| Prepaid debit cards are making a dent in the | | | | While carrying a debit card is safer than carrying |
| check cashing business. For years check cashing | | | | cash, there is a downside when it comes to |
| shops have served that part of the financial | | | | liability. Unlike a credit card which limits your liability |
| market that did not have conventional bank | | | | for fraudulent use or broken or undelivered |
| accounts. Pay checks, government checks and | | | | merchandise to $50, the debit card has stricter |
| personal checks are all cashed for a fee that can | | | | requirements. The card user must report the loss |
| range from 1.5% to 10% of the face value of | | | | of his card or suspicion that the card has been |
| the check. Typically people paid these rates simply | | | | compromised within 2 days of the event to limit |
| because there are no conventional banks located | | | | his liability to $50. If the loss is reported after 2 |
| in their community. | | | | days the liability jumps to $500. If the loss is not |
| Enter the prepaid debit card. Both Mastercard and | | | | reported for 60 days, then there is no protection |
| Visa have prepaid debit programs that have | | | | and your account could be wiped out. The big |
| significant advantages over the traditional check | | | | difference here is if you are disputing a fraudulent |
| cashing shop. Probably the biggest advantage is | | | | credit card charge, you are not out of money. If |
| not having to carry around cash. If you have just | | | | you report a fraudulent use of your debit card, |
| cashed your weekly or bi-weekly paycheck, what | | | | the bank could take 10 days to investigate |
| do you do with the cash? Carry it on you? Hide it | | | | meaning you are out that unauthorized use for |
| someplace at home? | | | | over a week. |
| With the prepaid debit card, your deposit is | | | | So how do these cards make money for the |
| recorded and the card is the only thing you need | | | | issuers? If you are thinking about using a debit |
| to make purchases at a store, online, or get cash | | | | card, make sure you carefully read the terms and |
| out of an ATM. Funding your card can be done by | | | | conditions and fee schedule. There are many |
| direct deposit or by reloading the card at one of | | | | programs available on the internet and they all |
| thousands of stores that provide the service. | | | | have different fee schedules and features. Look |
| There is no need to carry around more cash than | | | | for a card that does not charge you to reload if |
| you need. Because the debit card is using your | | | | you use direct deposit. Look for a card that will |
| own money and is not a credit card, there | | | | allow you to see your balance online or via |
| typically is no credit check and most persons are | | | | telephone without a charge. If you shop carefully, |
| approved online immediately. Because there is no | | | | you will definitely save money compared to the |
| credit check there is no inquiry recorded on your | | | | check cashing shops. |
| credit report. | | | | |