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 did not have standard 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 individuals paid these rates merely because there are no conventional banks positioned in their community.
Enter the prepaid debit card. Each Mastercard and Visa have prepaid debit programs which have significant advantages over the traditional check cashing shop. Probably the biggest advantage shouldn’t be having to hold around cash. If 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 it is advisable make purchases at a store, online, or get cash out of an ATM. Funding your card will be performed by direct deposit or by reloading the card at one in every of thousands of stores that provide the service. There is no such thing as a need to hold around more cash than you need. Because the debit card is using your own cash and isn’t a credit card, there typically isn’t any credit check and most persons are approved on-line immediately. Because there isn’t any credit check there isn’t a inquiry recorded in your credit report.
While carrying a debit card is safer than carrying money, there’s 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 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 is not reported for 60 days, then there isn’t a protection and your account could possibly be wiped out. The big difference here is if you’re disputing a fraudulent credit card charge, you aren’t out of money. If you happen to report a fraudulent use of your debit card, the bank might take 10 days to analyze which means you’re out that unauthorized use for over a week.
So how do these cards make cash for the issuers? If you’re thinking about using a debit card, make positive you careabsolutely read the phrases and conditions and charge schedule. There are many programs available on the internet they usually all have completely different charge schedules and features. Look for a card that does not cost you to reload in case you use direct deposit. Look for a card that may assist you to see your balance on-line or via telephone without a charge. If you shop carefully, you will definitely save money compared to the check cashing shops.
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