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Prepaid Debit Cards
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, authorities checks and personal checks are all cashed for a payment that may range from 1.5% to 10% of the face worth of the check. Typically people paid these rates merely because there are no standard banks located of 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 just not 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 you might want to make purchases at a store, on-line, or get cash out of an ATM. Funding your card will be completed by direct deposit or by reloading the card at one of hundreds of stores that provide the service. There isn't any need to hold round more cash than you need. Because the debit card is using your own cash and isn't a credit card, there typically is not any credit check and most persons are approved on-line immediately. Because there is no such thing as a credit check there isn't a inquiry recorded on 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 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 just isn't reported for 60 days, then there isn't any protection and your account may very well be wiped out. The big distinction here is if you are disputing a fraudulent credit card cost, you aren't out of money. Should you report a fraudulent use of your debit card, the bank may take 10 days to investigate meaning you are out that unauthorized use for over a week.
So how do these cards make money for the issuers? If you are thinking about utilizing a debit card, make positive you careabsolutely read the phrases and conditions and payment schedule. There are many programs available on the internet they usually all have totally different payment schedules and features. Look for a card that doesn't charge you to reload if you happen to use direct deposit. Look for a card that may let you see your balance on-line or through telephone without a charge. For those who shop careabsolutely, you will definitely lower your expenses compared to the check cashing shops.
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