Prepaid debit cards are making a dent in the check cashing business. For years check cashing shops have served that part of the financial market that did not have conventional bank accounts. Pay checks, authorities checks and personal checks are all cashed for a fee that may range from 1.5% to 10% of the face worth of the check. Typically folks paid these rates simply because there are not 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 shouldn’t be having to carry around cash. If you have just cashed your weekly or bi-weekly paycheck, what do you do with the money? Carry it on you? Hide it someplace at dwelling?
With the prepaid debit card, your deposit is recorded and the card is the only thing you should make purchases at a store, on-line, or get cash out of an ATM. Funding your card may be completed by direct deposit or by reloading the card at considered one of hundreds of stores that provide the service. There is no need to hold around more cash than you need. Because the debit card is utilizing your own money and isn’t a credit card, there typically isn’t any credit check and most individuals are approved online 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 cash, 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 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 will not be reported for 60 days, then there is no such thing as a protection and your account might be wiped out. The big distinction right here is if you’re disputing a fraudulent credit card charge, you aren’t out of money. If you report a fraudulent use of your debit card, the bank may take 10 days to analyze meaning 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 sure you careabsolutely read the phrases and conditions and fee schedule. There are numerous programs available on the internet and so they all have totally different charge schedules and features. Look for a card that doesn’t charge you to reload should you use direct deposit. Look for a card that may help you see your balance online or by way of telephone without a charge. If you shop carefully, you will definitely get monetary savings compared to the check cashing shops.
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