Prepaid debit cards are making a dent within the check cashing business. For years check cashing shops have served that part of the monetary market that didn’t have conventional bank accounts. Pay checks, government checks and personal checks are all cashed for a fee that can range from 1.5% to 10% of the face worth of the check. Typically people paid these rates merely because there aren’t any standard banks situated 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 isn’t having to carry round cash. When you have just cashed your weekly or bi-weekly paycheck, what do you do with the cash? Carry it on you? Hide it someplace at residence?
With the prepaid debit card, your deposit is recorded and the card is the only thing it is advisable to make purchases at a store, on-line, or get money out of an ATM. Funding your card might be executed by direct deposit or by reloading the card at one among hundreds of stores that provide the service. There isn’t a need to hold round more money than you need. Because the debit card is utilizing your own money and is not a credit card, there typically is no credit check and most individuals are approved online immediately. Because there is no credit check there is no such thing as a inquiry recorded on your credit report.
While carrying a debit card is safer than carrying cash, there is 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 user should report the loss of his card or suspicion that the card has been compromised within 2 days of the occasion to limit his liability to $50. If the loss is reported after 2 days the liability jumps to $500. If the loss shouldn’t be reported for 60 days, then there isn’t a protection and your account could be wiped out. The big distinction here is if you are disputing a fraudulent credit card cost, you aren’t out of money. In the event you report a fraudulent use of your debit card, the bank could take 10 days to research that means you are out that unauthorized use for over a week.
So how do these cards make money for the issuers? If you’re thinking about utilizing a debit card, make certain you caretotally read the terms and conditions and fee schedule. There are lots of programs available on the internet they usually all have completely different payment schedules and features. Look for a card that does not charge you to reload should you use direct deposit. Look for a card that can will let you see your balance online or via telephone without a charge. When you shop careabsolutely, you will definitely lower your expenses compared to the check cashing shops.
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