Is My Prepaid Visa Debit Card Protected
Prepaid Visa debit cards come with a Zero Liability Policy, meaning you wont be held responsible for certain fraudulent or unauthorized transactions. But youll need to notify your card issuer immediately if your prepaid card is lost or stolen and use care in protecting your card.
Like other prepaid debit cards, Visa prepaid debit cards are generally considered secure. But there are some scams associated with them. For example, fraudsters may ask for you to send them money on a prepaid card to settle an account or make a payment. Never give out your prepaid debit card number to anyone you dont know.
If You Want The Convenience Of A Debit Card Without A Checking Account A Prepaid Visa Debit Card Could Be A Good Option
If you dont have a bank account, it can be a real challenge to buy things online or pay your bills. Prepaid Visa debit cards give you the ability to swipe your card or make purchases online without the need for a credit check or opening a traditional account.
But prepaid debit cards can come with significant fees, so its important to understand how they work and how much youll pay to use them before you commit. Understanding the pros and cons can help you decide if a prepaid Visa debit card is right for you.
An Alternative To A Prepaid Debit Card
If the reason you want a prepaid debit card is that you have a bad credit history or no credit history and are unable to get a conventional credit card, you might consider a secured credit card instead. Secured cards are easier to qualify for because they require you to put down a refundable security deposit that serves as collateral for the lender.
The advantage of a secured credit card is that your monthly payments can be reported to the three major credit bureaus and help build your credit history. Debit cards, either prepaid or the regular kind, don’t report transactions to the credit bureaus and will do nothing to improve your credit.
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Prepaid Visa And Other Prepaid Cards
They give the recipient an incredible amount of flexibility to buy whatever they would like, from any store that accepts Visa or other prepaid cards. ;Who wouldnt love this flexibility?; Its as good as cash without handing over the green.; You can buy plastic or digital prepaid cards. If you have someone you want to send a gift to immediately, you can easily send a digital prepaid card and the recipient will have it in minutes.; There are several providers that will even let you personalize it with a favorite picture or logo and emboss the recipients name and small message onto the card. All of this equals a great gift.
Prepaid Visa Activation Fees
A prepaid Visa activation fee is a fee that is charged to the buyer of the prepaid card to put value onto the card.; It occurs when you first purchase the card.; At grocery stores, it is typically a $4.95 fee on top of the amount on the gift cards. An example would be $25 + $4.95 activation fee.; Its a one-time fee and once it is paid you never need to do it again.; Not all cards charge an activation fee but many of them do.; This fee can range from $1.00 to $9.95.;
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Holds On Funds When Using Your Prepaid Card
Restaurants, businesses that provide a service, hotels, car rental agencies or pay-at-the-pump gas stations may put temporary holds on the money on the card. This may limit the amount of money available. Check your balance after using your prepaid card.
For example:
- If you use a prepaid card to book a hotel room, some hotels will immediately reserve funds on the card to hold the room. You wont be able to use this money to make other purchases. Once you’ve settled your hotel bill, the hotel credits any unused money from the hold to your prepaid card. If the hotel doesnt clear the hold immediately, there may be a delay before you can use the funds
- If you use a prepaid card at a restaurant or other business, they may reserve funds to cover tips by adding an extra charge to the card
What Is A Prepaid Debit Card And How Do I Get One
A prepaid debit card is an alternative banking product that only lets you spend the money you load onto the card. Like debit cards, prepaid cards work at any merchant that accepts its payment network, such as Visa or Mastercard. Theyre safer and more convenient than using cash. Theyre also known as stored-value cards, pay-as-you-go cards or, more formally, general-purpose reloadable prepaid cards.
You can buy a prepaid debit card from a retailer, bank, credit card company or other financial services provider. When you purchase one, your card funds are usually part of an account held by a bank or credit union.
Prepaid card companies usually offer several ways to load funds onto a card. Some cards also let you link to a checking account to make online transfers.
» Want to find the best prepaid debit cards?;Check out our favorite options
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Whats The Difference Between A Prepaid Card And A Credit Card
When you use a prepaid card, youre spending money that youve already loaded onto the card and in most cases you cant spend any more than this. This can be confusing because prepaid cards may still have a credit card logo like Visa or MasterCard on them.
When you use a credit card, youre essentially borrowing money. You dont need to top up the card in advance and you can get into debt and get charged high rates of interest. So in this way prepaid cards are very different to credit cards.
