Hello, I'm your host, Mr. Chuck. I'm a retired accountant, turn truck driver, I have reduced my debt to zero in a short matter of time, debt reduction to achieve financial freedom takes commitment, confidence, determination, prepaid cards, are they a value or not? What you need to know, I'll get started in one moment. Together, we're going to explore our finances and figure out how to improve them reduce debt increase wealth is a podcast to inform those to improve personal finances, whether it's eliminating debt or making smart investments. I've been seeing a lot a commercials on TV and I do stream on my TV for these prepaid cards, whether it's a debit card or a credit card. And to give you an example, what I've been seeing is direct deposit, you get paid faster than a paper check, no late fees or interest charged because this is not a credit card, no overdraft fees on purchases mobile app to go to your account, so you can reload it or whatever. And then on and on. And I mean, all that sounds good, right? no late fees or interest charges, no overdraft fees. Well, it can't get much better than that. I'm saying, well, that may be true. The first thing you need to do is read the fine print for any prepaid card, whether it's a credit or debit card, before you purchase it. Why is you getting paid early? Why are you receiving your money up to two days earlier than if you have a direct deposit. That's just the processing the banks do, you may not get paid today, if you read the fine print, you may not get paid two days early. It may be one day or maybe the day that you get paid. There is no interest or late fees, no overdraft fees. That's because that's your money, they can't charge you an interest on your own money. There's no overdraft fees, because you can't spend more than what you have on the card. So if you put $1,000 on the card, you can't spend 2000, you can't spend $1,001, he could only spend $1,000. But if you read the fine print, you will find out the some cards have limits. Some cards, you can only withdraw $300 a day, or $2,000 a month. So if you're using this as a checking account, because you got mad at your bank, or your bank pushed you into getting a prepaid card, whether it's a debit or credit doesn't much matter, you may be limited on how many bills you can pay, if he can only withdraw $2,000 a month, and you're putting $4,000 a month on that card. What happens to the other$ 2,000 It's stuck, you can't get it off. You can't can't use it unless you stop putting money on it, wait and use it the following month. And then there's fees associated. Every one of these cards has some type of fee, whether you opt into a plan where you pay a monthly fee, and monthly fees range from $4.99 a month to $9.95 a month. Or you can pay as you go was such a good deal. I just pay the fees as I go. There is a fee on every transaction you do. When you put money on the card, they're going to charge you a fee. When you make a withdrawal, they're going to charge you a fee. When you buy something, they're going to charge you a fee. The cards I looked at it was roughly $1.50 per transaction with some transactions being more some transactions, not any of them being any less. So they're charging you a fee and they're charging the store where you're buying whatever you're buying a fee also, they're making a killing on this. And why did you bank push you into doing a prepaid card? Maybe you had a checking account that you are as always overdrawn on or you couldn't keep a positive balance or the bank just didn't like you. They're pushing you to a prepaid card because they can charge you more fees as of July of 2020. The bank is limited to how much they can charge you for using your debit card, a little history. Before there were debit cards, you had a checking account, and everybody wrote a paper check. And you gave that check to whoever, like the grocery store, wherever yours buying something from, they would then cash it, send it to her bank who processed it and then it got sent to your bank to speed up the PayPal handling, because there's millions and millions of these paper checks being processed. And it cost banks mill 1000s and millions of dollars. to process them, they had to have a machine to run them through, read it, assign it to your account. And there were some mistakes, and you had to reconcile your bank statement because there was a lot of mistakes, and you would catch stuff like that. And then they came out with plastic look like a credit card. And they call them a debit card, the debit card, it's just a replacement for writing checks, it's a more convenient way for you to use your checking account. That's all it is. The bank has been limited on the fees, they can charge by the federal government. So they're pushing you to use a prepaid card. So they can charge you more fees because there's less regulation on the prepaid cards. Now warning, if you're using a prepaid card, there may not be accepted, every place your debit card is, is there has a MasterCard logo on it, or a Visa card logo on it, or American Express logo. It's only going to be accepted at those merchants that accept that particular card. If it does not have any of those logos on it, you may be fairly limited on who accepts it. If it's a third party card, it's probably got high fees, all kinds of restrictions, and a lot of merchants will not accept it. So that is your first thing you need to look out for. Remember, you need to read the fine print before signing up for any pre paid card, what's a debit card or credit card. And next thing on I'll start talking about I got articles that are in my show note, we're going to talk about the advantages and disadvantages of these cards. We're going to talk about