Prepaid Card Transaction Fees and Charges
Prepaid card Transaction Fees
Fees on prepaid cards.
Most prepaid cards will charge some sorts of fees for holding or using them. The kinds of fees and the amount charged vary depending on the card and how you use it. Unlike credit cards where the terms and conditions must be disclosed in advance, there are no such regulations which force card issuers to disclose fees before purchase. This means you need to read your cardholder agreement to understand what fees you will face when you start using your card.
Why do prepaid cards charge transaction fees? The reason is simple. Banks and other prepaid card issuers are commercial organisations, and they are there to make a profit. Unlike credit cards which carry a hefty interest charge, a prepaid card is closer in nature to cash, which has a minimal cost per se. The card issuers need to recoup the cost of issuing and maintaining the cards, and they need to make a return for their shareholders.
There are a number of common fees which can be found with most cards. Some of these may be waived in certain circumstances, and the list is not exhaustive. A 2016 survey, for example, found that in 7 out of 10 cases, the prepaid card did not fully disclose their fee structure.
A monthly fee is a standard fixed fee which is paid every month, even if the card has not been used. Such fees are normally deducted automatically from the balance on the account.
A transaction fee is charged every time you use the card. This might be for all transactions or certain types. Some cards bundle these fees into a single monthly fee, whilst others will let you choose between individual transaction fees and a monthly charge. There are also pay as you go options on some cards where cards are only used occasionally.
ATM fees are common. Some cards will charge you for using an ATM regardless of who owns and operates the ATM. More commonly, as with normal debit and credit cards, if the ATM belongs to your bank or card issuer, then withdrawals are free, whereas there is a transaction charge if the ATM belongs to another bank or network.
If you check your balance at an ATM or ring a customer service helpline to enquire about the balance on your card, some issuers will charge you a fee for doing this. Checking online for free is usually a good way to avoid this service, and some card issuers will send free weekly or monthly email or SMS text confirming your balance.
If you want to get a paper statement showing your transactions, you may get charged a fee for this - some card issuers would have you believe they are doing this to show their green credentials but don't you believe it! They are trying to make money, plain and simple. You may be able to avoid such a cost by getting an online statement instead.
Some prepaid cards let you pay bills online using the card providers website, and then charge you a transaction fee every time you do so. Think carefully before you do this, however, as it can often be cheaper to pay the supplier, utility company or vendor directly.
Some cards will even charge an inactivity fee; even if you haven't used it for some time, you may still get charged.
There are other types of fees such card replacement, additional card, and card-to-card transfer fees, but the list above covers most of the charges you are likely to see with prepaid charges. Remember that no two cards are alike and read the small print very carefully before you sign-up to anything. Prepaid cards are very convenient, but they could cost you more than you expect.
Choosing the Best Prepaid Card based on Transaction Fees and Charges. This is a major point to consider when getting your prepaid card as if you plan to use it on a regular basis it could end up costing you the earth if you are not careful due to transaction charges and ATM fees, always look at the list of fees applicable to the prepaid credit card before you purchase and not just because it was a free prepaid card.
Whatever is your cause of having a prepaid card, you can be sure of its benefits and reliability in buying groceries, paying your bills, or your kid’s school fees. However, the comfort that comes with a credit may become a headache in the long run, as you have to pay your bill in the month end and each time you will be surprised to know how much you have spent.
Hence, opting for a prepaid Visa credit card is highly beneficial. This card is getting increasingly popular these days. More so, several firms have already been using prepaid visa cards for payroll purposes.
Prepaid card charge fees
But yes, you need to be cautious, as it is not a recharge card that you can keep using continuously. It has a specified amount of credit balance. On the contrary, using these visa cards can help you keep a check on money spent for frivolous things.
So if you consider yourself as an impulsive buyer, then getting an ideal prepaid credit card is the right choice towards altering your excessive spending habits. While a prepaid credit card operates same like the credit or debit card, it works a little differently.
The visa prepaid card can only be used if you have deposited some amount onto the card. The best part is that this credit card is free of interest so you do not have to worry about any additional charges while making financial transactions. But remember you have to pay for the prepaid visa credit card as it is not offered for free. On the web, compare the costs that come with each prepaid visa credit card.
More than anything else, choose the best prepaid credit cards based on usage charges and not because it had no application fee as it could end up costing you three times as much just to spend the money you have loaded on to the prepaid card and then you will end up applying for a new card to see Prepaid card charge fees.