The Senate’s passage of a sweeping financial reform bill included a last minute amendment to limit fees charged by Visa and MasterCard to retailers for debit card transactions, known as the “interchange” rate. (This bill did not address credit card interchange rates. Also American Express and Discover Card are not covered by the bill, which now must be reconciled with a similar house bill). MasterCard and Visa lobbied hard to prevent this move, while the nation’s largest retailers including Home Depot and Wal Mart lobbied hard for a cap. According to the New York Times:

Last year businesses paid Visa and MasterCard $19.71 billion on debit card transactions, according to The Nilson Report, a trade magazine that is regarded as the best source of data on the industry. Visa and MasterCard in turn passed about 80 percent of the money, roughly $15.8 billion, to the banks that issued the cards.

The legislation directs the Fed to cap those fees at a level that is “reasonable and proportional” to the cost of processing transactions. The Nilson Report estimated that last year, fees averaged 1.63 percent of the transaction amount.

A second set of provisions applies to both credit and debit card transactions. Visa and MasterCard impose an all-or-nothing requirement on businesses, requiring them to accept cards even on small transactions, and prohibiting businesses from offering discounts based on the method of payment. The amendment strikes those rules.

The fees for debit card transactions set by Visa and MasterCard vary based on complicated formulas that include the type of card, the type of retailer, and the amount of the transaction. Most of this fee goes to the bank issuing the debit card.  Issuing banks’ interchange fees are taken from the amount collected by the merchants when they submit debit transactions for payment through their bank.

What does potential change this mean for consumers? It could mean lower prices, because many retailers pass along the cost of interchange to consumers. But odds are retailers won’t pass on any savings.

Merchants would also be able to refuse card payments for small transactions and offer customers discounts for paying by cash or check.

Visa and MasterCard are arguing that the law will hurt consumers, because the the decrease in the money Visa and MasterCard makes from the fees would reduce the pool of money they have for funding cash rewards programs. We haven’t yet seen any analysis that this would indeed be the case.

Wal Mart Finder for Greendot MoneyPaks

We are often asked how do you find a Greendot MoneyPak at Walmart?

STEP ONE: Wal Mart Store Locator

First, find your nearest Wal Mart. Just drive a few miles because there are more than 4,000 locations nationwide.¹ Or use Wal Mart’s handy Wal Mart Store Locator.

STEP TWO: Locate the Greendot MoneyPaks inside the store

You’ll find the MoneyPak in the prepaid card section or on the Green Dot display, usually at the front of the store, or in the Wal-Mart MoneyCenter.

STEP THREE: Purchase and Load your GreenDot MoneyPak

Purchase and load your GreenDot MoneyPak with cash. A Greendot MoneyPak retails for $4.95 or less. So, let’s say you want to put $50 on your Prepaid Credit Card / Debit Card. You would give the cashier $50 + $4.95, or $54.95 plus tax, and your MoneyPak would then have the value of $50. Next you can call the Greendot customer service number printed on the MoneyPak or log onto Greendot’s website. You provide your prepaid card account number and the Moneypak’s unique identification number to complete the transfer.

The Greendot MoneyPak is a one-time-use card that you dispose of after you use it to load your prepaid card. It cannot be used again.

See our Loading Money with Greendot MoneyPaks or Western Union Agents information page.

¹Walmart is the world’s largest retailer with $405 billion in sales for the fiscal year ending Jan. 31, 2010. In the U.S., Wal-Mart Stores, Inc. operates more than 4,300 facilities including Walmart supercenters, discount stores, Neighborhood Markets and Sam’s Club warehouses.
Internationally, Walmart operates more than 4,000 additional stores in 15 markets worldwide, including Argentina, Brazil, Canada, Chile’, China, Costa

Are you wondering how how much oil has spilled into the gulf? PBS has created a great widget.

MiCash Prepaid Debit MasterCard

The New York Times reports that the leakage rate might be ten times higher than initial estimates.

