Why Choose A Prepaid MasterCard From MiCash?

Who needs a Prepaid MasterCard? Practically anyone who enjoys cashless spending without the hassle of having to worry about overdrafts will greatly benefit from MiCash’s prepaid cards. With prepaid cards, you can shop cashless without the risk of overspending or having to worry about compounding interest. When you use MiCash prepaid cards, you enjoy various benefits, such as security, convenience and easy access.

When getting a Prepaid MasterCard with MiCash, you enjoy a guaranteed 100% approval whether applying online or by phone. Once approved, you can instantly enjoy the benefits of cashless spending. When your card runs out of funds, you can just as easily reload it through any Western Union agents or through any Green Dot MoneyPak outlets at Wal-Mart, Kmart or 7-Eleven.

Not only is it fast and convenient when you’re on the go but you can also use it to shop for items online, or to pay your bills.

A recent interactive article in the New York Times offered 31 Steps to a Financial Tune Up. Step Number One was to start saving 1% of your salary. This is an excellent idea that is nearly pain free.

If you have money taken out of your paycheck before it hits your bank account, you’ll never miss it. Once you’ve done that, increasing your savings by another percentage point probably won’t hurt a bit. But over time, it could add up to six figures in additional savings.

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Fact is, every year earlier in your life that you start saving for your retirement you will see a greater return on your savings, due to the magic of compounding interest. A person in their early 20s has to save  a fraction of what someone in their 40s has to save to reach the same goal. Suppose you save just one thousand dollars when you’re 20 and don’t touch it until you are 65. If you averaged of 10 percent interest on your savings per year (not an unreasonable figure) that thousand would become nearly $73,000 by the time you reach 65. Saving $1,000 when you’re 50 would only grow to $4,200 by age 65.

The one percent rule can apply to just about everything. Got some money in your wallet, take out 1% and put it in a jar. Do that for a few weeks, and you’ll have an unexpected windfall. Grocery shopping? Put something back and don’t buy it to the tune of at least 1%. Over the course of a year, that’s real savings. Driving down the road? Go just 1% slower and you’ll be saving both gas and the environment and you won’t even notice the difference in your time of arrival. Filling your bath with water? That’s right, fill it just a little less.

You get the idea. Being part of the 1% club means you will keep savings top of mind. The result is that you will probably save more than 1%. How much farther is up to you.

Flickr image by The Consumerist

Now that the New Credit Act of 2009 is largely in effect, credit card companies have to follow new rules meant to protect consumers. These rules make it harder for banks to charge up front fees for “sub prime” credit cards. Thus, banks that want to remain in the sub-prime market (which includes up to 70 million Americans) and retain the profits they are accustomed to are testing new fees and shifting to higher interest rates. One card issuer recently tested a 79.9% annual interest rate. According Blog News Service:

A national bank charging 79.9% interest on a credit card is legal — as long as the issuer fully discloses the terms as required by the federal Truth in Lending Act. Still, the high rate has been met with shock across the country because it is so much higher than prevailing APRs and penatly interest rates. The CreditCards.com Weekly Rate report national average for bad credit credit cards was 14.15 percent on Feb. 12.

Consumers with bad credit who find it hard to get a low interest rate credit card should shop carefully before accepting a card with a very high interest rate. Of course, they do have the option of using a prepaid debit card like the MiCash MasterCard. A prepaid card is not a credit card, so it doesn’t matter if you have bad credit.

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A prepaid debit card allows you to pay for gas at the pump with plastic. However, you may not realize that many gas stations will preauthorize as much as $50 or even $75 on the card if you use a signature transaction instead of a PIN transaction. This is also known as a “block” on the card. The reason it happens is that the gas station doesn’t know if you have enough money on your card to cover your gasoline purchase. Find out more about blocks on the FTC website.

In an MSN Money article British Petroleum spokesperson Sarah Howell explains, “We want to make sure that we’re protected, that we get payment for the gasoline.”

