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Determine If a Prepaid Credit Card Company Is Right For You Before You Order The Card
This is straight talk about prepaid credit cards and how to determine if a prepaid credit card (PPCC) is right for you and how to select one that fits your needs.
Why my personal interest in Prepaid Credit Card?
As the holiday season approaches, I wanted to use something that would help me control my budget and guard against theft. A PPCC allows me to spend only the money I put on the card and no more.
Also if the card is lost or stolen, I want a point of contact to call to stop use of that lost or stolen card, and have another card issued to me. Since the card can only spend what I have on the card, no one else can use the card for anything else above the cards value.
What should you look for when selecting a Prepaid Credit Card?
Everyone wants convenience. But you need to decide what criteria you want in a PPCC to determine which company's card to select.
For example, ... here is my criteria for a PPCC:
- I want a prepaid credit card with a low monthly fee,
- The cost to add money to the card has to be very low to no cost at all; even though I would load the card about twice a month,
- The card should have a number of different ways to put money on it,
- I want a card that would not charge me money to use as a credit card,
- I should be able to use the card for Internet purchases (very important),
- I will not use the card at any ATM but it's nice to have the option,
- I can load up to at least $2,500 per day, (maximum load amount should reflect what your pay check looks like) [This is my personal preference. Yours can differ.]
- I want no hidden fees (very important), and
- The card has to look nice and professional (from the image on front of the card to the text on the card).
As you can see, I have taken the time to decide what criteria must exist in order for me to select a PPCC. What is your criteria for a prepaid credit card?
What makes a good/bad prepaid credit card?
The primary purpose of a PPCC is to help you track your budget by not allowing you to over-spend. This means that the PPCC should not allow you to make a purchase if you do not have the money loaded onto the card. And there should be no form of over-draft protection. This is not a savings nor checking account, nor a real credit card. It is just a prepaid credit card.
- Check your criteria list against the PPCC's terms and conditions agreement, fee chart, and other policies the PPCC applies to all users.
- What is the maximum amount of money that you will add to the card on any one day (excluding direct deposit of your paycheck)?
- What is the maximum amount you can spend daily using the PPCC and are you comfortable with that amount?
- Do the places you plan on using the PPCC except the PPCC?
- Although all PPCC state that they are excepted at thousands of locations, this may not actually be the case. When you get your PPCC, test it out. You may be surprised where you can't use the card.
Cost of use
What is the total monthly cost to use the PPCC (including maintenance fee, and usage as ATM card or credit card, cost to add money to the card, closest place near you to add money to the card, travel time and expenses to and from the place to add funds to card, any other fees that you apply to you using the PPCC.
If this is a PPCC card, then overdraft should not be possible.
fees that are not listed anywhere.
The fine print
Do not let the small print intimidate you. Use your web browser to make the fine print bigger (control +) key sequence will do this. Just hold down the control key and type the plus (+) sign key until the text is the size you want. To reverse, type (control -) control minus key.
Read the guarantee. If it talks about fees to do something, then check for the fee in the fee chart. If there, great; if not, then this is a red flag.
Restrictions (what you can't use the PPCC for)
Typically, these are purchases you are not allowed to make. Or refer to places you are not allowed to use the PPCC.
Maximum daily amount you can add to the PPCC.
Any prepaid credit card using the following types of terms should give you a reason to investigate it further. Remember what you are trying to get; a prepaid credit card. Not a real credit card. There should be no:
- over-draft protection,
- termination of service fee,
- cost to use as a credit card,
- reference to fee(s) that are not designated anywhere,
- only a few places to load the card,
- only a few places you can use the card,
- and no credit building
Additional fees and charges (these are fees and charges that are listed in the “terms and conditions” statement, but are not printed under the FEES chart.
Check the Internet for reviews about the PPCC. For example, search Google for “reviews of [PPCC NAME HERE]” without the square brackets. Read through them; but remember, there are people who love to complain about anything. So, do not just take the reviewers word about their experience with the card. Check other sources too.
The business(es) behind the prepaid credit card
The way most prepaid credit cards are setup business wise, is that a company is in charge of managing the card, while a separate bank is associated with the card (the bank association allows the card to carry the VISA or MASTERCARD logo).
There are some companies out there that have more than one PPCC on the market. Research each PPCC to get a feel for the type of company they are. Just because a business had several PPCC does not make for a good/bad business.
Yet, if all of the PPCC's that one company has, show complaints about the usage of all their cards, this may be a red flag indicating what you can expect if you obtain any one of that business's PPCC.
Do some research about the company and bank behind the PPCC.
The Better Business Bureau (BBB) is an excellent source to find out about the companies and banks behind the PPCC of your interest. The BBB rates various PPCC using the scale of A+ to F (A+ meaning an excellent place do business with, and F meaning an extremely poor place company to do business with).
After taking a look at the BBB's report on some of these PPCC, you can quickly see who is rated A+ and who is rated F (and there are some PPCC with a BBB rating of F). Here is a link to an actual BBB report for The Bancorp, Inc. . Note the rating of this business; the BBB rating for The Bancorp, Inc. is A+.
That's All. You now have the skills. Use them well grasshopper!
The idea of this hub was to show you how to determine if any one PPCC is right for you. But, you can use this procedure to determine if any company you do business with, is a company you want to do business with.
A company does not have to be a member of the Better Business Bureau to be listed in the BBB's directory. Read more about the Better Business Bureau at www.bbb.org to find out more of what the BBB has to offer consumers.
Lastly, I wanted you to know that I do NOT endorse any one prepaid credit card over another. You must decide which is right for you.
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