Prepaid debit cards are making a dent within the check cashing business. For years check cashing shops have served that part of the financial market that didn’t have typical bank accounts. Pay checks, government checks and personal checks are all cashed for a payment that may range from 1.5% to 10% of the face value of the check. Typically individuals paid these rates merely because there are not any conventional banks positioned in their community.
Enter the prepaid debit card. Each Mastercard and Visa have prepaid debit programs that have significant advantages over the traditional check cashing shop. Probably the biggest advantage is not having to hold round cash. When you’ve got just cashed your weekly or bi-weekly paycheck, what do you do with the cash? Carry it on you? Hide it someplace at home?
With the prepaid debit card, your deposit is recorded and the card is the only thing it’s good to make purchases at a store, on-line, or get money out of an ATM. Funding your card can be finished by direct deposit or by reloading the card at one in all hundreds of stores that provide the service. There is no need to carry round more money than you need. Because the debit card is using your own money and isn’t a credit card, there typically isn’t any credit check and most individuals are approved on-line immediately. Because there isn’t a credit check there isn’t any inquiry recorded on your credit report.
While carrying a debit card is safer than carrying money, there’s a downside when it involves liability. Unlike a credit card which limits your liability for fraudulent use or broken or undelivered merchandise to $50, the debit card has stricter requirements. The card person must report the lack of his card or suspicion that the card has been compromised within 2 days of the event to limit his liability to $50. If the loss is reported after 2 days the liability jumps to $500. If the loss just isn’t reported for 60 days, then there is no protection and your account may very well be wiped out. The big distinction right here is if you are disputing a fraudulent credit card cost, you are not out of money. For those who report a fraudulent use of your debit card, the bank may take 10 days to investigate that means you might be out that unauthorized use for over a week.
So how do these cards make money for the issuers? If you’re thinking about using a debit card, make certain you careabsolutely read the phrases and conditions and price schedule. There are many programs available on the internet they usually all have totally different payment schedules and features. Look for a card that doesn’t charge you to reload if you use direct deposit. Look for a card that may mean you can see your balance online or through telephone without a charge. Should you shop carefully, you’ll definitely get monetary savings compared to the check cashing shops.
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