Prepaid Debit Cards - Pros and Cons
Prepaid debit cards are heavily advertised on television, radio, newspaper and all of the media one can imagine.
Of course there is the counterpart of master card.
If you are planning to sign up for one of these cards, you should really check out the pros and cons of the whole system.
In this article I shall briefly outline the benefits and draw backs so that you can make an intelligent decision.
In most cases when you see the ads you will notice that these ads have the picture of a person jumping in the air denoting that they have found some great benefits by getting their prepaid card.
So let's look at what these benefits are and see if they are for you.
1.
If you can't get a bank account because of past mistakes then getting one of these cards surely cancels the bank's penalization.
It's simple as that.
Of course there are many banks that will give you the opportunity to open a new account regardless of your past mistakes but they are hard to find and in most cases they might not be located in your area.
2.
You have fast access to your money just as when you had a debit card from your previous bank account.
So no matter where you are in the world, as long as it has a visa or master card logo then you are pretty safe.
3.
You eliminate overdraft fees because in the first place you are not allowed this feature.
It's a debit card, not a credit card or checking account.
4.
Of course you do not get checks with these prepaid cards because it's really not a checking account.
So the benefit here is no bounce checks.
5.
You are allowed to make as much deposits as you wish and usually there will be a location in your area where you can make the deposit.
6.
In very many cases you are allowed to have zero balance and still have the card for future deposits.
The zero balance does not cancel your card 7.
And finally you can rest assured that your application will not be turned down.
The above listed benefits may look shiny and attractive; but remember all that glitters is not gold.
Let's take a look at some of the contra details that you should take into consideration before you get one of these prepaid debit cards.
1.
Although in most cases there are no application fees, the very first thing that confronts you is the deposit fees for deposits after your first one.
These fees can range from $1.
50 to $3.
00 depending on which company to which you apply for the card.
Those fees are really maintenance costs but they surely add up especially if you don't have a lot of cash to deposit.
2.
If you ever have to use an ATM to get fast cash, then be prepared to pay the ATM fees which are separate from the deposit fees mentioned above.
ATM fees can range from $1.
50 to $3.
50 just like the deposit fees depending on which ATM you use.
Let's do a little math to see how this can negative affect you.
If you only have $50.
00 to deposit and your deposit fee is $1.
50 then you know that after making your deposit your account balance will be $48.
50.
You now need to withdraw $20 from an ATM.
Calculating with the minimum ATM fees and adding the previous deposit fees, you balance would now be $27.
00.
This calculation is however based on the minimum fees that can accompany your debit card.
Do the math for the higher fees and you will quickly notice the diminishing effect it has on your hard-earned cash.
3.
Let's look at another part of the fee frenzy.
Some of these prepaid debit cards have what is called a monthly non-activity fee.
If you do not use your card for a month you could be charged up to $9.
50.
Again this depends on where you got your card.
Now subtract that from the last fifty dollars that you deposited last month see how much you have in your account.
4.
Prepaid debit cards do nothing for your credit because they are not credit cards.
So don't even think credit repairs using any form of debit cards.
There are more pros and cons that I could not mention in this article because of the lack of space and time.
However surely you can use the information here to help make an intelligent decision when thinking of getting a prepaid debit card.
Of course there is the counterpart of master card.
If you are planning to sign up for one of these cards, you should really check out the pros and cons of the whole system.
In this article I shall briefly outline the benefits and draw backs so that you can make an intelligent decision.
In most cases when you see the ads you will notice that these ads have the picture of a person jumping in the air denoting that they have found some great benefits by getting their prepaid card.
So let's look at what these benefits are and see if they are for you.
1.
If you can't get a bank account because of past mistakes then getting one of these cards surely cancels the bank's penalization.
It's simple as that.
Of course there are many banks that will give you the opportunity to open a new account regardless of your past mistakes but they are hard to find and in most cases they might not be located in your area.
2.
You have fast access to your money just as when you had a debit card from your previous bank account.
So no matter where you are in the world, as long as it has a visa or master card logo then you are pretty safe.
3.
You eliminate overdraft fees because in the first place you are not allowed this feature.
It's a debit card, not a credit card or checking account.
4.
Of course you do not get checks with these prepaid cards because it's really not a checking account.
So the benefit here is no bounce checks.
5.
You are allowed to make as much deposits as you wish and usually there will be a location in your area where you can make the deposit.
6.
In very many cases you are allowed to have zero balance and still have the card for future deposits.
The zero balance does not cancel your card 7.
And finally you can rest assured that your application will not be turned down.
The above listed benefits may look shiny and attractive; but remember all that glitters is not gold.
Let's take a look at some of the contra details that you should take into consideration before you get one of these prepaid debit cards.
1.
Although in most cases there are no application fees, the very first thing that confronts you is the deposit fees for deposits after your first one.
These fees can range from $1.
50 to $3.
00 depending on which company to which you apply for the card.
Those fees are really maintenance costs but they surely add up especially if you don't have a lot of cash to deposit.
2.
If you ever have to use an ATM to get fast cash, then be prepared to pay the ATM fees which are separate from the deposit fees mentioned above.
ATM fees can range from $1.
50 to $3.
50 just like the deposit fees depending on which ATM you use.
Let's do a little math to see how this can negative affect you.
If you only have $50.
00 to deposit and your deposit fee is $1.
50 then you know that after making your deposit your account balance will be $48.
50.
You now need to withdraw $20 from an ATM.
Calculating with the minimum ATM fees and adding the previous deposit fees, you balance would now be $27.
00.
This calculation is however based on the minimum fees that can accompany your debit card.
Do the math for the higher fees and you will quickly notice the diminishing effect it has on your hard-earned cash.
3.
Let's look at another part of the fee frenzy.
Some of these prepaid debit cards have what is called a monthly non-activity fee.
If you do not use your card for a month you could be charged up to $9.
50.
Again this depends on where you got your card.
Now subtract that from the last fifty dollars that you deposited last month see how much you have in your account.
4.
Prepaid debit cards do nothing for your credit because they are not credit cards.
So don't even think credit repairs using any form of debit cards.
There are more pros and cons that I could not mention in this article because of the lack of space and time.
However surely you can use the information here to help make an intelligent decision when thinking of getting a prepaid debit card.
Source...