Most people are hesitant to bring cash with them when paying the bills or shopping at the mall. However, applying for a credit card or checking account can sometime be difficult especially to people with bad credit history. The next best option is to obtain a re-loadable prepaid debit card. Applying for this type of plastic card is very easy plus the fact that it is interest-fee because it is prepaid.
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. There are some re-loadable prepaid debit cards that limits the amount you can charge to your card each 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. Some issuers impose a penalty fee if it has been more than 60 days since the last time you made use of your debit card.
Customer service Fee. Not all debit card Issuers offer customer service for free. You can be charged a certain amount each time you call your issuer for assistance.
Transaction Charges. You may incur a minimal fee each time you use your debit card for payment.
Account termination fee. Closing your account will require you to pay another fee called termination fee that is to 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. The fact is that prepaid cards expire after a certain period of time. Afterwards, you will be charged a fee for the renewal of your card.
Copyright (c) 2010 Tara Tiemann
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