Prepaid Debit CardsPrepaid 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 did not have standard 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 value of the check. Typically people paid these rates simply because there aren't any conventional banks located 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. If in case 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 house?
With the prepaid debit card, your deposit is recorded and the card is the only thing you might want to make purchases at a store, online, or get cash out of an ATM. Funding your card can be finished by direct deposit or by reloading the card at one in every of 1000's of stores that provide the service. There isn't a need to hold round more cash than you need. Because the debit card is utilizing your own money and is not a credit card, there typically is not any credit check and most persons are approved on-line immediately. Because there is no 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 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 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 is just not reported for 60 days, then there isn't any protection and your account could possibly be wiped out. The big distinction right here is if you're disputing a fraudulent credit card charge, you are not out of money. For those who report a fraudulent use of your debit card, the bank might take 10 days to investigate that means you are out that unauthorized use for over a week.
So how do these cards make money for the issuers? In case you are thinking about utilizing a debit card, make certain you carefully read the terms and conditions and charge schedule. There are lots of programs available on the internet and so they all have completely different price schedules and features. Look for a card that does not charge you to reload in the event you use direct deposit. Look for a card that will mean you can see your balance on-line or through telephone without a charge. For those who shop carefully, you will definitely get monetary savings compared to the check cashing shops.
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