Prepaid debit cards are making a dent in the check cashing business. For years check cashing shops have served that part of the monetary market that didn’t have standard bank accounts. Pay checks, authorities checks and personal checks are all cashed for a charge that may range from 1.5% to 10% of the face value of the check. Typically people paid these rates merely because there aren’t any conventional banks positioned in their community.
Enter the prepaid debit card. Both 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. In case 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 house?
With the prepaid debit card, your deposit is recorded and the card is the only thing you want to make purchases at a store, on-line, or get cash out of an ATM. Funding your card could be completed by direct deposit or by reloading the card at considered one of hundreds of stores that provide the service. There isn’t a want to hold around more cash than you need. Because the debit card is using your own money and is not a credit card, there typically is no credit check and most persons 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 is a downside when it comes to 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 consumer must report the lack 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 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 in case you are disputing a fraudulent credit card cost, you aren’t out of money. For those who report a fraudulent use of your debit card, the bank might take 10 days to research 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 positive you carefully read the terms and conditions and payment schedule. There are a lot of programs available on the internet and so they all have completely different charge schedules and features. Look for a card that does not cost you to reload should you use direct deposit. Look for a card that will permit you to see your balance on-line or by way of telephone without a charge. If you happen to shop careabsolutely, you’ll definitely save money compared to the check cashing shops.
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