Protect Your Prepaid Debit Card

iStock 000004652423Small1 150x150 Protect Your Prepaid Debit CardPrepaid debit cards have become a popular alternative to carrying cash. They are compact, protect your privacy, and involve no credit requirements.

According to TODAY Money, prepaid debit cards are great for a number of things, such as monitoring your children’s expenditures, traveling, or gift giving. This method of ready money has become so popular that in 2012 alone, consumers put an estimated $77 billion onto these cards. But with the convenience, comes heightened risks and fees. Banks charge varying amounts for issuing the card, reloading more money onto the card, and checking the balance of the card. As well, if the card is lost, you are likely to lose all the money loaded onto it.  If the card is stolen, there are fewer protections under the law than credit cards. Prepaid debit cards are not linked to a checking account, and therefore are much easier to turn into cash than debit or credit cards.

Even though there are risks, prepaid debit cards are still an easy and smart option for many consumers.  Experts suggest the following tips for how to make the card safe and financially sensible:

  • Pick a PIN.  Use a PIN on the card and keep that PIN secure.
  • Read the fine print.  Know the varying fees that the issuers of the cards are charging. Take the time to shop around to find the most reasonable.
  • Know the rules.  To minimize hassle and financial hit if your card is lost or stolen, know the process for replacing the card. Be sure to record the card number, security code and customer service number and keep it in a safe place.
  • Be return-ready: Do not dispose of your card until you are certain that you will not return any items you have bought. Some stores require money be deposited back onto the card during a return.
  • Keep a lid on it. Manage your risk. Do not load more money on the card than you would be comfortable losing.

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About Katie Burgoyne

I am the Communications Intern for the Council of Better Business Bureaus in Arlington, VA. I hail from Northern VA and am currently a senior at Villanova University majoring in Communications with a specialization in Public Relations.