Similar to Pay Day loans, some companies tout early paydays and convenience to rob consumers through predatory fees
With the majority of the world’s population working or going to school and translating into not enough free time, and the ease of doing nearly everything online, it has become more convenient to carry a debit or credit card than cash. And as credit and debit cards can be cancelled at a moment’s notice most consumer’s find them safer than carrying cash. It was bound to happen that banks would come up with re-loadable debit cards set up to legally scam consumers.
Some re-loadable debit card companies are similar to payday loans
Like Pay Day loan companies, re-loadable debit cards can be attractive to persons without a bank account, on Social Security and SSI, who get paid once or twice a month, need their pay early, or students working part time, banks supplying re-loadable debit cards to Net Spend, Green Dot and other shady companies fail to tell consumers they have to get a certain number of people signed up before they get kick backs, that fees are exorbitant , or that it is often impossible to get refunds on purchasers from retailers or the debit card companies. Many Pay Day lenders like Speedy cash have their own version of re-loadable debit cards with high fees, as well.
The negative side of re-loadable and prepaid debit cards
Although cards like Net spend, Green Dot, Money Pack, and others can be good for people who have trouble sticking to a budget and who don’t trust themselves to not over spend, the negatives far outweigh the positives. Net Spend and Green Dot offer an opportunity for consumers to get pay checks early by having the money pre-deposited, but they charge $5.00 to do so. Each and every time cards are used for direct or online purchases, or to even do a balance check on the card website consumers have $1–$3 in transaction fees taken off the card as well on top of a monthly fee of up to $6.95 each time more money is added to the card. This can take a big chunk of money in a month’s time.
Walmart has its own money card. Once the card is paid for, there is a $5.00 charge to load money on it the first time money is added, $3.95 each time additional funds are added. For persons who are determined to use re-loadable debit or prepaid debit cards, Pay Pal’s is the best out there. Pay Pal cards come in varying amounts with no additional fee to purchase one and only a $5.95 at the beginning of each month. They do not charge fees on purchases.
Secured prepaid Debit Cards issued by bank or credit unions
Consumers can’t build credit or establish a positive payment history with cards like Green Dot, Net Spend, Money Pak or a Walmart prepaid and re-loadable debit card. That can only be done by a secured debit or credit card issued directly by a bank. A growing number of utility, internet and cell phone companies, or satellite and cable TV services will not accept prepaid or re-loadable debit cards because there is no way to extract a late fee or garnish the holder’s wages as they are not connected to anything and the company would be out the money.
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