other things related to these cards that you probably need or should know before you start using them. a debit card is where you set up a checking account at a local bank. And that bank gives you a debit card assigned to that checking account, then we have credit cards, a credit card is where you up to an application and you apply for credit, the credit you apply for is based on your credit rating. So you apply for a credit card, they look at your credit rating. And they then will maybe give you credit up to 5000 10,000 1000. And it's all depending on your credit history and your credit rating. Every time you use a credit card, you are borrowing money from that company to make your purchase. And then you agree to pay that back. If you pay it back within a certain period of time, they may or may not charge you interest. Every credit card is different. So you need to read the fine print before you apply for it. Now we have this new thing on the markets been around for four or five years, and it's getting more and more popular and that are pre paid debit cards and prepaid credit cards. The biggest difference is a prepaid debit card is not connected to any checking account. And the same with a prepaid credit card. You're not applying for credit, so there is no credit check. That's why it's there easier to get the both of these cards have some limitations. They may have fees that are higher and more than what you would have with your normal checking account. As I said earlier, the banks are limited to what they can charge you on when you use a debit card associated with your checking account. So they're offering these prepaid cards so they can charge you more fees. They charge you a fee. are a monthly fee that you can pay. And then maybe additional fees. If you go outside of what that monthly fee covers, I'm not going to get into the details. And maybe he can pay a monthly fee for all transactions in the United States. But if you go out of the country, there may be foreign transaction fees that they charge you for. If you don't use the card for a period of time, they're charged you and non active fee of 495 a month or something like that. So they always charge in your fee, because their goal is to get as much of your money as possible. And the prepaid credit card is you're not applying for credit. So that's why there's no interest charge. And there's, there's no overdraft fees, because you can't overdraft it because if you put $500 on there, you can only spend $500. So you got to be aware, if you're using one of these, and you getting low on your limit, say you're like me, you know keep track of it, and you go to buy something, and you have $3 on there, and you're buying some for $10. Well, the $3 will come off the card and you now owe another $7. So you have to use either cash or another credit card to pay the remaining balance. So if you don't have another credit card or the cash with you, then you may not be able to make that purchase. I don't know if they can reverse those transactions or not. I assume they can't. So that's in a nutshell, what a prepaid cards why they are different. I got an article in my show notes. The reliable counter.com advantages and disadvantage are prepaid cards. What exactly prepaid cards where you get them is an anonymous prepaid card with a nine digit code number, both in terms of appearance and functionality. It resembles classic credit or debit cards and accept it virtually worldwide. And on the internet. The cardholder can just posit money onto his or her account that she or he has at his or her discretion. With prepaid card you can pay prepay all services and retail outlets. Shopping on the internet withdraw cash from ATMs and conventional PIN code is assigned to the card. Use cashback and other payment services. There are many providers of prepaid card you can choose between offers from banks and offers from non bank institutions that says King card, revolt or swill never heard of them. Before orden sets a car it's worth doing a little research and comparing offers checking the reviews of customers and amount of individual fees in order to choose the best offer tailored to your needs. So the first thing before getting a prepaid card is Why are you getting it What's your need and what are you going to use it for advantages of a card prepaid credit card, applying for credit always requires a good credit rating and stable financial situation. However, this is not always easy to prove, especially for this self employed who are often not only affected by the payment behavior of their customers, but also by inch occur income conditions, especially during the startup phase, which makes the application more difficult or even lead to rejection. That is why the prepaid credit card is particularly suitable for the self employed note. Both prepaid cards whether it's a credit card or debit card will not improve your credit rating. Okay, therefore, everyone is sort of talking about prepaid credit and unquestionable advantage or prepaid card is the fact that does not need to be personalized. This means that is issued to the bearer and is only paid by the person who's in his possession. It can also be passed from hand to hand ensuring autonomy on the one hand and is kurti of transactions on the other. If it's lost or even stolen, a thief has it at his full disposal, and the actual holder will only lose the amount of money he has credited with the card and not all the money and his personal account. So if he can use it without using a pin, then anybody can use it. What's more, this type of plastic is a great alternative to other cards why it can be recharged many times for any amount at any time. Before shopping, traveling or going out of town. This