If you need a cashless way to pay money without opening a bank account, all you have to do is get a re-loadable prepaid debit card. The process is as easy as buying an item off a store. Unlike a regular credit card which charges an interest rate, a debit card is prepaid so it's interest-free.
However, before getting one, consumers are advised to spend time examining their choices. Take note that there are also fees associated with prepaid debit cards. If you're not careful, you could get stuck with a card that has even more fees than you expected. What are prepaid debit card fees that you should know about?
Basic Fees Associated with Prepaid Cards
Activation Fee. An activation fee is required before you can use your debit card. However, activation fees can range from as low as $9 to as much as $100 so you should choose one with a reasonable cost.
Negative Balance Fees. Holders of debit cards are not allowed to overdraw but there are times when your bill can be a little over your available balance but your transaction will still be accepted. In this case, you will be charged with an additional cost known as the negative balance fee.
Decline Fees. Generally, overdraws are not allowed so your transaction will be declined if you try to pay with your debit card without sufficient cash in your account. Watch out! That failed transaction may still cost you a decline charge.
Daily Limit Fees. Some re-loadable prepaid debit cards impose a limit on how much you can charge to your card per day. If you try to make a large purchase that exceeds that daily limit, you can be charged with a fee.
Cash Advance Charges. Debit cards allow the option to borrow cash from your account using the ATM. However, you will incur a cash advance fee especially if you use an ATM, not affiliated with your Issuer.
Reloading Fees. Reloading your prepaid card by making a direct deposit can be free of charge. However, if you try to reload your account through a third party service, you can be charged with a reloading fee.
Additional Charges. Sometimes, there are gas stations, restaurants, hotels and car rental companies that will impose a "hold" or extra charge on your bill when you make your payment.
ATM Balance inquiry. Some issuers will charge a balance inquiry fee of $1 or less when you check your balance from the ATM.
Maintenance Fees. Some Issuers will charge a regular fee each month, aside from the annual cost.
Inactivity Charge. You may also get penalized if you do not use your debit card for more than 60 days.
Customer service Fee. Not all debit card Issuers offer customer service for free. Some Issuers may charge you a cost for calling assistance.
Transaction Charges. You may incur a minimal fee each time you use your debit card for payment.
Account termination fee. If you want to close your account, a termination fee can be deducted from your available balance as well.
Card replacement. In you lose your card you will be asked a fee for a replacement.
Card renewal. Prepaid cards expire after a certain period. Afterwards, you will be charged a fee for the renewal of your card.
However, before getting one, consumers are advised to spend time examining their choices. Take note that there are also fees associated with prepaid debit cards. If you're not careful, you could get stuck with a card that has even more fees than you expected. What are prepaid debit card fees that you should know about?
Basic Fees Associated with Prepaid Cards
Activation Fee. An activation fee is required before you can use your debit card. However, activation fees can range from as low as $9 to as much as $100 so you should choose one with a reasonable cost.
Negative Balance Fees. Holders of debit cards are not allowed to overdraw but there are times when your bill can be a little over your available balance but your transaction will still be accepted. In this case, you will be charged with an additional cost known as the negative balance fee.
Decline Fees. Generally, overdraws are not allowed so your transaction will be declined if you try to pay with your debit card without sufficient cash in your account. Watch out! That failed transaction may still cost you a decline charge.
Daily Limit Fees. Some re-loadable prepaid debit cards impose a limit on how much you can charge to your card per day. If you try to make a large purchase that exceeds that daily limit, you can be charged with a fee.
Cash Advance Charges. Debit cards allow the option to borrow cash from your account using the ATM. However, you will incur a cash advance fee especially if you use an ATM, not affiliated with your Issuer.
Reloading Fees. Reloading your prepaid card by making a direct deposit can be free of charge. However, if you try to reload your account through a third party service, you can be charged with a reloading fee.
Additional Charges. Sometimes, there are gas stations, restaurants, hotels and car rental companies that will impose a "hold" or extra charge on your bill when you make your payment.
ATM Balance inquiry. Some issuers will charge a balance inquiry fee of $1 or less when you check your balance from the ATM.
Maintenance Fees. Some Issuers will charge a regular fee each month, aside from the annual cost.
Inactivity Charge. You may also get penalized if you do not use your debit card for more than 60 days.
Customer service Fee. Not all debit card Issuers offer customer service for free. Some Issuers may charge you a cost for calling assistance.
Transaction Charges. You may incur a minimal fee each time you use your debit card for payment.
Account termination fee. If you want to close your account, a termination fee can be deducted from your available balance as well.
Card replacement. In you lose your card you will be asked a fee for a replacement.
Card renewal. Prepaid cards expire after a certain period. Afterwards, you will be charged a fee for the renewal of your card.
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