 848 page PDF file and it may take a while to load, especially if you are on a slower connection. http://www.sec.gov/about/laws/wallstreetreform-cpa.pdf)

    Contrary to the protests, though, not all debit card rewards programs are extinct. Here are a few that are still kicking:

    Cash Back Lives

    Unlike so much of the jargon used in the financial world, this is a program that does exactly what it says. You get a small percentage of your purchase amount credited back to your bank account. However, there are some limitations. This bonus is applicable only if you purchase at participating retailers. Ally Bank, Beneficial Bank and PerkStreet Financial offer cash-back rewards programs. For example, the online bank PerkStreet offers 1% cash back on most purchases and 2% if you purchase from select online retailers, including Amazon, Target, BestBuy and Wal-Mart.

    Points and Prizes

    As much as people love to get cash back for purchases they have to make anyway, earning a few extra bucks doesn’t feel at all like getting a present. Many debit card issuers understand that there’s more of a thrill when your use of their card actually earns you something tangible, like a meal at a restaurant. That’s why banks and credit unions reward their customers with points for everything from carrying high balances to making minimum deposits to, of course, using their debit cards.

    These rewards programs are straightforward: use the debit card to earn points, which can then be redeemed for a variety of different prizes. For instance, at the time of this writing, Chase has the Disney Visa debit card, which offers deals such as a $50 credit toward Disney Cruise Line vacations and a 10% discount at select Disney Resort restaurants. Logix Federal Credit Union’s debit card reward points that can be used on electronics, round-trip travel on any major airline, gift cards and even adventures like hot air balloon rides and whitewater rafting.

    Size Matters

    With all the protests banks were lodging about the impact of the Durbin Amendment, you may wonder how banks can still afford to offer rewards. It’s simple. The Durbin Amendment does not apply to banks that have less than $10 billion in assets. So, smaller banks are not affected.

    Don’t Rush In

    Keep in mind that rewards programs are not offered by banks out of selfless altruism. No, banks promote these reward debit cards because they make the bank money. As with so much in the personal finance universe, that is accomplished through fees. Most debit reward cards come with fees. For example, Bank of America’s annual fee for its Alaska Air debit rewards card is $30. Don’t forget that there is no such thing as a free lunch. Rewards programs are aimed at making accounts more attractive; they don’t make the account fundamentally better.

    So, when opening a debit card account, make sure that the basic features of the account fit your needs. Don’t rush into an account just for the rewards program. Otherwise, your fees could easily surpass your rewards — and where’s the reward in that?

  • Three Alternatives to Traditional Credit Cards

    Three Alternatives to Traditional Credit Cards

    Long gone are the days when credit cards were the only choice for people in need of plastic. Here are some other options

    Imagine walking into a restaurant and being told that a menu is not needed because there’s only one dish being served. From time to time that happens – set price, or prix fixe, menus pop up at fancy restaurants and around holidays – but for the most part it would prompt many of us to head for the door. We all like choices.

    Major financial institutions, like most restaurants, understand the need to offer different card offerings to meet the varied circumstances and tastes of their customers. As a result, many now offer three card options beyond traditional credit cards. Consumers can choose between secured credit cards, conventional debit cards and prepaid debit cards. Banks are tailoring their cards to meet the needs of different market segments, offering secured cards to young people and others eager to build good credit, issuing conventional debit cards to most checking account customers, and providing prepaid services to those who do not have bank accounts or who have other reasons for wanting prepaid cards. The choices assure almost all consumers can enjoy the safety and convenience of shopping or paying bills with bank or brand imprinted cards. Here’s a bit more about each option.

    Secured Credit Cards
    An inevitable part of life is to face financial stresses and setbacks. It just happens. And that has especially been the case over the past few years, as the economy has limped along and many have had to contend with lost jobs, lower wages and, often, a resulting damaged credit history. Secured credit cards are intended for people who have had some financial difficulties and thus have trouble qualifying for the sort of unsecured lines of credit typical with a standard credit card. By contrast, secured credit cards require you to pay a deposit in exchange for borrowing privileges. Think of it this way: rather than the $10,000 or $20,000 limit many credit card companies grant their customers, secured credit cards generally set your limit at whatever amount you can deposit into your account upfront. So, if you open a secured credit card account with $1,500, then you have a credit line of $1,500. Not all cards have such a strict formula for establishing credit lines, especially after you’ve proven that you reliably pay your bills. Qualifying standards are relatively lenient because that upfront deposit acts as collateral. In exchange, however, you face strict payment requirements and risk substantial penalties and interest hikes if you fail to use your card responsibly. The average secured card requires $50 in annual fees, and some charge more than 20 percent interest. The cards also typically assess late charges. The good news, however, is that prudent use of secured credit cards can help rebuild a person’s credit rating.

