Reloadable or Prepaid Debit Cards Are A New Way To Bank

Banking regulations adopted recently under Bill Dodd-Frank financial reform has created a serious situation for the banks that issue debit cards to check their account holders. Under the regulation, the fees charged to merchants by banks or corporate credit cards for debit card transactions must be reasonable and commensurate with the cost of processing these transactions. In other words, the banks that issue debit cards will be forced to give up tens of billions of dollars in revenue. Unfortunately, it is the consumer who bears the brunt of this so-called reform. The merchants will not be required to lower their prices, so the windfall will go straight into the pockets of merchants. The consumer, that of protecting, will now be charged more money and be more annoyed at the bank, he is with.

Banks must find a way to replace lost income, so basically they will do several things. First, they will reduce the amount of low current account balance on their books, essentially closing these accounts now unprofitable. Second, they need the account balances much higher to be maintained by insisting that consumers keep $ 1,000, $ 2,000 or more in a combination of accounts. In addition, they will not be removing monthly account fee, even if they use the debit card several times each month. Finally, it comes as many large banks limit the amount that can be debited from a card in an individual transaction. Their actions is designed to reduce losses and increase revenue.

An estimated 60 million people are currently not receiving financial services through a bank or credit union. This figure will increase dramatically over the next year. Visa and Master Card Recent studies show that over 69% of transactions processed by these companies are transactions by debit, not credit cards transactions. The trend is clear. People are turning to debit cards in greater numbers, but they run the risk that their costs for the banking sector will now increase dramatically, and that their problem will skyrocket.

Reloadable debit cards, prepaid or are becoming a major force against this onslaught of consumers. There are several major players in this industry, but in many cases the cost to obtain, maintain and use these prepaid cards is very high. Be aware of cards that are very high monthly maintenance fees, have an initial cost to buy them, and have high transaction costs. You will not find a card that is free. Debit cards do not exist free. However, if you do not need to maintain a current account, love online banking or telephone banking, direct deposit from one or more sources, a prepaid debit card to be a major blessing for those who need them.