Getting a prepaid debit card is easy, there is no question to that.  However, despite the convenience of getting a debit card, consumers must still spend time comparing and shopping around before making a choice.  Why?  Although you don’t have to worry about interest rate fees and late penalty fees, there are other costs that you need to be aware of.

Basic Fees Associated with Prepaid Cards

Activation Fee. Activation fees can range from $9 to as much as $100, depending on the issuer and the type of prepaid card.

Negative Balance Fees. Normally, debit cardholders are not allowed to overdraw.  However, there are cases when your bill can exceed your available balance, and you will be charged with a negative balance fee.

Decline Fees. Since overdraw is not allowed, your transaction will be declined if you try to use your debit card for payment without sufficient balance in your account.  However, you can get penalized with decline charges.

Daily Limit Fees. Some issuers impose a daily limit or a maximum amount of charge per day.  Thus, once you reached that limit, your transaction can still be declined even if you have existing funds in your account.

Cash Advance Charges. You can withdraw cash from your debit account using an ATM.  However, you can also incur cash advance charges.

Reloading Fees. If you reload your debit card by making a direct deposit, no extra fees shall be charged.  However, if you try to reload using other services, you may incur an additional reloading charge.

Additional Charges. Some gas stations, restaurants, hotels and car rental service who accept debit card payment may impose a “hold” or extra charge on your bills.

ATM Balance inquiry. There can be a minimal fee of $1 or less each time you check your balance from the ATM.

Maintenance Fees. Some prepaid card issuers charge a monthly maintenance cost, aside from the yearly activation fee.

Inactivity Charge. You may also get penalized if you fail to use your debit card on any transaction for more than 60 days.

Customer service Fee. Before calling your debit card’s Helpline, make sure that you understand the possible fees you can incur.  Not all issuer provide a free helpline.

Transaction Charges. Most prepaid debit card issuers will charge you an additional cost for each transaction you make- be it offline or online.

Account termination fee. If you want to close out the account, you can be charged with a termination cost as well.

Card replacement. In case of lost, you must pay a fee if you request for a replacement.

Card renewal. Your prepaid card will expire after a certain period (usually three years or longer).  After that period, you will pay an extra fee for requesting a new card.

About the Author

Tara Tiemann is a credit analyst for Go-prepaid.com which has been a resource site for people who want to live debt free. If you are on a budget using prepaid debit cards,prepaid credit cards and prepaid cell phone service can save you big money!

To find the best pre paid credit cards in the market, we need to do research and comparison. Doing research means more than just browsing through the ads.  Let’s talk about tips on how you can make the right prepaid card choice.

Important Factors that Must Influence Your Decision

First, you need to know the factors to look for from a prepaid credit card.  For instance, you need to find a prepaid card that is supported by a major issuer or processing service.  This way, you can be sure that you can use your card for payment or purchases anywhere you are.

Ideally, you want to go with a card that has a Visa or MasterCard logo.  Amex is another popular name in credit cards but there are more merchants and establishments that accept Visa and MasterCard payments.

It is also crucial to make sure that your chosen card imposes no hidden fees or unreasonable costs.  Pre paid credit cards are great because you won’t be charged with interest rates or late penalty fees.  However, prepaid cards do charge a transaction fee each time you swipe the card for payment.  If you’re not careful, you could end up with a credit card that imposes expensive fees.

Check online for prepaid credit card reviews from finance groups and cardholders.  People who have personally used the card often share their views by posting articles or comments on blogs, forums and social community group discussions.

There are prepaid debit cards that also offer rewards.  You may be awarded points each time you use your prepaid card to pay your bills or make purchases.  Points may be equivalent to available credit in your account or may be exchange for merchandise.  If you can find a prepaid card with reward offers, then surely it’s worth considering.

Other factors that you should check on are prepaid credit card features.  Does it allow online banking?  Can you access your account online?  Does it offer 24/7 customer service?  Does it offer fraud protection?

Lastly, you want to choose the issuer that provides credit reporting to the major credit bureaus.  In the past, prepaid credit cards do not report payments to the bureaus so they cannot be used for building credit history.  Today however, there are prepaid credit card issuers that do offer this service.

About the Author

Tara Tiemann is a credit analyst for Go-prepaid.com which has been a resource site for people who want to live debt free. If you are on a budget using prepaid debit cards,prepaid credit cards and prepaid cell phone service can save you big money!

Aside from convenience, the primary purpose of getting a student credit card is to build an early credit history. Nevertheless, instead of building a good credit rating for themselves, many young people found themselves stuck in bad credit due to poor credit card use. If you are thinking about providing your teenager with a credit card but hesitant because of the risk of overspending, why not consider getting a prepaid debit card instead?

The Difference of Credit Cards and Prepaid Cards

Credit cards give its cardholders the freedom to use the card for advanced purchases and pay for them at a later time.  Generally, a credit card comes with a grace period where the cardholder must pay off his/her balances to avoid incurring the interest rate fees.  A credit cardholder may choose to pay off the full balance or submit only the minimum required payment.  However, if a credit cardholder fails to submit any payment on or before the due date, he/she will incur an additional late penalty charge plus interest.

On the other hand, debit cards are prepaid or paid in advance.  In order to use a prepaid debit card for payment, the cardholder must have available funds in the account.  When the funds have been used, a prepaid cardholder must make a new deposit before he/she can use the card for new transactions.

The limits of prepaid debit cards minimize the risk of teenagers falling in the debt trap.  Parents can deposit only a limited amount of cash each month to their teen’s debit account to keep their spending on track.  Furthermore, prepaid cards eliminate additional costs on interest rates and penalty fees.

Prepaid Debit Cards that Build Credit

In the past, only credit cards can be used to build credit history.  Today, there are issuers of prepaid debit cards that include credit reporting services to the major credit bureaus.  Yes, a student can now start building an early credit history using a prepaid debit card.  Use the internet to search for debit card issuers with a credit reporting provision.

Send Allowance Conveniently and Cheaply

Prepaid debit cards are also valuable tools for sending and receiving money.  Prepaid debit card money transfers are really much cheaper than using traditional Wire Money Transfer Services.  Parents can transfer funds to their student’s debit account through online banking without the need to pay transfer service charges.

About the Author

Tara Tiemann is a credit analyst for Go-prepaid.com which has been a resource site for people who want to live debt free. If you are on a budget using prepaid debit cards,prepaid credit cards and prepaid cell phone service can save you big money!