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 typical bank accounts. Pay checks, authorities checks and personal checks are all cashed for a charge that can range from 1.5% to 10% of the face value of the check. Typically individuals paid these rates merely because there are not any standard banks situated 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 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 home?
With the prepaid debit card, your deposit is recorded and the card is the only thing it is advisable make purchases at a store, on-line, or get money out of an ATM. Funding your card can be done by direct deposit or by reloading the card at considered one of hundreds of stores that provide the service. There is no such thing as a need to hold round more cash than you need. Because the debit card is utilizing your own cash and isn’t a credit card, there typically is not any credit check and most persons are approved online 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 cash, there is 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 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 just isn’t reported for 60 days, then there is no such thing as a protection and your account could be wiped out. The big difference right here is if you are 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 may take 10 days to research meaning you might be out that unauthorized use for over a week.
So how do these cards make cash for the issuers? If you are thinking about using a debit card, make sure you careabsolutely read the phrases and conditions and charge schedule. There are various programs available on the internet they usually all have totally different fee schedules and features. Look for a card that does not charge you to reload for those who use direct deposit. Look for a card that can help you see your balance on-line or by way of 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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