What Fees Apply To A Prepaid Credit Card
Although you cant go into debt with a prepaid card and get charged interest, that doesnt mean there arent any fees. Prepaid credit cards may have some, or all, of the following fees:
- Upfront charge. There may be a one-off upfront cost for purchasing the card.
- Top-up charge. There may be a charge every time you load money onto your card.
- Purchase fee. You may be charged a percentage fee every time you use your card to buy something.
- Stamp duty. Government stamp duty of 5 will apply to the card.
- ATM charge. If you use the card to withdraw money you may be charged a fee.
- Non-use fee. If you dont use your card for a certain period of time, a non-use fee may apply.
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Pin Debit Purchase Transaction Fee Or Signature Purchase Transaction Fee
Many of the prepaid gift cards are debit cards. If you choose a debit card, look for a PIN Debit or Signature Purchase Transaction Fee. What exactly does this mean? When using a debit card, users can opt to go the debit route and enter their personal identification number when making a transaction. Or, they can decide to use their debit card as they would a credit card and sign for the purchase.; Either way, you will be assessed a small bank fee. A typical charge would be $0.95 per transaction.
Adding Funds To Your Card
Some cards come with funds on themyou buy a card with a set value and that’s how much money comes with the card. Others are designed to be loaded with funds as needed. If you can add funds, you may have several options for doing so, including:
- Setting up direct deposit to the card
- Bringing cash to a retail store that can add funds to your card
- Depositing a check with an app that is linked to your card
- Transfering money from your bank account to your prepaid card
Some cards may charge a fee every time you reload funds. If that’s the case with your card, plan your reloads carefully to minimize those fees.
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Hidden Fees To Watch Out For
All prepaid cards are different and may charge varying fees, from a charge for each time you use the card to make a purchase to a fee for using it to withdraw cash from an ATM. These fees can add up quickly, eating away at the balance of money you’ve loaded onto the card. It’s important to read the fine print to find the best deal. Look for information on the card, inside the card package or at the card issuer’s website
Some activities your card provider might charge for and a range of their associated fees include:
- Card purchase and/or activation: $0-$30
- Card reload: $0-$5
Currently, some prepaid cards are covered by some consumer protection laws and regulations, but others are not. That will change in October 2017, when new CFPB rules go into effect.
The new rules will help customers avoid costly fees and give them the same protections that come with traditional debit and credit cards. Consumers will be able to compare cards more easily, and their money will be safe if their cards are lost or stolen.
Under the new rules, fees must be disclosed on the outside of card packaging. Consumers who report lost or stolen cards within two days will be only liable for up to $50 of their losses. Issuers must provide free and easy access to prepaid cardholders’ account information, and those issuers who do give prepaid-card consumers the option of spending more money than they have deposited in the account must give protections similar to those on credit cards.
What Are Some Prepaid Visa Debit Cards To Consider
Prepaid Visa debit cards come with a variety of features and fees, depending on the issuer. Here are a few you may want to explore. Terms and conditions apply, so be sure to read the fine print.;
- MyVanilla Prepaid Visa Card® This card doesnt charge a monthly fee and allows you to have your paycheck direct deposited into your balance.
- Walmart MoneyCard These cards allow you to load up your balance with cash at any Walmart store and earn cash back rewards when shopping at the store. Youll also earn 2% annual interest on up to $1,000 in your savings account.
- Starbucks® Rewards Visa® Prepaid Card You can earn food and drink rewards and wont have to pay any monthly fees or activation fees.
- Green Dot® Reloadable Prepaid Visa® Card The $7.95 monthly fee can be waived if you load $1,000 or more in the previously monthly period.
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What Is The Difference Between Prepaid Cards & Debit Cards
Prepaid debit cards have only the balance you put on them when you load the card. Debit cards, on the other hand, are tied to your bank account.
Every time you make a purchase or an ATM withdrawal with a debit card, the money comes out of your checking account. Most debit cards are free, but you put your checking account at risk if the card is lost or stolen.
Prepaid Debit Cards Vs Regular Debit Cards
With a regular debit card, the amount of money you can spend is tied to how much you have in the checking account it is linked to. So you need to have a bank account to use a regular debit card, while you don’t with a prepaid debit card. With a regular debit card, the amount of money you have available to you will also fluctuate from day to day, as money moves in and out of your checking account. With a prepaid debit card, you have a fixed amount of money to spend, which declines as you spend it and rises only if you reload the card.
