Prepaid Debit Cards Take A Bite Out Of Check Cashing Shops Prepaid Debit Cards Versus Check Cashing Services Visa Card Without Good Credit Mastercard Card For Bad Credit
1:22 AM
Check cashing stores are feeling the bite as more and more of their customers are opting for prepaid debit cards to do their banking. For years the only financial service available to a large segment of the population that is not serviced by traditional banks, was to pay between 1.5% to a whopping 10% of their check simply to have it cashed. Now a new, more convenient and less expensive option is available thanks to the prepaid debit card.
Leading the way with this new financial tool is Visa and Mastercard. Both have prepaid programs that they have licensed out to a number of vendors. Aside from the convenience of the card, using the debit card also has the advantage of not requiring the customer to carry their entire paycheck around in cash. The card is "reloaded" either by direct deposit or through a network of retail outlets. If the customer needs cash they simply withdraw it from one of millions of ATMs that accept Visa or Mastercard.
People who had relied on check cashing services had to physically go to the store to have their checks cashed. The debit card can be reloaded via direct deposit or through a broad network of retail outlets like Wetern Union making the weekly or bi-weekly trek to the cash checking shop unnecessary. With the debit card the consumer has greater control on how his money is both deposited and spent.
While the debit card looks and shops like a credit card it isn't. The card's "limit" is the amount of money you put in the account. Because it is not a "credit card" there is no credit check and virtually everyone who applies is approved. Also, because there is no credit check, there is no inquiry on your credit report.
While carrying a debit card is safer than carrying cash, there is 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 user must report the loss 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 is not reported for 60 days, then there is no protection and your account could be wiped out.
If you have a fraudulant charge on a credit card, the credit card company investigates and the worse that can happen is your credit limit is temporarily reduced by the amount of the charge in question. With a debit card, the money taken came directly out of your cash account. The bank may take up to 10 days to do their investigation and you are out the money for that length of time.
Debit cards provide a lot more services than a cash checking store and if you are careful in your selection, you will definitely pay less than you did paying for your check to be cashed. If you are considering a debit card, carefully read the fee schedule and the terms and conditions first. With some careful shopping you can carry your "bank" around in your pocket and enjoy much more flexibility with your financial dealings.
Leading the way with this new financial tool is Visa and Mastercard. Both have prepaid programs that they have licensed out to a number of vendors. Aside from the convenience of the card, using the debit card also has the advantage of not requiring the customer to carry their entire paycheck around in cash. The card is "reloaded" either by direct deposit or through a network of retail outlets. If the customer needs cash they simply withdraw it from one of millions of ATMs that accept Visa or Mastercard.
People who had relied on check cashing services had to physically go to the store to have their checks cashed. The debit card can be reloaded via direct deposit or through a broad network of retail outlets like Wetern Union making the weekly or bi-weekly trek to the cash checking shop unnecessary. With the debit card the consumer has greater control on how his money is both deposited and spent.
While the debit card looks and shops like a credit card it isn't. The card's "limit" is the amount of money you put in the account. Because it is not a "credit card" there is no credit check and virtually everyone who applies is approved. Also, because there is no credit check, there is no inquiry on your credit report.
While carrying a debit card is safer than carrying cash, there is 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 user must report the loss 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 is not reported for 60 days, then there is no protection and your account could be wiped out.
If you have a fraudulant charge on a credit card, the credit card company investigates and the worse that can happen is your credit limit is temporarily reduced by the amount of the charge in question. With a debit card, the money taken came directly out of your cash account. The bank may take up to 10 days to do their investigation and you are out the money for that length of time.
Debit cards provide a lot more services than a cash checking store and if you are careful in your selection, you will definitely pay less than you did paying for your check to be cashed. If you are considering a debit card, carefully read the fee schedule and the terms and conditions first. With some careful shopping you can carry your "bank" around in your pocket and enjoy much more flexibility with your financial dealings.
About the Author:
Chris A Smith reports on the trends in the personal creditindustry including alternative banking products, bankruptcy, credit rebuilding and laws regarding personal credit. You can see all of his articles and videos at the popular site TryCreditFix
You can leave a response, or trackback from your own site.