Prepaid Credit/Debit Card: Pros & Cons?

[Random]

I just want to know. Not big on having a regular plastic but a prepaid card would be helpful for making online payment.

[Amati]

Re: Prepaid Credit/Debit Card: Pros & Cons?

Why not just do your online payments out of your checking account? It's easy that way. Or, did you mean online purchases? I don't know about a debit card for that, I always use a credit card.

[acousticlady]

Re: Prepaid Credit/Debit Card: Pros & Cons?

Bank of Hawaii automatically gives you a visa credit/debit card that can be used just like a credit card (for stores and online purchases) but the amount is deducted from your checking account. I'm guessing the other banks do too.

[helen]

Re: Prepaid Credit/Debit Card: Pros & Cons?

I did not know that the concept of prepaid credit/debit cards existed. If it did I suspect that con would be going someplace to get a card and the time it takes to get it available for you to use.

Does any of the banks in the state do this now?

[craigwatanabe]

Re: Prepaid Credit/Debit Card: Pros & Cons?

Virtually all banks and some credit unions offer this service. The card usually takes about a couple of weeks to get.

I have an American Savings Bank ATM/Debit card that functions like a credit card. The caveat about a debit card is that you have very little fraud protection unlike a credit card that has a lot of protection.

A prepaid card is pretty cool because some places only allow the use of credit cards or plastiic in general (try renting a hotel room or a car with cash).

If you fill a prepaid credit card with only $1,000 that's all it's good for. There is no credit balance to pay and rack up interest charges for late payments. Once it's tapped out, that's it. Great card for teenagers. I'm thinking of doing that for my 12-year old. By going online I can "refill" his prepaid credit card with his weekly allowance instead of having to break a $20 bill to give him his money. I really don't like the idea of having my kid walking around the mall with a wallet full of cash. At least with a credit card there is some recourse if it gets lost or stolen and you know kids...I thought I left my wallet in my backpack.

[tutusue]

Re: Prepaid Credit/Debit Card: Pros & Cons?

I don't know when or how pp credit cards came into play but I saw them advertised for people with poor credit histories who couldn't get a regular credit card. I've also seen them targeted at students with parents feeding the card like an allowance. Had they existed when my kids were still at home I would've opted for them to use the pp cc's instead of being additional card holders on my account. No problem tho' as they never abused their (my!) cards.

As long as a card can be used as a debit card it's automatically linked to one's checking account and is, in essence, "prepaid" by nature of the balance in that account. I think Bank of Hawaii called them "access cards". Don't know whether they still do.

CPB also has this type of card. It's called a "check card". It takes the place of writing checks while the amount is automatically deducted from the checking account. Even when used as a credit card (which is what I do for protection) the amount is still deducted from the checking account.

I'm not aware of a debit card that's not linked to another account within the bank but I'm also not watching for such a thing!

As for a pp cc, you might want to look into hidden charges since they won't be making any interest off of you!

[craigwatanabe]

Re: Prepaid Credit/Debit Card: Pros & Cons?

[QUOTE=tutusue;184646]I'm not aware of a debit card that's not linked to another account within the bank but I'm also not watching for such a thing!
QUOTE]

You can link any check/debit card to a PP card simply by authorizing manual online payment via your routing/account number. You still need to manually authorize a payment to that card but essentially that's all there is to it.

I've seen these PP cards available at WalMart, Safeway and virtually all department stores. Heck even McDonalds offers PP cards for food purchases at a McDonalds that are rechargable.

[tutusue]

Re: Prepaid Credit/Debit Card: Pros & Cons?

You can link any check/debit card to a PP card simply by authorizing manual online payment via your routing/account number. You still need to manually authorize a payment to that card but essentially that's all there is to it.

But can you get that check/debit card without having an account at that bank? IOW, can I go into, say, a Bank of Hawaii, and get an Access Card without having a checking (or savings?) account at BoH? I don't think so but can't say for sure.

I've seen these PP cards available at WalMart, Safeway and virtually all department stores. Heck even McDonalds offers PP cards for food purchases at a McDonalds that are rechargable.

I have the McDonalds card! I forgot it the other day and had my check/debit/credit card with me so used that instead. To my surprise, it's a card swipe only...no signature...no eyeballing the card...no nahting!!! That concerns me.

The pp store cards don't count towards a credit rating. I think a pp Visa or MasterCard might. Not sure, tho'.

