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Reloadable Prepaid Debit Cards

There are other types of debit cards such as re-loadable prepaid debit cards which have other tangible benefits. There are many significant differences between standard credit cards, normal debit cards and prepaid debit cards. As a result, there are some important aspects to keep in mind when using these types of cards such as security as fees.

Security

Just as with a credit card, if you use a prepaid debit card you will have certain security benefits. For instance, if you lose your card or if it's stolen, you can have it replaced and you won't be responsible for any fraudulent activity.

Online Bill Paying

A re-loadable debit card can make purchases at just about any web site that offers credit card purchases. That means you can make your birthday, holiday, or everyday purchases from the comfort of your home computer just as with your credit card.

Retail Store Purchases

You can also use a prepaid card just like a credit card for your local store purchases. These cards are MasterCard / Visa cards and so they're accepted virtually everywhere.

Re-loadable debit cards are handy for the 80 million people who have little or no access to bank accounts and the industry is growing. Last year alone, users loaded about $9 billion onto these cards, but a lot of that money went to the banks. That's because fees quickly accumulate, including activation fees, ATM withdrawal fees, balance inquiries, and purchasing fees. These fees are tacked onto these modern convenience cards.

There is also little to no maintenance or customer service when you use them, and there's also an inactivity fee if you don't use them for 60 days. The average cost per month is $39 to $79, which makes them more of a liability than a benefit for most people.

Don't Allow Banks to Take Your Money

Keep a cushion of money in your account to avoid bouncing checks or debits. Decide that you are not going to let your account fall below a certain amount, like $500. When you see it getting close to the amount you choose, transfer money into your account or make a deposit. If you don't have the money to replenish it, then you should cut back on spending immediately, until the money has built up again.

Track your account

Sign up for your bank's online banking program. This is an easy way to monitor what is going on with your checking account. Pay close attention to the available balance.

It's a common misconception that once you deposit a check into your account, that it's immediately available. Unfortunately, this is often not the case. Most banks put 'holds' on checks for several days, or it may even be up to a week. Until the money clears, you should not spend the money you deposited or be using debit cards. Debits go through immediately when you make a purchase, so if the bank is holding your deposit, you'll get huge fees on the overdrawn debits. If you need the money right away, cash your check, then deposit what you need to. When you deposit cash, it's available immediately.

Call your bank

When it comes to overdraft fees, banks hope you won't fight back and request courtesy credits. Many banks will credit you back fees or at least part of a fee, especially if it's your first offense.

Cash

Cash can't bounce and that's the beauty of it. If you are not willing to use a credit card, then cash is the next best option. Spending cash makes you more aware of the money you spend. When you swipe a debit card, you tend to spend more because it doesn't seem like spending as much. At the beginning of each week, set a budget for yourself and stick with it. If you run out of money during the week, oh well. You'll be learning how to manage your money better and save some for a rainy day.

Using debit cards is a hassle free way of making purchases and getting out of a store quickly but they also can be a pain in the behind if you don't keep track of what you spend. Don't get into a habit of withdrawing cash from your account either. Its just too easy to overdraw your account, which only gives the banks more of your hard earned money.