The Expensive Truth Behind Prepaid Debit Cards
It sounds too good to be true. You don't need a bank account. You don't need a good credit score. You just load your paycheck onto a pre-paid debit card, and you can pay without the hassles of a credit card or the inconvenience of cash.
You've probably started to see pre-paid debit cards in stores - maybe you've even received one as a gift or purchased one for yourself. There's a lot to be said for pre-paid plastic, but unfortunately the old adage pretty much sums it up--if it sounds too good to be true, it probably is. As with bank accounts, regular debit cards and credit cards, banks have found a way to profit from our quest for convenience, according to the New York Times.
How? By charging you for everything under the sun, including activating the card, making purchases, checking your balance, going to the ATM and even just possessing it - it's called a monthly maintenance fee. Banks can also charge you for not using the card - an inactivity fee. As you can imagine, you can lose your money in fees faster than you can spend it.
Of course, I'm not trying to say that prepaid debit cards don't work. Whether they're right for you depends on your individual financial situation. I'm just saying, be on the lookout for hidden fees, just like you should keep your eyes peeled when using credit cards, bank accounts or a debit card tied to an account. No matter what your method of payment, banks are going to try to sneak penalties by you - it's how they stay in business. It's up to you to watch out for your bottom line. Try to identify fees before purchasing a card or applying for an account. And if you find fees that you don't understand, ask your bank about them - and request that they be removed.
In a perfect world, avoiding fees would be easy. But for many of us, debt gets in the way. It prevents us from paying our bills on time, wrecks our credit and often leaves our accounts just empty enough so that we overdraw repeatedly. But it doesn't have to be that way.
Paying down debt can save you money on interest and put more of your own cash into your pockets each month. In turn, you'll have an easier time paying the bills - so you can improve your credit score and get back on track financially.
Bankruptcy is one of the most effective ways to relieve a debt burden. For a plan that suits your needs, sign up for a free one-on-one debt analysis with one of our Atlanta bankruptcy attorneys today. Reducing debt is within your reach - we can help you get there. And that's the truth.