is why is also a perfect solution for children and is a good introduction to learning about savings that conditions are having at least a 13 year old. prepaid vouchers are used as gift vouchers. recharge For a specific amount, and it can be distributed in a Pacific store however, the value of variable funds cannot exceed 2.5 1000 euro. So this is a European article. Advantages at a glance, safety and autonomy. Multiple top ups allow for reasonable transfer a small amounts of money to important items, however, is protected by pin codes or daily transaction limits in the same way as traditional debit and credit cards. prepaid does not have to be personalized in practice to allow it anyone who has to make a transaction and knows the PIN code, free non cash transaction a good solution for parents. Thanks to daily limits, the children will not spend more than he or she should quick access to cash money transfer immediately appears on your account. Spending up to a fixed amount is a good safe car. For people who have problems with saving money and keeping rigor over their finance, its owner will not spend more than he has on his bill. Assuming you don't reload it allows you to shop abroad was easy a prepaid currency card is a great option for people who travel frequently around the world allows you to make transactions at any time and shops or online as well pay withdrawals from ATM and cash backs. Unlike currency exchange offers financial transaction and foreign currencies are not a burden with high currency conversion costs. And case at that it's possible to cancel the card prepaid can be managed through the help of mobile applications and websites loan on a prepaid card. Though it's not possible to make transfers to make a deposit on a technical account. The present of a prepaid card allows you to take out a loan for any purposes without having a personal account. I didn't know that. So for those of you that don't want to have a checking account or a bank account for whatever reason, you can have a prepaid card still take out loans. This advantage is a prepaid card. prepaid cards also have their flaws. These are payment cards, which works exclusively for non cash transaction. Such transactions for a prepaid card can be carried out frequently free of charge. However, all other card transactions are subject to a fee. This applies amongst others to withdrawing from from an ATM using a prepaid card where the technical account assigned to that card is use. Obtaining any information such as count balance or card balance is also payable and fees high compared to payment card use for bank accounts. When using prepaid card is also payable to purchase the remaining funds on the card which may be necessary in the event of cancellation or expert expert or exploration of the card. Why a prepaid card. Many people are probably wondering who needs a prepaid card it can be used by adults but it can be also used by children who parents receive money from their pocket money or other purposes. Plastic is a great way to shop on the internet there are and finally a lot of people who want to avoid being scanned by court Bailiff tax office so security officer others state institutions and decide to use a prepaid option. And such a situation a bare barrel or other institution has no right to look into the account or take care of the funds on it. Therefore, as a user interest in pre paid off opens a so called technical account assigned to a specific card and not to user and he can use that as a regular bank account with some exceptions. Well, the owner is not able to make transfers from a prepaid account. He will not make a deposit or a loan some banks offer prepaid cards also inform a gadget so there are hidden and the key ring match with other items. Their prepaid card is a good option especially for young entrepreneurs, startups and self employed people to bridge the startup period plus the phase of financial and uncertainty. The advantages of a prepaid card are obvious and the comparison individual providers the service offers such as car cash return a car to car transaction as well as a cost for the service offered is always worthwhile. That's your opinion. Okay, well, there is some advantages. I believe there's probably more disadvantages the fees are very high. Unless you have a monthly fee, it's gonna cost you about 10 bucks. 995 American Express has teamed up with one Walmart. So you can get one of their prepaid debit cards, I believe is what it was. And you can go to any Walmart store and you can load money on it. If you don't have a computer or smartphone to have an app to do, so, course there's a fee to low money on it, there's gonna be a monthly fee to have the card, there may be additional transaction fees for things out of the ordinary. So if you're self employed, before we become self employed, I recommend you get your credit card and have a good credit history. Before you start your own business. A prepaid card may be good if you're a parent, and you have a couple young children, say 13 1415. And you don't want them walking around with 20 or$30. Cash because they tend to spend it on things are not supposed to. Or they might spend all their money in one hour and not have any or one day, which still could happen on a prepaid card where you can put money on there as they need it. So if they're gonna go out, and they want to stop somewhere to get something eat, he could put $20 on it. And they can have the card and it's almost instant, you can go online, you can do it, then their card is reloaded when they leave the house. And then if something comes up, if they're out, and they go say to the shopping mall, and they find something on sale and you agree they should buy it, they