Prepaid Debit Card Reviews, Complaints, Etc

Tag: prepaid debit cards

  • Debit Cards: A Growing Threat to the Banking Industry

    Debit Cards: A Growing Threat to the Banking Industry

    With ease of use and widespread availability, debit cards are becoming a growing threat to the banking industry.  Last year, prepaid debit card usage was up 18% while checking account usage plummeted from 92% to 88%.  While users avoid overdraft fees, debit cards are not cheaper than checking accounts.

    Incidentally, scores of users walked away from banks and the fees associated with them, lured by big named celebrity endorsers only to wind up paying even more money.  John Ulzheimer, President of Consumer Education at SmartCredit.com, warns against being tricked into thinking there aren’t any free alternatives.  “Debit card users are lazy,” says Ulzheimer.  “Free checking isn’t gone.  With just a cursory amount of shopping around, you can find a debit card that’s not only free, but will also give you an unsecured line of credit.”

    Gerri Willis of Fox Business Network’s The Willis Report fears,  “People are being robbed blind simply because they like the branding and ease of use that comes with the debit card.”  Over $82 billion was uploaded onto debit cards last year alone.  “Debit cards don’t help your credit score, there are no savings involved, and the users don’t have the opportunity to establish a relationship with a bank,” she says.  “You need access to what the banks have to offer to purchase homes, do business, and even education for your children,” said Ulzheimer.

    Today, many neighborhood stores and markets offer free “cash back with purchase” options at checkout, helping alleviate some of the hits most users take to their wallets, but in the long run, a little research can go a long way.  For more research on the best options for you, visit our in-depth reviews here on bestprepaiddebitcards.com.

    For more information from The Willis Report, visit:  http://video.foxbusiness.com/v/997395602001/millions-turning-to-prepaid-debit-cards?intcmp=related

    or visit :  http://video.foxbusiness.com/v/1559371429001/are-prepaid-debit-cards-mistake?intcmp=related

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

  • Money Management Made Easy Using Prepaid Debit Cards

    Money Management Made Easy Using Prepaid Debit Cards

    How prepaid debit cards can help keep you on budget and in control of your finances

    They’re the kind of stories that make people shake their heads in disbelief. Layered with no small amount of schadenfreude, these are the tales of talented athletes whose prowess on the field and court earn them both adulation from fans and millions of dollars per year. Yet somehow, through horrific spending habits and bad advice, all of those millions disappear. ESPN recently aired a documentary, appropriately titled “Broke,” chronicling the commonplace financial problems of once wealthy athletes, which included a stunning list of athletes who have declared bankruptcy: names like Mike Tyson, Dorothy Hamill, Derrick Coleman, Bill Buckner and many, many more.

    While it’s easy enough to cluck disapproval about the profligate ways of pampered sports stars, the unfortunate reality is that the bad financial habits that lead people like Terrell Owens to go broke are just as common among the less well known and well paid among us. And in fact, while there may be less zeros involved with the debts, there are plenty of people who chronically spend more than they make. One of the main culprits that allow that sort of bad behavior to spiral out of control, of course, is the credit card. Indeed, convenient and necessary as they might be, credit cards are all too often the bane of sound money management.

    This all may sound like familiar territory, but given the rampant problem of indebtedness in this country it’s worth revisiting. As anyone who has ever had one knows well, credit cards have a limit, the maximum amount you can charge. But let’s be honest: credit card limits aren’t individually tailored to your financial situation and there are rarely instances when people can afford to bump up against their credit limits. And if you’ve reached that point, you’re already doing damage to your credit, a signal to lenders that they should jack up the interest rate they charge you on mortgages and car loans because you just might not have the money to repay them.

    Sometimes, good money management – which, in the end, is all about not spending more than you have – requires a little tough love. Which is where prepaid debit cards come in. The reason prepaid cards won’t get you into the kind of trouble a credit card with a high limit can is deceptively simple: there’s no borrowing (that is, credit) involved. In other words, a prepaid debit card forces you to live within your means because it only allows you to spend money that you have already earned and used to fund, or load, the card. You can’t put money on the card unless you have the money in the first place. In a way, it’s like awarding yourself an allowance.

