Prepaid Credit Card
Prepaid Cards Help Some Manage Money
Terri Gruca
Reporting
(WCCO) A new kind of prepaid card is gaining popularity to help people who have no real credit history and people who want to control their spending.
Construction worker Matthew Goodrum said his hard-earned cash flies out of his hands the minute he cashes his paycheck.
"I get the money," Goodrum said. "I'm going to spend it because it's accessible."
To help stop the financial bleed, Goodrum decided to try a reloadable, prepaid debit card. It looks just like a traditional debit card, but it is not linked to a bank account.
His limit is based on the amount of money he loads onto the card.
"I can use it just like a credit card, pay my bills," Goodrum said.
The prepaid cards can be used anywhere debit or credit cards are accepted.
"It becomes an easier way for you to carry your money," said Bertrand Sosa with NetSpend.
The cards are issued by banks and private companies and Sosa said that type of plastic is becoming a popular way to set limits.
"There are people that are buying it because they want to give it to their teens, their kids in college," Sosa said. "There are people that are buying a prepaid debit card for controlling their spending."
The prepaid cards are branded with Visa and MasterCard logos and carry the same protections as traditional debit and credit cards.
The cards can be picked up and loaded at a variety of retail and financial locations nationwide.
"So if you bought a card in say, Austin, Texas, and you're traveling to California, most likely, there's a convenient location near you in that state," Sosa said.
While the prepaid cards may be convenient, Gail Hillebrand with Consumers Union warns, the fees tacked on can really add up.
"You're going to pay to get that card or you're going to pay every month to hold it and you're going to pay when you use it," Hillebrand said.
Fees vary depending on the company and the plan you choose. Goodrum paid $9.95 to activate his card and shells out another $9.95 every month for unlimited transactions. There may also be reload fees, ATM fees and postage fees, so it is important to do your homework.
"If you do qualify for a bank account, you might compare the cost of this product to the cost of a bank account and see how much it's going to cost you," HIllebrand said.
For those who don't qualify for a bank account, like Goodrum, a prepaid debit card can be a cheap and easy solution.
"Everybody I know pretty much uses them because it's convenient," Goodrum said.
Reloading the cards is easy. Consumers go to an authorized location, give the cashier their card and the money to put on it. The cashier swipes the card and the consumer is out the door.
(© MMVI, CBS Broadcasting Inc. All Rights Reserved.)
posted by News at 3:47 AM
Terri Gruca
Reporting
(WCCO) A new kind of prepaid card is gaining popularity to help people who have no real credit history and people who want to control their spending.
Construction worker Matthew Goodrum said his hard-earned cash flies out of his hands the minute he cashes his paycheck.
"I get the money," Goodrum said. "I'm going to spend it because it's accessible."
To help stop the financial bleed, Goodrum decided to try a reloadable, prepaid debit card. It looks just like a traditional debit card, but it is not linked to a bank account.
His limit is based on the amount of money he loads onto the card.
"I can use it just like a credit card, pay my bills," Goodrum said.
The prepaid cards can be used anywhere debit or credit cards are accepted.
"It becomes an easier way for you to carry your money," said Bertrand Sosa with NetSpend.
The cards are issued by banks and private companies and Sosa said that type of plastic is becoming a popular way to set limits.
"There are people that are buying it because they want to give it to their teens, their kids in college," Sosa said. "There are people that are buying a prepaid debit card for controlling their spending."
The prepaid cards are branded with Visa and MasterCard logos and carry the same protections as traditional debit and credit cards.
The cards can be picked up and loaded at a variety of retail and financial locations nationwide.
"So if you bought a card in say, Austin, Texas, and you're traveling to California, most likely, there's a convenient location near you in that state," Sosa said.
While the prepaid cards may be convenient, Gail Hillebrand with Consumers Union warns, the fees tacked on can really add up.
"You're going to pay to get that card or you're going to pay every month to hold it and you're going to pay when you use it," Hillebrand said.
Fees vary depending on the company and the plan you choose. Goodrum paid $9.95 to activate his card and shells out another $9.95 every month for unlimited transactions. There may also be reload fees, ATM fees and postage fees, so it is important to do your homework.
"If you do qualify for a bank account, you might compare the cost of this product to the cost of a bank account and see how much it's going to cost you," HIllebrand said.
For those who don't qualify for a bank account, like Goodrum, a prepaid debit card can be a cheap and easy solution.
"Everybody I know pretty much uses them because it's convenient," Goodrum said.
Reloading the cards is easy. Consumers go to an authorized location, give the cashier their card and the money to put on it. The cashier swipes the card and the consumer is out the door.
(© MMVI, CBS Broadcasting Inc. All Rights Reserved.)
posted by News at 3:47 AM
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