    Conventional Debit Cards 
    “Free” checking is very seldom completely fee-free. When you open a conventional checking account, the majority of banks issue a debit card as part of their service. You may use a debit card to withdraw funds from your account on those occasions when you cannot write checks. You can also take advantage of online shopping and bill-paying services, which make spending and tracking your money far easier than writing out checks and combing through your register to balance your account. While conventional debit cards combine the convenience of a credit card with the security of a check, they can often come with fees. More and more banks are charging their customers monthly fees when they opt to use their debit cards for both PIN and purchases that require a signature.

    Prepaid Debit Cards
    Prepaid debit cards offer the same convenience as credit and conventional debit cards without the risk of overspending. That’s because prepaid debit cards require consumers to deposit, or load, money into their account upfront. And the amount of money loaded onto the card is all that you can spend. Most prepaid debit cards require no application, and they charge no monthly fees when you meet minimum monthly loading requirements. Major financial institutions offer prepaid debit cards that carry all the same consumer protections as their conventional cards, and many are now including Federal Deposit Insurance Corporation (FDIC) protection as well. Consumers, however, must compare prepaid debit cards, because many providers still charge “maintenance” and “inactivity” fees. Mitchell Weiss, co-founder of the University of Hartford’s Center for Personal Financial Responsibility, tells U.S. News & World Report, “These cards prey on the under and unbanked consumers, who mistakenly believe they’re more economical than having a traditional checking account.” In the very worst cases, consumers may lose up to 20 percent of the money they put on their cards to hidden fees.

    How to Choose a Card 
    Because they submit regular monthly reports to the three major credit bureaus, secured credit cards help you establish, restore or improve your credit. Tied to your checking account, conventional debit cards make routine transactions more convenient. Retailers and service providers typically accept debit cards even when they do not accept personal checks, and conventional debit cards make online shopping easy. With most conventional debit cards, however, you run the risk of overdraft penalties. For many families, prepaid debit cards can be a good choice, because they offer the convenience of credit and conventional debit cards while they make sure you stay on your budget. If you want to shift your family to a “cash only” economy, prepaid debit cards can help.

    No single card is the best choice for everyone. Your best choice depends on your financial situation and objectives. Many credible online sources provide tools for comparing prepaid debit cards and calculating which best satisfies your needs. And picking a card doesn’t have to be an either-or proposition; many families choose to carry and use one of each.

  • Prepaid Debit Cards for Teens

    Prepaid Debit Cards for Teens

    Prepaid debit cards for teens are available on the internet and they are in great demand nowadays because so many parents are getting them for their teens. It is actually very easy to apply for these cards because all one needs is a computer and access to the internet. Each person should carry out good research on the various companies which offer these prepaid debit cards for teens before making a final decision.

    By doing this, you will ensure that they get the best prepaid debit card that is most suitable for them. Therefore, after getting an appropriate card, you should read all about the regulations that they will be required to follow and then fill out the forms provided.

    The best part about prepaid debit cards for teens is that there are no overdraft fees, credit checks or activation fees required therefore one gets to save on a lot of money. Moreover, with this card, there is easy monitoring of parents on their child’s spending habits. Also, the spending limits are very strict in that, one can only spend up to a certain amount daily and this gives the teen good control in their spending habits.

    Parents like you will be very happy about these cards because you get to know some of the places your child goes to and what they buy. It helps a teenager to learn how to be responsible at an early age when it comes to spending money.

    The best prepaid debit cards for teens are accepted in very many locations around the world wherever Visa and MasterCard debit cards are accepted therefore a teen can use it even when they are away on tour. However, this is also a great advantage because in case of an emergency and they need some cash, you can just load their card for them online and they receive money on their card instantly. There are a wide variety of prepaid debit cards to choose from and they all have different designs whereby one can choose according to their personal preference.

    Another advantage of prepaid debit cards for teens is the fact that the teen gets text alerts even if the card has just a small balance. Moreover, each parent has the ability to set up email alerts and text messaging so as to track their child’s spending habits. Furthermore, you can also set up this card in a way that you can unlock or lock your child’s access to their account just in case something goes wrong. It is thus a very good idea for parents to get these cards for their teenagers because aside from teaching them about good spending habits, they are able to fund them in case there is an emergency.

    However, the fee charged when one uses these debit card is very reasonable especially since one is not required to pay anything in the beginning. Therefore, one gets to save a lot of money. There are some regular prepaid debit cards that will work for teens (Walmart MoneyCard prepaid MasterCard) and then there are some specifically designed for teens such as the BillMyParents prepaid debit card. It comes with no activation fee, no overdraft fees, and no credit checks.

Prepaid Debit Card Reviews, Complaints, Etc