    There are other ways a prepaid debit card aids the money manager lurking somewhere inside us all. Knowledge truly is power when it comes to managing your finances. For one thing, you can easily keep track of your prepaid card balance online or on your smart phone. A prepaid card can also be an enormous help in crafting a family budget. Take the time to review a month’s spending on your prepaid card. Who knew you were spending $10 a week on sodas? Well, now you do, and that knowledge should help you devise a budget that reflects your priorities.

    There are other, less obvious ways that a prepaid card can help with money management. Cash flow is an important aspect of sound finances and prepaid debit cards can be helpful in aiding the swift delivery of income tax refunds for those who don’t have bank accounts. According to the Federal Deposit Insurance Corporation (FDIC), about 30 million American households don’t have bank accounts. If someone has a bank account and opts to get their refund deposited directly, they can expect to wait about two weeks from the time they file their return. But if they have no choice but to wait for a paper check, it takes 6 to 8 weeks for a refund to arrive. By contrast, people with prepaid cards, whether they have bank accounts or not, can get their tax refund deposited almost immediately, eliminating the need for any more refund-anticipation loans.

    Prepaid cards aren’t perfect, of course. And while prepaid debit card issuers charge fees, you can still get a card with minimal fees by shopping carefully. “Some prepaid debit cards are loaded with fees than can often resemble a minefield. There are, however, prepaid debit cards that have very few fees. Comparison shopping for prepaid debit cards is more important than almost any other financial-services product because you can, in fact, save hundreds of dollars each year by choosing a fee-friendly version,” says John Ulzheimer, president of consumer education at SmartCredit.com.

    Who knows, if Terrell Owens or Bernie Kosar or any of the other athletes who have had financial problems had been using prepaid debit cards they might be remembered today only for their athletic achievements.

  • 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.

  • Rewards Season: Prepaid Debit Card Benefits to Look For

    Rewards Season: Prepaid Debit Card Benefits to Look For

    No, it’s not the Oscars and there won’t be any tedious speeches. But prepaid cards do offer ways to get awards

    There’s no official name or diagnosis, but most of us know someone who suffers (or benefits) from a condition perhaps best called frequent flyer-itis. You know the type: they’re the ones whose wanderlust is so overpowering that they pull out their co-branded airline credit card to pay their rent, buy groceries or even take home a six-pack. In a quest to wrack up miles, the card is used for everything.

    Given the popularity of many of these so-called rewards programs in the credit card universe, it should come as no great surprise that the issuers of prepaid debit cards use the same quid pro quo approach as a way to encourage more frequent use of their products. Like their credit card brethren, these rewards can range from cash back to points earned toward purchases. Here’s a look at how a few of the many rewards programs work.


    Free Food

    Not surprisingly, the rewards program associated with the grocery store chain’s Kroger 1-2-3 REWARDS Prepaid Card revolves around food. That is, the enticement to get holders of the card to use it as much as possible is the prospect of earning free gallons of milk and Fuji apples.

    The program is set up in a very familiar way. Every $1 you spend using your rewards card earns you points, which can then be redeemed towards the purchase of groceries. To put it simply, every 1,000 points you earn translates into $5 in groceries. But how quickly someone can reach that 1,000 point milestone depends on where they use their card. If you go to, say, McDonalds or Whole Foods – any store outside the Kroger family – then each dollar spent earns 1 point. So, $500 worth of Big Macs would garner 500 points.

    But if you opt instead to pull out your 1-2-3 REWARDS Prepaid Card to settle up your tab inside one of the Kroger stores that will earn you double the points: so $500 worth of Kroger groceries would yield 1,000 points. And if you go one step further and actually buy Kroger brands when you’re at one of their stores, points accumulate faster. In that case, every $1 spent yields 3 points. So, again, $500 spent with the prepaid card on Kroger brand cereal and coffee filters would earn 1,500 points. All of this is to say that the more loyal you are to Kroger, the quicker you’ll be rewarded – notification of rewards come automatically via email.