In a closed-door briefing for members of Congress, a senior BP executive conceded Tuesday that the ruptured oil well could conceivably spill as much as 60,000 barrels a day of oil, more than 10 times the estimate of the current flow.

Get the code to paste into your blog and website:

<iframe src="http://www.pbs.org/newshour/rundown/oil-ticker/" height="300" style="align:center;" width="310px" marginheight="5" marginwidth="5" frameborder="0" scrolling="no"></iframe><br /><a href="http://www.micash.net" >MiCash Prepaid Debit MasterCard</a>

For the unbanked who want to get a checking account, it can be a challenge finding a banking education training program that can sometimes be a prerequisite for obtaining a “second chance checking account.” One such program, the Get Checking Program sponsored by the parent company of ChexSystems ended January 1, 2009.

Fidelity National Information Services Inc, a Jacksonville-based provider of financial services to banks and other lending institutions, apparently did not wish to keep the program going, even though it helped people who were on the ChexSystems list obtain a checking account after some training on how to avoid the problems that got them on the ChexSystems list in the first place.

A new nonprofit program, CheckingNetwork USA, would seem to hold promise as alternative, but 1 1/2 years after the demise of “Get Checking” little information is available to potential users. According to the group’s Facebook page, CheckingNetwork USA is a “…financial education, certification and checking account access program designed to help individuals without a banking relationship gain financial knowledge and access to mainstream financial products and services.” But the group only has 24 fans. and the page was last updated several months ago.

Some banks that offer “second chance checking” accounts offer financial education workshops. Similarly, some community colleges offer classes on financial literacy or education on how to maintain bank accounts in good standing and organize household finances.

Of course, many people who have trouble getting a checking account turn to prepaid debit cards as an attractive alternative.

A major benefit of a prepaid MasterCard from MiCash is how it helps keep money secure. Not only does the card help store funds and keep the money in it safe by providing convenient and easy cashless spending. These prepaid cards also have featured in them strong and reliable security measures in case a card is lost or stolen.

For example, if a MiCash prepaid debit card is lost or stolen, the card holder can easily contact the support team of MiCash with a phone call to report the loss. The card will be replaced, and the funds are insured under the Federal Deposit Insurance Corporation (FDIC). The card is also protected under certain conditions with the MasterCard Zero Liability Protection, to protect the card holder from unauthorized purchases.

These are some of the security measures inherent in the MiCash prepaid MasterCard. These give people the security and comfort of money safely kept away for the future.

Flickr photo by Sunfrog1

Here at MiCash several of the staff sometimes bike to work. This is only possible because Washington DC and Northern Virginia have a robust network of dedicated bike paths. In urban areas with reliable and extensive public transportation, including bike paths, subways, and buses, now more than ever it is possible to consider eliminating the need for a car all together, or at the very least, downsizing from two cars to one.

We’re not suggesting everyone can do this, but with some lifestyle adjustments, eliminating a car in your life can benefit you financially.

Cost Savings without a Car

In 2010, The average cost for a typical auto insurance policy, including collision and comprehensive coverage, is $1,031, reports AAA. This figure compared average rates for the top five best selling vehicles averaged nationwide. Of course, insurance rates also depend on the driver’s age, driving record, miles driver per year, and location. Insurance his generally higher in the city and higher for younger drivers who can least afford the costs of a car.

When factoring in other costs, such as car payments, maintenance, and gas, AAA found that the average annual cost to own and operate a sedan is $8,487 . That comes out to $707 a month.  Of course, that number could be much less if you drive a beater, or you only drive a few miles a week.

Still, there’s no escaping the fact that having a car is one of the biggest expenses for an individual after housing and food.

I Can’t Ditch My Car Because…

• I need it to get to work.
• I need it to go grocery shopping.
• I need it to go out on dates.
• I need it on the weekends to run errands or take trips.
• I need it to feel good about myself.

What are the Alternatives?