[Amati]

Re: Prepaid Credit/Debit Card: Pros & Cons?

Because of the fees, prepaid cards are said to be an "expensive way to spend your own money". I do not see any advantage to them, unless you are giving them instead of a "gift card" (that can only be used at a certain store).

[tutusue]

Re: Prepaid Credit/Debit Card: Pros & Cons?

Because of the fees, prepaid cards are said to be an "expensive way to spend your own money". I do not see any advantage to them, unless you are giving them instead of a "gift card" (that can only be used at a certain store).

I saw pp Visa cards for sale at Walgreens the other day. They're just glorified gift cards that can be used at more than one merchant. I don't see how those can impact one's credit as I mentioned in a previous post. I was actually thinking of the original pp credit card that, iirc, was called a "secured" card, meaning it was secured by a specific amount of money paid on the account up front...hence, pre-paid! I'm remembering those were issued by banks and, possibly, with an account like that set up it could impact one's credit rating. I wonder if secured credit cards have been replaced with the gift card type? And, as usual, I wonder if my memory is on a time out!

[craigwatanabe]

Re: Prepaid Credit/Debit Card: Pros & Cons?

But can you get that check/debit card without having an account at that bank?

No a Debit card must be linked to either a checking or savings account.

A PP credit card can be linked to anything that can have funds transferred from such as another credit card.

[Frankie's Market]

Re: Prepaid Credit/Debit Card: Pros & Cons?

A prepaid card is pretty cool because some places only allow the use of credit cards or plastiic in general (try renting a hotel room or a car with cash).

True, you can use a debit card at a car rental/hotel, when the cashier asks to swipe your Visa or Mastercard. But BEWARE!!! When some establishments swipes your card, they are also putting a certain amount on hold. In the case of a debit card, this is money from your checking account that you suddenly can no longer use, as long as the hold is in effect. Even after you return the rental car or check-out of the hotel and pay everything in cash, it can take up to several additional days for the hold to be released.

The amount of the hold can vary, depending on the number of days you are renting the car or staying at a hotel. Every company is different. But from what I heard, a common method is to hold $10 per day. So if you're staying at a hotel for 10 nights, a $100 hold will be placed on your checking account if you use a debit card. If the balance on your account is $150, you will suddenly find that if you go to the ATM, you will only have $50 available.

[tutusue]

Re: Prepaid Credit/Debit Card: Pros & Cons?

No a Debit card must be linked to either a checking or savings account.
[...]

Thanx...that was the point I was trying to make in post #6!!!

[Frankie's Market]

Re: Prepaid Credit/Debit Card: Pros & Cons?

I don't know when or how pp credit cards came into play but I saw them advertised for people with poor credit histories who couldn't get a regular credit card. I've also seen them targeted at students with parents feeding the card like an allowance. Had they existed when my kids were still at home I would've opted for them to use the pp cc's instead of being additional card holders on my account. No problem tho' as they never abused their (my!) cards.

It's fine for parents to teach their children by giving them their own debit card. But at the same time, it's also vitally important that you make sure they understand the difference between a debit Visa and a credit card Visa and not to use the terms "debit" and "credit card" interchangeably when you do teach them. Obviously, both types of cards need to be treated differently and your child needs to understand this.

As for a pp cc, you might want to look into hidden charges since they won't be making any interest off of you!

Strictly speaking, debit card "fees" are not hidden. When you first sign up for a debit card, the fees are disclosed in the written agreement. When you do rack up debit card fees, they are always shown on your monthly activity statement.

Some people think of the fees as being hidden because they are not immediately revealed at the point-of-purchase (like the ATM fees that are assessed whenever you carry out a transaction from a machine not owned by your bank). But once again, this is a good opportunity to teach your children to look carefully over any agreement before they sign and to get into the habit of examining their monthly statements. Hopefully, we as adults, are already doing this. If not, we should!

[tutusue]

Re: Prepaid Credit/Debit Card: Pros & Cons?

[...]
Strictly speaking, debit card "fees" are not hidden. When you first sign up for a debit card, the fees are disclosed in the written agreement. When you do rack up debit card fees, they are always shown on your monthly activity statement. [...]

Yes, I agree with what you're saying about debit cards. However my reference was to "pp cc" (I'm a lazy typer!), meaning pre-paid credit cards, including the kind that are purchased as gift cards. The fine print will expose those fees!