    For the moment at least, using the Kroger REWARDS card outside the grocery center can save you a bit when you fill up your car – at a Kroger Family of Stores Fuel Center, naturally. There, using your card to purchase gas saves you $.05 per gallon.


    Just Rewards?

    To be clear, there’s not a lot of reinventing the wheel when it comes to the design of prepaid debit card reward programs. The formula is simple: the more you use your card, the more offers and cash back you’ll receive. In that way, the NetSpend Payback Rewards card is squarely in the mainstream, albeit with a few exceptions. For instance, those who use the card receive offers from merchants, which they can redeem. Additionally, NetSpend offers a referral program. Whenever a family member or friend loads at least $40 onto their new card, you’ll receive a $20 credit.

    The structure of the NetSpend program brings up an issue that is important to consider with all prepaid debit card rewards – that of fees. Or, to be more specific, what is the best card plan to choose if you don’t want fees to eat up all you would earn in rewards? With NetSpend, for instance, choosing the Pay-As-You-Go option, which has no monthly fee, seems unwise if your idea is to make lots of purchases and reap lots of rewards. With that plan, you pay $2 every time you make a PIN purchase and $2.50 for each ATM withdrawal, plus whatever the ATM owner charges.

    NetSpend also offers a FeeAdvantage Plan, where, for $9.95 per month, PIN purchases are free. And if you start depositing $500+ monthly to your account, you qualify for the NetSpend Premier FeeAdvantage Plan, which works the same way as the FeeAdvantage Plan but costs only $5 per month. Whatever you choose, be sure to pay close attention to the fees you have to pay as you work your way towards the rewards. A reward doesn’t look so good when you have to pay big bucks in fees just to get it.

    For more information on NetSpend’s purchase plans, click here.

    For more information on the NetSpend rewards program, click here.


    The Social Network

    Like its competitors, the AchieveCard is set up in a way that you can probably recite in your sleep at this point. Reward points are earned by using the card for purchases. What’s unique, though, is that the bank incorporates social media into its point structure. In other words, you can earn points by going on Facebook and championing the card.

    The following table explains the AchievePoints program; it can also be found here.

     

    How do I get AchievePoints? How many? Tips:
    Make Purchases
    Credit Purchases (Signature) 3 points for every $1 spent To earn the most points, always select CREDIT instead of DEBIT at the register. It’s that easy!
    Debit Purchases (PIN) 1 point for every $1 spent
    Monthly Bonuses *Bonus Points are awarded on the 5th of each month, for the previous month’s activity
    Load at least $1,000 1,000 Bonus Points This is DOUBLED if you load with Direct Deposit.Ex: Direct Deposit $1,000 = 2,000 bonus points!
    Make at least 30 purchases 1,000 Bonus Points The more you buy, the more points you get… Aim to use your card at least once per day!
    Keep your account in good standing Up to 10,000 Bonus Points You pay your monthly maintenance fee, we give you a bonus! 1,000 points your first month, 2,000 points your 2nd month…capped at 10,000 bonus per month after month 10.
    Extras
    Facebook “Like” 5 points for every item you click the “Like” button This is one of the EASIEST ways to earn points! Simply visit the AchieveRewards website, click on an Auction or Sweepstakes Item and Click “Like” or “Share!” You may only like/share each item once, but new items are posted EVERY DAY!
    Facebook “Share” 10 points for every item you “Share” on Facebook

     

    Smarty Pants

    When it comes to the kind of fees that can really eat into your rewards, SmartyPig’s MasterCard Cash Rewards Card has some real advantages. Yes, there is an initial one-time $9.95 charge for the card. But after that, all PIN and POS signature purchase transactions are free. ATM transactions still have fees, but there are no monthly fees AND NO purchase transaction fees.

    You have to opt-in to SmartyPig’s rewards program but once you do you will receive an exclusive, reloadable card and can use it everywhere MasterCard is accepted. The reward: SmartyPig makes it very simple and gives you a flat 1% back on all purchases. You can deposit the cash boost into a SmartyPig goal – which allows you to put away money for a specific goal – or keep it on your card. For more information about the SmartyPig savings program, see the Smarty Pig overview page.

