Prepaid Debit Card Reviews, Complaints, Etc

Tag: feature

  • Does Your Grandmother Need a Bluebird?

    Does Your Grandmother Need a Bluebird?

    A well-chosen prepaid debit or checking alternative card offers freedom, flexibility and peace of mind to the elderly and their children.

    by Bev O’Shea

    Prepaid debit cards, once the province of the non-creditworthy and desperate, are finally becoming downright respectable (some of them anyway – you still have to be careful). Some cards now specialize; for example, allowance cards and cards for recovering addicts. So far, I haven’t seen suggestions that these should be used for elderly or disabled adults, but the idea seems workable.

    Most are still aimed at what the industry calls “the unbanked.” My guess is that’s not your grandparents. But pair cognitive decline and access to a checking account or credit card, and, well, you can see the potential for disaster.  You may not want to take away credit cards, but you don’t want to leave people you love vulnerable, either. The right prepaid debit card can offer a compromise.

    Shop around and you can find a card that offers sub-accounts and a low (or no) monthly fee. You can both monitor and fund sub-accounts. Check and compare fees because differences can be huge.

    Purchases for more than the amount in the account will not be approved, but the cardholder (say, your grandmother) could shop or buy a meal out. The account owner can opt for real-time text alerts as well. That way, if the card is stolen, unauthorized purchases can be detected right away. You can remove the indignity of constant, obvious monitoring; if monitoring is needed, it can be done discreetly.

    Somehow these bring to mind my grandmother, who wisely put her own father on an allowance the same day he asked for money to buy a newspaper at the corner. He needed pocket change, his own. A prepaid debit card can work much the same way.

    And, unlike a debit card (which can theoretically empty the owner’s checking account if stolen), a prepaid card can be loaded with only the amount you anticipate spending. This can also work as a budgeting tool to impose limits on spending. If self-control or good judgment falls short, the card can keep a budget on track. If the person with the subaccount needs to maintain good credit, there are other ways to do that.  It’s worth noting that prepaid cards do not build credit.

    One candidate for protecting loved ones would be the checking alternative, American Express Bluebird card, which is not technically a prepaid debit card but shares many of the same features. I’m using it now to help a teen learn about budgeting. Once I began using it, I realized that this has the potential to both protect older adults from spending recklessly while also freeing them to use plastic.

    You can buy a kit at Wal-Mart for $5 if you want to load it and use it right away. If you apply online, signup is free. The card can be used anywhere American Express is accepted.

    And no, they didn’t pay me. I just happen to love some people who might need a little protection now and then.

  • 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.”

  • A True Wall Street Occupation?

    A True Wall Street Occupation?

    How the Occupy Card Doesn’t Live up to its Promise  

    by Shane Tripcony

    The terms and conditions of credit, debit and prepaid cards are not what anyone would call scintillating reading. Layered with legalese and hard to decipher jargon, these documents have traditionally (and understandably) been ignored by consumers. Which is too bad because they contain the sort of vital information people need to make smart financial decisions.

    By contrast, the recently announced fee structure for the Occupy Card is a legitimately fascinating read. The Occupy Card is a prepaid debit card that an offshoot of the Occupy Wall Street Movement is hoping to soon introduce to the marketplace, the first of what the so-called Occupy Money Cooperative would like to be an array of financial products and services. And while the proposed fees are not the fully-fledged terms one would wade through with an already available prepaid card, there’s one section you probably won’t find with many other cards: how to avoid the fees. (To be fair, Account Now generously offers tips to save money on their fees page as well, so kudos to Account Now, as well.)

    For instance, the issuers of the Occupy Card dutifully note that it will cost users $1.95 to take money out of an ATM, the result of network and other third party charges (ie. not Occupy’s fault). But to dodge that fee, the Occupy Money Cooperative urges people to get cash back while shopping. It goes on and on like this, with the designers of the Occupy Card offering tips on how to get around fees whenever possible.

    Arguably, in a financial services industry that many believe seeks out revenue generating fees the way a shark hones in on blood, the mere existence of a card-provider tip sheet about avoiding them is incredible. Of course, it’s not a huge surprise, given the Occupy Movement’s loathing of the way it believes Wall Street mistreats its customers and harms society.

    Now, don’t expect other issuers of prepaid debit cards to suddenly follow Occupy’s lead and highlight ways to sidestep their fees. (It sure would be nice, though!) But the sad truth is that they won’t need to because the non-profit, stick-it-to-the-man Occupy Card is far less consumer-friendly than many of the prepaid cards offered by the big banks. That’s right, the greedy capitalists from Wall Street have many, many prepaid debit cards that would cost consumers far less than the offering from the former residents of Zuccotti Park.

