Elements of a Good Reloadable Debit Card

Jan 03, 2012 – With the start of 2012, there are droves of individuals and families resolving to get their financial house in order this year. Big banks have driven away many customers in poor public relations endeavors concerning increased fees. Customers continue to flock to smaller banks, credit unions and prepaid debit cards for their financial accounts. General Purpose Reloadable (GPR) prepaid cards are becoming the account of choice for many Americans to avoid traditional bank relationships, to stay on a budget, to avoid high bank or check cashing fees and even because it is just plain easy to get one.

Mercator Advisory Group estimates that around $460 billion was loaded on prepaid cards in 2011 and that number will increase to $685 billion by 2016. Using a prepaid card is simple as most are network branded by Visa, MasterCard, American Express or Discover and are recognized widely around the world. Most cards also have ATM functionality so you can withdrawal cash when you need it. Loading or reloading funds on a card varies by product and there are a few elements you should consider before buying a prepaid card:

  • Open Loop vs. Closed LoopOpen Loop cards typically come in Visa, M/C, AmEx or Discover and can be used most anywhere that accepts network branded cards. Closed Loop cards are usually store-specific like Chili’s restaurants, Home Depot or Starbucks and can can only be used in that retail chain. Either type card can typically be reloaded, although you should always check to make sure. Some Closed Loop cards could have an expiration date as well, especially if they are older and Open Loop cards can carry inactivity fees if not used regularly.
  • Multiple Load Options– It is always nice to have options and several reloadable Open Loop cards have a variety of ways you can load money on to the card. Here are a few:
    • Direct Deposit – by simply filling out a form and giving it to your employer or government benefits provider, your pay can be electronically transferred on to your prepaid card every pay period.
    • Green Dot – the ubiquitous Green Dot MoneyPak can be found at many retail merchants nationwide where you can load cash (for a fee) on the MoneyPak card and then transfer it to your prepaid card. There can be dollar load limitations and once you use a Green Dot MoneyPak, it cannot be reloaded and you will have to purchase another.
    • Retail Load Center- there are thousands of branded load centers located throughout the U.S. like Western Union and ACE Cash Express that are accessible for many prepaid cards. Also, many grocery, convenience, discount and drug stores have money centers offering load services through Visa ReadyLink, Green Dot, MoneyGram and PayXone to mention a few.
    • ACH Load or Wire Transfer – some prepaid products allow customers with an existing bank account, credit card or PayPal account to transfer or wire funds on to a card.
  • Direct Deposit Incentive – one of the best ways to avoid monthly maintenance or other fees with many prepaid cards is to take advantage of the direct deposit load option.
  • Easy Online Account Management – almost all prepaid debit cards now have an online tool to help you create a budget, set spending limits, create account alerts, pay bills and balance your account. There is really no need for a traditional bank account anymore.

There are other considerations when comparing loading options on any prepaid card like reload fees, maximum/minimum load amounts and potential incentives or rewards you might receive when loading money. Don’t forget to check any resources available that can help you choose the best option for your financial needs.

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