Reloadable Debit Card - Check Out The Benefits!
What is a reloadable debit card? In a nutshell, it's
like a credit card
with no credit line, and like a debit card without a bank account.
Hmm...you might be asking yourself: So what exactly does that
mean?! The information here will provide you with
of the answers so that you can understand the benefits that prepaid
debit cards have to offer, and determine
whether it's something that
may meet your financial needs.
A reloadable debit card comes in
different flavors, namely Prepaid Visa debit cards and Prepaid
MasterCard debit cards. They look and act exactly like flagged Debit
only rather than being attached to a bank account, you simply reload
them with cash. It's actually like having a virtual bank
much like replenishing your prepaid wireless phone account, you can buy
special reload cards, and even use direct deposit if you have a bank
Note that unlike prepaid wireless reloads, which often don't
any in-store reload fees (depending on the plan type), a reloadable
debit card almost always has an in-store transaction fee,
ranging from $2.95 to $4.95 per reload. The only way around
fees is typically to use direct payroll deposit that you can setup with
your employer, or transferring money from a bank account. The
good news is, however, that you can
add anywhere from $20 to $400 at any one time (or more), so the more
you add per
transaction, the lower your per dollar reload cost.
Some of the benefits of a
reloadable debit card includes:
- They're accepted worldwide wherever Visa or MasterCard are
- You'll never have bank overdraft fees because transactions
are declined if you have insufficient funds.
can track all of your transactions online (and usually via a smartphone
app), which is good for seeing how
all of those little purchases add up, or to help your children learn
where they're spending their money.
- No credit check is
required (although identification such as a Driver's License and/or
Social Security Number are required to verify identity - this is part
of the Patriot Act requirements).
- If you don't have a credit card, you can take advantage of
all of the services available online that require credit cards!
- It's safer than carrying cash.
to control costs by allowing you to spend only up to the
you add if you can choose to add a certain amount each month to control
your monthly costs.
- Can distribute money to your kids (ex. money for school
expenses or an allowance), and track expenditures online.
- Is FDIC
insured, including zero liability protection against fraudulent use.
In other words, if you lose your card, you can report it
and get a new card issued.
- You can reload your card
with cash at tens of thousands of locations nationwide (actual number
of locations will vary depending on the type of card you have).
Things to look for when
selecting a reloadable debit card:
- You can withdraw cash at millions of ATMs worldwide (though
usually an ATM fee applies).
vs. monthly fees
- Some cards will not have a monthly recurring fee, but will charge you
per transaction, while others will have a monthly fee, but include
unlimited transactions. Depending on your purchase habits,
may have a preference for one versus the other. I personally
to have a monthly fee (as low as I can find) so I don't have to worry
about racking up transactions fees, and using the card feels less
stressful when you don't have to think about the extra cost and whether
it's really worth it. There are some free reloadable debit
card options out there now as well that are worth seeking out.
and type of reload locations -
You'll want reloading to be convenient. So check out whether
can reload at places where you already shop. For example, can
buy reload packs at your grocery store? Convenience store?
Pharmacy? Gas station? Walmart?
- Take a look at the fee schedule to see where you'll incur additional
charges. Many won't affect you at all, while others will be
important to you. For example, I rarely have the need to
cash from an ATM, so I wouldn't care about what that fee is.
I do like to transfer money from my bank account, so one that has
minimal or no fees for bank transfers would be ideal for me.
- Some cards will offer points or rewards. Many prepaid
carriers offer bonuses for using a credit card to replenish your phone
(ex. Cricket & Virgin offer a $5 monthly discount for enrolling
in auto pay);
prepaid debit cards count! Other programs will offer rewards
the card itself.
A reloadable debit card has tremendous
value, and is a growing industry that is always adding more and more
features and lower costs. If you have any questions that
covered here, please feel free to Contact
me, and I'll be happy to help answer them!