give you $1 amount, you can load a little more on there and instantly have the money, they don't have to come home and get the cash or any of those hassles. You can also use it if you have trouble budgeting, if you want to have a budget items such as entertainment, where you go out to dinner or go to movies, you can put your monthly budget on a prepaid card, then when that card comes zero when you have no more money, and it's not the end of the month yet, you just don't reload it and you can control your spending that way I say little more willpower in you probably can avoid paying the cost of having a prepaid card. But that's just me, I'm always looking at everything has fees, why? So what you really need to look out for his fees, you need to read the fine print to find out what the fees are, you need to know what the daily amount you can spend on it, you need to know what the monthly amount you can spend on it. So if the monthly amount that you can spend on it is $1,000, you do not put more than $1,000 a month on it or you won't have access to your money, the daily limit is something you would have to decide on it yourself. If it's$300 was the card I saw. And you have a family of say three or four children, and there's five or six of you. And you go to the grocery store, once a week and your average grocery bill is 350 $400, you're not going to be able to pay for all those groceries with that one card. Because you're going to have that $300 limit. So you need to keep those things in mind. Or if you think your grocery bill is going to be 200. But you go and you fill up your cars and that cost you 100 and then your grocery bills, $210 you're going to be $10 short, those are just examples off the top of my head that you can run into. So that's why it's important to know the daily limit and the monthly limit that you can spend on it. Whether the fees, or is there a monthly fee option, or you can pay as you go plan. And what are the fees and that is very confusing. transaction fee$1.50. So every time you use the card is gonna cost you $1.50. If you have a fee for putting money on the card, say that's 395 every time you put more money on the card, they're going to charge you 395 if you lose a card, there's probably a fee. To cancel it, there's a fee to transfer the money off of it. There is a foreign transaction fee if you go out of the country, there may be a fee for that. If you cat ATM and use it, they're gonna pay a fee for that. So you can eat up a lot of your budget just paying these fees on these prepaid cards. And once again, in case you missed it, a prepaid credit card or a prepaid debit card will not improve your credit history period. These are not reported to any credit bureau. You cannot overdraft on them which is good. You can't spend more than what you have They're not going to charge you interest, because it's your money to start with. But they're definitely gonna charge you as fees, any which way they can. And if you're using this on a daily basis, those fees could get hefty. So you're willing to pay $10 a month, when you can go and have a checking account and have a minimum balance of say, $300, and have no fees and have a debit card, and it's gonna do exactly the same thing. Unless you're trying to hide something, or unless you have children, you don't want to set up a credit card for or you don't want them to have access to your checking account, with a debit card through that bank, then it might be a good thing. I'll be back in one moment was my final thoughts. If you listen to this podcast using an apple podcast app, please rate and review this podcast for all your non Apple users. You can download iTunes on a Windows machine and go to the upper left hand corner, select podcast, do a search, reduce that increase wealth, you can then rate and reviewed the podcast and also follow the podcast. I appreciate any feedback that I may get. Should you be using a prepaid card whether it's a credit card or debit card, you need to read the fine print and decide for yourself. If you don't mind having limits on your spending, or if you want to use them for your children that teach them some financial responsibility on spending their money or saving their money. It may be a good fit. But make sure you know what you're getting into. If you think you can use a prepaid card to get around your banking fees, you're most likely going to be paying more in fees on a prepaid card than you would on a typical checking account with a debit card. Remember, it's not credit, and it's your money. It's not going to improve your credit history if that's what you're trying to do. There's other vehicles you can use to improve your credit history by getting a credit card with a small limit, making timely payments on your credit card and making timely payments on all your bills you pay every month that will improve your credit score. prepaid cards will not do that. Unless you're trying to hide your identity from everybody or somebody in particular, a prepaid card is most likely not going to be a good fit due to the fees and limitations that are placed on them. I personally do not use them. And I don't have any reason. But if you're trying to avoid fraud and scams and people stealing your money, maybe when you're buying stuff online, a prepaid card could work for that as a as not connected to your account. The only money they'd be able to get from you is whatever the balance had be at that particular time. So again, it's gonna be up to you. Are they good? Are they bad? I am not going to make that decision. It's everybody's decision to know what you're getting into. Before you get into it. read the fine print on everything you do before you sign the dotted line or agree to their terms.