A PIN transaction at the pump (or inside the gas station) is in real time, and avoids the block or hold on your card. However, because signature transactions are “offline” and not in real time you may experience a block for a few hours or even several days until the transactions are processed in a “batch” process at some point in the future.

In the case of a checking account debit card, if you have less than the block amount in your account, you may be hit with an overdraft charge, even though your actual charge is less than your balance. For example, suppose your pump transaction is $27 and you have a $50 balance in your checking account. The pump pre-authorization of $75 causes you to be temporarily overdrawn.

The MiCash prepaid MasterCard protects you from any overdraft fees because whenever you attempt a transaction that is more than the cash you have loaded onto your card, the transaction will be rejected at the point of sale. Not all prepaid cards are alike and some do allow overdrafts and charge overdraft fees.

The bottom line?

• Use your PIN number when paying at the pump, or
• Have at least $75 on your card to cover any pre-authorization “blocks” on signature point-of-sale transactions.

ChexSystems is a credit reporting agency that has been in existence for many years.  ChexSystems offers data to banks (and gathers data from banks) on how a consumer has handled deposit accounts at banking institutions. The company today is managed by eFunds Corporation, a publicly traded company.

Unless you work at a bank or have been denied opening a bank account, you probably haven’t heard of ChexSystems. As a service to help banks limit their exposure to fraud and credit risk, ChexSystems maintains a list of individuals whose previous bank accounts have been “closed-for-cause.” These causes range from outright fraud, such as writing bad checks, to other causes that present a credit risk or potential for fraud. ChexSystem reports on such risk factors as:

• Account holders who report lost or stolen checks and have closed their account for this reason.

• Account holders who have had extended negative balances.

• The number of times a consumer has applied to open a bank account in the past 90 days.

These are flags for the potential for fraudulent activities such as opening and closing accounts for the purposes of writing bad checks. Some analysts also suggest that banks might use the list to weed out unprofitable banking customers such as individuals who keep low balances (which are less profitable for the bank.)

To be sure, Chexsystem helps banks combat the problem of fraud. However, innocent individuals who have not committed fraud, and may have only been guilty of inadvertently bouncing a check, or having a few overdrafts in a short period of time, can wind up essentially “blacklisted” from being able to open a bank account because they are on the ChexSystems list.

Banks decide based on their own policies and procedures when to close an individual’s account and report that fact to ChexSystems.

So, if you are having trouble getting a checking account, you do have alternatives.

How MiCash Prepaid Debit Card Is A Better Cashless Purchase Alternative

Getting a prepaid debit card these days is much preferred by many consumers because of the safety, ease and convenience that they offer. With all the electronic means of purchasing goods, cashless spending is now moving to become the preferred payment method by many people. However, using checks and other instruments have put thousands of people at the mercy of compounding interests, check cashing service fees and other additional charges.

Fortunately, there is now an alternative means to spend without cash and purchase goods electronically, without having to worry about the usual costly charges. A MiCash prepaid debit card is the best companion to the savvy spender that lets him or her take control over how much he or she can spend, without worrying about overdraft charges. MiCash prepaid cards let you purchase goods at over a million stores that accept Debit MasterCard payments, online and offline. In addition, it also lets you have access to cash instantly at millions of ATMs globally. It’s the smart alternative to other forms of payment.

MiCash Prepaid MasterCard: Safety And Convenience At Your Disposal

A prepaid MasterCard is the perfect companion for those who want the benefits of cashless spending without worrying about the woes of compounding interest rates and check cashing fees. More than just a fad, prepaid cards are today’s best means of paying for your bills and shopping items.

MiCash satisfies the needs of savvy spenders who want convenience in making their purchases. MiCash prepaid card offers them even more than just convenience. MiCash offers a cheaper alternative to using checks, as MiCash puts an end to overdraft and minimum balance fees. With a prepaid card, cardholders can also avoid costly interest charges and late fees, as well as the possibility of losing cash by accident.