    While the Occupy Card has a low monthly account fee of $0.99, the $1.95 charge to take money out of an ATM is painful for anyone – no matter whether it’s the fault of Occupy or not. Also costly are fees for getting basic account information. The Occupy Card charges $2 to speak with a customer service representative and $0.99 to get automated help. As with most consumer-friendly prepaid debit cards, there’s no charge to load the Occupy Card using direct deposit. But any other method to load the card will set people back as much as $5 per transaction. That’s not exactly the kind of help the 99% need.

    It’s also not going to help the Occupy Card gain much traction in the marketplace. Based on our calculations, the average annual fees for the Occupy Card would cost the average consumer $259.40 per year. Truth be told, that lands the Occupy Card squarely in the middle of the pack. There are alternatives, such as Bluebird by American Express, which cost the consumer nothing, based on our standard formula. There are quite a few other cards that average out with lower fees as well. Cards from banking behemoths like Chase and U.S. Bank and American Express offer free ATM withdrawals and cash loads and are, overall, a far better deal for consumers. Even with the fee differences, the Occupy Card does send a message, and many consumers may find the importance of sending that message to be worth those higher fees. Bottom line, here’s the question for everybody: Are you up for occupying the Occupy 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.

     

  • A Personal Finance Teacher’s Aide

    A Personal Finance Teacher’s Aide

    Scholarships are available to this November’s Jump$tart National Educator Conference in Washington, DC

    by Shane Tripcony

    The statistics paint a grim picture. According to the 2012 “Financial Literacy Survey of Adults,” two in five Americans gave themselves a grade of C, D, or F on their knowledge of personal finance topics. And if anything, the survey results indicate that those marks may have been too generous.

    Indeed, 56 percent of those surveyed conceded that they don’t have a household budget and 39 percent reported not having any non-retirement savings. Ensuring that today’s young people don’t eventually find themselves in the same financial predicament as their elders is one of the main goals of the Jump$tart Coalition’s National Educator Conference, which will be held in the nation’s capital this November 1 through November 3.

    Now in its fifth year, this annual conference is devoted to providing Pre-K through grade 12 teachers with the knowledge and resources they need to effectively instruct students about a wide range of personal finance topics. Designed with classroom teachers in mind – both those who lead stand-alone courses in personal finance or who incorporate it into other classes – this year’s gathering will include sessions on everything from curriculum development to what constitutes smart college borrowing for high school students to Federal Reserve Bank resources available to secondary educators.

    The credit bureau Experian recently announced that it would provide 20 scholarships to teachers that have not attended the conference before. Experian, one of the underwriters of this year’s conference, will cover attendees’ registration fee of $395, all conference meals and receptions as well as two nights in a hotel; travel and incidental expenses are not included. Anyone interested in applying for the scholarship should email [email protected] and include the following information: the teacher’s full name; the full name and address of the school or school district where the teacher is employed; and a short description of the course or unit in which the applicant teaches personal finance.

    All applicants must be full-time, licensed and certified teachers currently employed by a school district. Although there is no deadline to apply, scholarships will be awarded on a first-come, first-served basis.

  • Study: Post Recession Changed Behaviors and Attitudes

    Study: Post Recession Changed Behaviors and Attitudes

    New research by Chase and Aite Group reveals how the worst economic downturn since the Great Depression has affected Americans

    by Shane Tripcony

    The so-called Great Recession may have officially ended in June of 2009, but its impact has proved to be longer lasting. That is the main finding of a recent study conducted by Aite Group on behalf of Chase Blueprint.

    The study’s results, released in August, were drawn from interviews of over 1,200 American consumers.  Participants were asked how they have managed their finances since the end of the economic downturn and how their experience during the recession has changed their approach to money management. According to the study’s findings, the summer of 2009 was by no means the beginning of rosy economic times for many people. While it’s true that the number of respondents who rated their economic health as “excellent” grew from 18 percent in 2010 to 22 percent in 2013, the percentage of those deemed their finances “very poor” also spiked, from seven percent to ten percent.

    A sizable chunk of survey respondents also reported losing financial ground since the start of the economic recovery. Among those who declared their financial life either “excellent” or “decent” in 2010, 25 percent said it had deteriorated in subsequent years.

    Even though better economic times have not benefited everyone, the study offers proof that many Americans are more in control of their personal finances today. In 2010, only 41 percent of those polled considered themselves financially literate. Today, that number has risen to 55 percent. The biggest improvement was seen in the Generation Y demographic, largely people in their twenties and a segment of the population especially hard hit by the recession. Among that group, there was a 78 percent increase in those who consider themselves financially literate, from 28 percent in 2010 to over 50 percent today.

    Improved financial savvy also appears to be translating into better habits. For instance, survey respondents reported saving more money and spending less today than in the past. Additionally, those who have seen their financial health improve since the end of the recession are also far more likely to pay off their credit card bills in full every month than before the downturn. In 2008, only 43 percent of that group would completely erase their credit card debt monthly. Today, that number is closer to 60 percent.

Prepaid Debit Card Reviews, Complaints, Etc