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A Pre-paid debit card is a reload able, stored value
card similar to a gift or payroll card. Prepaid Debit cards look
like credit cards but act like debit cards, and can substitute for
cash for everyday purchases such as groceries, small consumer goods,
restaurant tabs and gasoline.
Proponents of pre-paid cards say they are safer and more convenient
for consumers than carrying cash around, and the costs are lower
than check-cashing and payday lending outlets. They are also
accessible to those with no or very poor credit histories. In fact,
they are ideal for the more than estimated 80 million or so people
in the U.S. who lack basic banking accounts.
Nevertheless, the appeal of these cards transcend the un-bankable
community, and now extends to everyday people who want to take
advantage of Prepaid Debit card benefits.
Pre Paid Debit Cards VS: Checking Accounts
Let's face it; checking accounts have some major benefits. One of
the most commonly used benefits from checking accounts is the direct
deposit feature. For those who do not write checks, but pay their
bills using their check card or debit card, a prepaid debit card may
be a better solution.
They are easy to qualify for, and offer the same direct deposit
feature. Furthermore, many people can not qualify for a checking
account because of a negative ChexSystems report. Therefore, the
Prepaid Debit card offers many of the same benefits of a checking
account, without the hassles.
For the un-banked who obtain a Prepaid Debit Card, the fees charged
at ATMs are lower than those at check-cashing stores, and they are a
safer alternative for employees who cash their checks on payday and
then carry cash until the next one. If a card is lost or stolen,
most issuers have a toll-free number where the card can be reported
and a new one issued, minus a reissue fee. The prepaid card
alternative beats losing your hard earned cash.
Using Prepaid Debit Cards for Internet Shopping
Another reason why many have chosen to use Prepaid Debit cards is
for the sole purpose of online shopping and bill pay. The cards are
ideal for individuals who do not want to use their personal credit
cards to do internet shopping. They can still feel relatively safe
because the Prepaid Debit cards are issued by banks and do not have
the individual's personal information available. They are considered
a safe and effective alternative for everyone who shops over the
internet, even those with a bank account.
Governments now using Pre Paid Debit Cards
One of the largest groups switching to Prepaid Debit Cards is
government entities. Using the cards, government entities can
disperse funds or wages quickly and painlessly to their employees or
the general public. The cards are ideal for recurring transactions,
like unemployment benefits. The cost to reload a card is minimal
compared to sending a check every week. Because of the huge savings,
even the federal government will likely start moving to prepaid
cards in the next couple of years.
Think about how many Veterans, Social Security, and Medicare checks
they mail each year. Transferring those payments onto a Pre Paid
debit card will save the government tons of money and benefit the
recipients as well. Prepaid Debit Cards over Credit Cards. Finally,
Americans are getting a grip on their trillion-dollar credit card
debt.
This is evident by the fact that debit card usage outpaced credit
card usage in 2006, which means the credit card companies didn't
make as much money as they did in 2005.
Many people are wising up to the schemes of credit card companies,
with their fluctuating interest rates. People are increasingly
opting for the ease and convenience of a Prepaid Card, which uses
pre-loaded funds and does not get them in more debt.
With a
Prepaid debit card, you can budget your money, and actually
reduce your expenses instead of increasing your debt with credit
cards. Then take the money you used to give to credit card companies
and invest it. If you saved only $100 a month and invested it in an
8% investment over the course of your working life you would recover
over $146,812 imagine if you recovered an extra $300 a month.
A prepaid debit card that
issues almost 100% to people on chexsystems is, is
account now which is an FDIC
insured Visa affiliate.
Perry
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