Big Banks and Prepaid cards

[treehugger1]

For those of you with a concern related to banking after judgments and debtor examinations, a friend of mine sent me some info related to prepaid cards through the big financial insitutions.

BoA has a prepaid visa account that works off of direct deposit only. I think the original plan was to offer the prepaid service to payroll departments and government pay systems. It now seems that anyone can apply. BoA apears to consider the prepaid card as an account. Search BoA prepaid payroll cards.

Cap1 now has a regular prepaid debit card for customers who have trouble getting traditional bank accounts. When I read the terms, C1 claims that this prepaid card is not considered an "account" of any kind. C1 does not pull a credit report.


The fees on these prepaid cards appear to be significantly less than the run-of-the-mill prepaid cards on the market (accountnow, ready, netspend, WU, etc.) I guess the banks want in on the prepaid action.

I wonder if there is any issue applying for and using a prepaid card from a financial institution you defaulted on with several (as an example) credit cards. I' guessing that the bank could probably care less. I think they only care about increasing revenue, so they probably want the business, regardless of your past account history. Then again, there may be no connection made between your past actions and future actions related to some prepaid card.

If you want more info google prepaid debit accounts and include the name of the national bank.

[catleg]

My devious thinking on this subject is, if a prepaid card has recurring deposits to it, then they can charge you a penalty for overdrafts with a reasonable likelihood of getting paid, so long as the amount they put at risk is small (say, just a few dollar overdraft). With a recurring payment stream the money is probably gone before you realize it.

I noticed that when I had an Amex they permitted you to go over your limit by about $100 or maybe 3% in order to try and ding you for a $35 fee. It's a gamble whether you'll pay it or default, but for small dollars it's probably very lucrative for them.

[WhatMoney]

I wonder if there is any issue applying for and using a prepaid card from a financial institution you defaulted on with several (as an example) credit cards. I' guessing that the bank could probably care less. I think they only care about increasing revenue, so they probably want the business, regardless of your past account history. Then again, there may be no connection made between your past actions and future actions related to some prepaid card.

If you want more info Google prepaid debit accounts and include the name of the national bank.

I would think the debit cardholder agreement would spell out whether setoff might apply to the new card and old unpaid CC accounts. Federally chartered banks are forbidden from using checking account setoff against their credit card accounts. Not sure if there is a ruling on debit only accounts, or "non-accounts". I would not be comfortable having a debit card account with a smaller local bank or credit union that I also defaulted on a loan or credit card.

[GoingDown]

I use the Wal-Mart Money Card which I noticed is associated with one of the creditors I had a charged off card with, but so far (and I'm talking years here), no problem with them at all.

Granted, I only put as much money in as I need to pay certain bills online, and then I immediately come home from Wal-Mart and go online and pay those bills. I would never put a lot of money on this card. I don't use it as a storage account. I just use it for convenience. And I think it is safer than having a checking account.

I think that once again, the left hand of banks doesn't know what the right hand is doing. I doubt that the old charged off account (which has now been bought by a junk debt buyer) will ever figure out that I have a Wal-Mart Money Card.

If I had direct deposit, I would try to find one that had no relationship to any of my charged off debt.

Or if it was government money, like SS, I would just get a debit card from the SS program.