     

     

  • Pros and Cons of Prepaid Debit Cards

    Pros and Cons of Prepaid Debit Cards

    Don’t believe the hype about prepaid cards. But don’t believe the doomsayers, either

    We live in a world of incessant hyperbole. The latest version of the iPhone? Best invention ever. The current members of Congress? The most corrupt and feckless in history. And let’s face it, advertising and promotion is based largely on inflated claims such as these, and that includes the efforts companies use to pump up interest in prepaid debit cards. To hear card issuers describe them, prepaid cards are the most convenient, reliable and safe financial products ever conceived. But that is, of course, hyperbole. The truth involves a great deal more nuance. There are, in fact, some real benefits, especially for people who don’t have or can’t get traditional credit cards. There are also significant red flags with prepaid cards, ones that any consumer should be aware of. So all hyperbole aside, let’s take a look at a few of the good, bad and ugly qualities of prepaid cards.

    The Upside

    • Easy, easy, easy. One of the main reasons people carry around credit and debit cards in their wallets is because it’s so darn easy to use them. Accepted virtually everywhere – at restaurants, shopping malls and even parking meters – plastic is simply more handy than cash. Prepaid debit cards provide that same convenience, including being able to get cash when you have to have it from ATMs all around the world.
    • Under your management. With features like online account management and email alerts when you’re close to exhausting your available funds, prepaid cards give you easy control over how you spend your money. They’re also simple to replenish via direct deposit or by using a credit or debit card.
    • Web ready. Try logging on to Amazon and buying a book or DVD with cash. Uh, it doesn’t work. Online retailing is exclusively the domain of those who have plastic. Thankfully for those who don’t have a credit card, prepaid cards can be your portal to online purchases.
    • Safety first. There’s no need to walk around with large wads of cash when you have a prepaid debit card. Importantly, and unlike cash, losing your card doesn’t mean the money is gone forever, especially if you report the loss immediately.
    • A snap to get. Unlike credit cards, there’s no credit check if you apply for a prepaid card. Just sign up, fund the card and go.

    The Downside

    Just like any other means of payment, prepaid debit cards possess a number of disadvantages. Here are a few.

    • Fees, fees, fees. Although they vary from card to card, fees are inevitable. Whether it’s a monthly account maintenance charge or getting dinged to withdraw money from an ATM or even to add cash to your card, there’s no way around at least some fees. And if you use your card a lot and its fees are onerous, that amount can pile up quick. Which is why being a savvy, conscientious comparison shopper is vital.
    • Not earning credit. One of the main reasons consumers gravitate towards prepaid cards is because they can’t get a credit card. But relying on a prepaid card will do nothing to help you build the sort of credit history you need to eventually get one. Since the money to fund a prepaid card is, by definition, given upfront, there are no repayments and hence nothing to report to the credit bureaus that track that behavior. If you want to build credit, look into a secured credit card.
    • Not yet ubiquitous. Even though prepaid cards are gaining in popularity, they are not yet universally accepted at all stores. It’s always best to check with a merchant before you make a shopping trip.

  • Prepaid Visa Debit Cards

    Prepaid Visa Debit Cards

    Prepaid Visa Debit Cards are pre-funded reloadable cards that display the Visa logo.  They can be used anywhere the Visa Card is accepted worldwide and online.  As with any debit card, The Visa Prepaid Debit Card requires a deposit in advance before use, after which, the card can be used until the balance is depleted and reloaded.

    Visa Prepaid Debit Cards require no credit check or approval process and you don’t need a bank account to get one.  In fact, many of them are associated with a routing and checking account number to allow the user to receive direct deposits, saving you time and money with check cashing fees.  Adding to the benefits, many offer Purchase Protection as well as the ability to pay your bills online.

    The user can escape expensive overdraft fees, bill payment fees and check cashing fees, which can add up quickly.  The Visa Prepaid Debit Card is not only convenient, but it keeps your funds secure while still allowing you access to your money at all times.

    We invite you to visit our review section for more information and to find out which card is right for you.

Prepaid Debit Card Reviews, Complaints, Etc