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Get a Prepaid Debit Card

Prepaid debit card

How do I get a prepaid debit card?

How do you access your paycheck, social security check, or other regular payments? If you're using a check cashing service, chances are you're paying high fees that are eating into the money you need to pay your bills. Bank accounts are often no better, with more and more banks piling fees on top of fees for checking and savings accounts.

Many people that cannot set up a bank account because they have had consumer debt issues in the past turn to check cashing services at retailers because they believe it is their only alternative. The problem is that these merchants typically charge a 2% to 3% service charge. Assuming you receive a weekly paycheck of $400, this fee can add up to $624 every year! It may seem like a small fee each week, but clearly that fee adds up.

Someone eligible to open a checking account may think that bank accounts are a better choice for check cashing. However, recent legislature limiting banks from charging for some services have prompted them to make up the money elsewhere; specifically, by raising routine fees and adding new fees to routine services. Some banks are now charging transaction fees, monthly fees, and even check cashing fees if the customer does not use direct deposit or keep a minimum balance. The average cost of a checking account is now over $200 per year, partially due to hefty fees charged under so-called "overdraft protection."

There is a cheaper, more convenient alternative to checking cashing services and bank accounts: a prepaid debt card. With a prepaid card, there is no bank account necessary, so even those with consumer debit problems can have a card. Shopping around for a prepaid card with the lowest fee can mean a fee as low as $6 per month, or $72 per year. This is almost a third of the cost of many bank accounts, and about 10% of the cost of check cashing services.

Another benefit of a prepaid debit card is that they almost always carry the logo of one of the major credit card brands, making a prepaid card accepted anywhere that brand is accepted. For those that cannot open a traditional bank account, and cannot qualify for a credit card, prepaid cards offer a way to make purchases online or from retailers that only accept credit cards.

Keeping the cost of a prepaid card down is fairly simple, while check cashing services will never offer lower costs and bank accounts typically charge many fees that add up. To keep a prepaid debit card cost effective, signing up for a direct deposit program with many prepaid issuers will lower costs as these card companies might offer an incentive of lower fees for those having a regularly scheduled direct deposit.

Before taking another check to a check cashing service location, consider the money that you're throwing away with high fees. When each dollar counts, choosing a prepaid card over a check cashing service or even traditional bank accounts means more money to pay bills, and maybe even money left over for a vacation or other "extras."

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