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Shopping Or Withdrawing Cash With Your Card
Once youve added funds to your card, you can spend that money or withdraw it in cash at ATMs. To buy something in-person, just swipe or insert the card at the point of sale. If you’re shopping online, type in your card number. At an ATM, just insert your prepaid card like any other bank card and withdraw cash. Be aware that you could be charged a fee for every purchase or ATM visit, though it depends on how the issuer has structured the card.
Do Prepaid Debit Cards Help Build Credit
Despite a prepaid debit card having the same look and feel of a regular credit card, these cards dont help to build your credit like a credit card can.
For an account to impact your credit score, it needs to count as a debt or liability. To build good credit, you need to make regular payments on these debts over long periods of time. These factors play the biggest roles in building your credit.
A prepaid debit card, on the other hand, works like a regular debit card whereby you load the card with money and draw on the funds when you make purchases.
You can use a prepaid card like a credit card, but it wont build credit like a credit card.
In effect, because you dont borrow money from anyone with a prepaid card, the account doesnt get reported to credit bureaus and therefore has no effect on your credit score.
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How To Add Money To Prepaid Cards
Once youâve used the balance on a prepaid card, you have to add more money to it if you want to keep using it. There are several ways to do this:
- Deposit money directly to the card from a checking or savings account.
- Deposit money to the card from paychecks or other sources of regular income.
- Reload the card at a retail location using cash.
- Purchase a reload pack to add a predetermined amount of money to your card.;
Prepaid Cards Vs Debit Cards Vs Credit Cards
A key thing that differentiates prepaid cards is that they arenât linked to a bank account like a debit card is, and they arenât linked to a line of credit like a credit card is.
When you use a prepaid card, youâre only using the money that youâve loaded onto it. You arenât borrowing any money, and the card doesnât have the ability to draw from any other financial accounts you may have.
Thatâs why you need to reload an empty card with more money if you want to continue using it.;;
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Netspend Visa Prepaid Card
The NetSpend Visa Prepaid Card is one of the best no-fee prepaid cards. With this card, you will not have to worry about overdraft fees, activation fees, credit checks, or minimum balances. The NetSpend mobile app allows you to manage the money on the card with ease, and you can load money onto the card via direct deposit or checks. One of the best features about this card is that it is insured by the FDIC. This means that it is a safe card to use to make purchases. NetSpend also makes it easy for customers to replace their card, in the event that it gets lost or stolen.
How Prepaid Debit Cards Work
Prepaid cards vary widely, but they tend to have these features in common:
Reload options: You can usually add money to a card in multiple ways, such as setting up direct deposits, loading cash at participating retailers and depositing checks at ATMs. Some cards also let you make online transfers or mobile check deposits from a smartphone.
ATM access: Some prepaid cards have access to free nationwide ATM networks, such as MoneyPass and Allpoint, or to branded bank networks for cards issued by banks.
Fees: You might have to pay for activating a card, making deposits and using out-of-network ATMs. Theres usually a monthly fee, which sometimes can be waived by having direct deposits, for example. Some cards charge a fee for every purchase and ATM transaction.
Amount limits: Some cards restrict how much you can withdraw, reload or spend during a certain period, such as a day or month.
You might have to pay to activate a card, make deposits and use out-of-network ATMs. Theres usually a monthly fee. Some cards charge a fee for every purchase and ATM transaction.
Protections: Reloadable prepaid cards have the liability and;fraud protections required of debit cards by federal law. Some cards offer purchase protections, but it can be difficult to dispute unauthorized transactions or correct errors. One safeguard many cards have is federal deposit insurance, meaning your money is covered if an issuer becomes bankrupt.
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Starbucks Rewards Visa Prepaid Card
With a maximum balance of $10,000, you will enjoy the flexibility of the Starbucks Rewards Visa Prepaid Card. With this card, you are not limited to making purchases at Starbucks. In fact, you can use it anywhere that accepts Visa as a payment method. This card does not have any monthly or activation fees, and if youre an avid Starbucks drinker, you can link your card to your Starbucks rewards account. Unfortunately, the downside to this card is that you cannot withdraw money from an ATM. You will also see a 3% fee if you use the card outside of the United States, so we dont recommend this prepaid card for travel purposes abroad.;