• Ride a bicycle…use one month of car expenses to buy yourself a really nice bike. Did you know you can even order one on the Web and it will be delivered to your house? Check your local area for bicycling information. Here’s a good information website to get you started.
• If you are the adventurous type, consider a motorcycle or Vespa instead of a car. The insurance is cheaper and you’ll pay only a fraction in gas costs. Also your cool factor will go up. If you’re single, your date can ride behind you, or just use her/his car when going out. Don’t think this will work? Listen how actor LA-based Tim Coyne has adjusted to life without a car on the Hollywood Podcast.
• Rent a car (or pickup) those few times a year you really need one. Companies like Enterprise maintain rental locations all across America that are not confined to the area around your local airport but actually in neighborhoods. Increasingly in many cities, like Washington DC, San Francisco, and Montreal, bike rental companies let you rent bikes that you unlock from a public bike rack and re-lock when you arrive at your destination. The more extensive the fleet and pick up locations, the better this works. Montreal just rolled out a huge network of bike rental kiosks, and more and more people are getting by without a car.
• Modify your shopping behavior… some people, especially busy urbanites, swear by Peapod and other grocery delivery options. Instead of the big weekly excursion to the grocery story, shop farmer’s markets and buy a few items at a time on your way home from work. Shopping locally will likely prove healthier too.

So go ahead and give it a try. If it doesn’t work for you after a little while, you can always go out and get another car.

ChexSystems, Inc. is a subsidiary of Fidelity National Information Services, Inc., a publicly traded company (traded on the NY Stock Exchange under the symbol FIS). You won’t find much information about ChexSystems, however, on the FIS website, no doubt because they don’t want to be contacted by angry consumers. ChexSystems was incorporated in 1985 and is based in Woodbury, Minnesota with the aim of helping financial institutions identify applicants whose bank accounts have been “closed for cause” such as insufficient funds or bad check writing and who may pose a risk for fraud or account abuse. It does this by keeping consumer records from participating financial institutions. To be sure, the service it provides does help banks avoid fraud and remain profitable. But it also makes it difficult for many people who have lost checking accounts be able to get a new account with another bank.

As a consumer credit reporting agency (CRA), Chex Systems must adhere to the Fair Credit Reporting Act (FCRA), enforced by the Federal Trade Commission.

According to the FDIC 87% of banks use ChexSystems to screen people before opening new accounts. Be cautious about the various websites that promote lists of banks that don’t use ChexSystems. In addition to charging you money for the list, often these lists are out of date, inaccurate, or woefully incomplete. In addition, banks may simply be using a competing list like Telescan or Telecheck.

Under Federal law, you have a right to know what is in your file from any CRA including Chex Systems. Simply submit a request in writing and the company will have to send you your file. You can order your report for free directly from Chex Systems. If you let the company know that a bank has denied you an account within the past 60 days because fo the ChexSystems list, you should be able to get your report for free. The standard fee is $8 for the report.

A grad student living paycheck to paycheck named John borrowed $50-$100 every month from the head of the University of Arkansas English department, Dr. Leo Van Scyoc, who was a beloved scholar and WW II veteran. As John’s employer Dr. Van Scyoc essentially granted him a payday advance at zero percent interest, out of his own pocket. John always paid back the loan when payday came, and he avoided the credit trap of payday loans.

Payday loans are notorious for their average high annual interest rates. According to the Consumer’s Union:

“Payday” loans are small, short-term loans made by check cashers or similar businesses at extremely high interest rates. Typically, a borrower writes a personal check for $100-$300, plus a fee, payable to the lender. The lender agrees hold onto the check until the borrower’s next payday, usually one week to one month later, only then will the check be deposited. In return, the borrower gets cash immediately. The fees for payday loans are extremely high: up to $17.50 for every $100 borrowed(1) , up to a maximum of $300. The interest rates for such transactions are staggering: 911% for a one-week loan; 456% for a two-week loan, 212% for a one-month loan.

So, if you like John, have a kind-hearted boss, you may be surprised to discover that he or she will help you out in a pinch. Of course, don’t abuse this privilege. When you get paid, pay back the advance.