Additionally, a MiCash prepaid MasterCard lets cardholders control how much they can spend, as they can choose how much they want to load to their cards. And with quick lost or stolen card replacement services, as well as FDIC-insured funds, safety doesn’t get much better than this.

David Lazurus of the LA Times reports that Citigroup Inc. is leading the way for credit card companies to impose hefty annual fees to credit card holders. Citi issues cards that did not have annual fees will now get them, under Citigroup’s new rules. Cardholders have little recourse other than closing an account to avoid the fee, unless the charge at least $2,500 a year. Just another reason why many people are better off using a prepaid card (which is not a prepaid credit card) to make purchases and track their spending.

Lazurus finds it horribly ironic that Citigroup’s CEO announced the new fees after expressing his gratitude to taxpayers for bailing out the giant bank at the peak of the financial crisis.

How Citi expressing its gratitude for that act of taxpayer generosity?

It’s slapping a $60 annual fee on many credit cards that previously had no fees and telling customers that if they don’t like it, tough patooties. They can pay off any outstanding balance and take their business elsewhere.

Man, if that’s Citi when it’s grateful, I’d hate to see the company when it’s cheesed.

We agree.

Prepaid Debit Cards are Not Prepaid Credit Cards. In fact, the term “prepaid credit card” is an oxymoron—or a contradiction. Credit cards provide consumers with a line of credit and charge a finance charge for any purchases or cash advances that are made with the card and are not paid back within one billing cycle—typically a month. How high the finance charges can go depends on what card program you select. Leaving a balance owed on a credit card is essentially creating debt that does not have to be paid back in fixed installments but rather “revolves” like a revolving door, as payments to the debt are made and new debts are added to the credit card.

In contrast, prepaid debit cards or “prepaid cards” can be used much like a credit card for shopping online or in person, because they are issued by a bank, like a credit card, and carry most often a Visa or MasterCard logo. The difference is that you are putting your own money on the card and then withdrawing funds as you make purchases with the card. You are prepaying with money up front. Because the money is already sitting in your card account, you are not borrowing money or using credit. And you will avoid any finance charges. You also have the option of selecting whether you want to make a purchase as a signature transaction or as a PIN debit transaction, which allows you to get cash back at the point-of-sale or at an ATM. Additionally, if you try to make a purchase that is more than the available balance on the card, the transaction should be rejected, so you cannot be overdrawn or be hit with overdraft fees. (But be sure to choose a prepaid card program that does not allow you to create a negative balance, because not all prepaid card programs are alike).

Unlike one-time-use prepaid gift cards, reloadable prepaid cards with the Visa or MasterCard logo are designed for repeated use, allowing you to replenish the balance on the card. They are a good choice for people who cannot get a checking account and thus a checking account debit card. They are also a good choice for people with bad credit who have trouble getting a credit card. “Secured credit cards” are another form of credit and are also not prepaid credit cards or prepaid debit cards. They require you to deposit your own money with the card account in order to borrow money against the deposited funds (with potential interest), which remain unavailable to you until you pay off any credit balance and close out the card account.

A new study by economist Michael Flores of Bretton Woods, Inc. shows that prepaid debit cards can actually cost less to use on a monthly basis than low balance checking accounts for some consumers. Flores compared the average fees of prepaid cards against the fees charged by checking and debit accounts that charge for low balances, ATM usage, and overdrafts. He found that banks offering such accounts rack up charges of $200-$350 a year. And consumers who can’t get a checking account without a prepaid card “…must rely on a patchwork system of money orders, check cashing services and bill-payment fees” according to Payment News.

“There is no question that prepaid cards are a much better option for many consumers,” said Flores. “An objective review of the costs associated with these cards compared to costs of alternatives such as basic bank checking account, in addition to the safety and security associated of prepaid cards compared cash, leaves no doubt that prepaid cards are a smarter option for many.”

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In comparison, by our calculations, MiCash cardholders save as much as $322 annually compared to people who use check cashing services instead of direct deposit to our Prepaid MasterCard. And compared to our competitors, we offer some of the lowest fees around, as well as friendly 24/7 phone customer service.