Prepaid debit cards can be difficult to differentiate from credit and debit cards, except for the high fees. Image: mecklenburg / Flickr / CC BY

It has been a few months since new card fees, banking rules and overdraft regulations went into effect. Some of the biggest banks are exploring prepaid cards as a way to recapture income lost from new fee limits. Prepaid card associations are lauding the product as a great alternative, while consumer groups are warning that they can be very expensive.

Growth in the prepaid card market

Between 2005 and 2009, the number of active users of prepaid cards grew from 700,000 to 3.4 million. The growth of the market is expected to continue, according to the Wall Street Journal. By 2014, prepaid cards are expected to have 7 million users. These numbers do not include payroll cards, which are very similar to prepaid cards. Combined, the prepaid card market could account for more than 9 million customers in the United States.

The argument for prepaid cards

The majority of prepaid debit cards are offered by non-bank businesses. The cards are often marketed in stores offering instant payday loans, convenience stores and grocery stores. Many big-box stores such as Walmart and Target offer branded prepaid cards. A report issued by Bretton Woods Inc., a consulting firm hired by the Network Branded Prepaid Card Association, argues that customers of prepaid debit cards will pay less than half the fees of consumers with standard checking accounts. The report also lauds prepaid cards as a money-management tool, as users can only spend what is loaded onto the card. Prepaid debit cards also offer an alternative for customers who do not use a traditional bank.

The argument against prepaid cards

A report by Consumers Union, the publisher of Consumer Reports, says most prepaid cards tend to be more expensive than checking accounts. Nine of the 12 cards studied were more expensive than the five comparative checking accounts. Checking account fees range from $0 to $438 per year, depending on the products and services used. Prepaid debit cards charge fees range from $18 to $606 per year. The analysis also highlights that most pro-prepaid studies assume that all checking accounts charge overdraft fees. However, since Dodd-Frank consumer protection laws went into effect, only about 22 percent of checking customers have opted into overdraft protection. In short, prepaid cards can be more expensive than traditional checking accounts. Prepaid cards can be helpful for customers who cannot get bank accounts, but card applicants should keep a close eye on the fees.

Sources

Consumer Reports
Bretton Woods
Wall Street Journal

U.S. Cellular, a mostly regional cell phone carrier in the Midwest, ranked number one for cell phone carriers in a Consumer Reports survey. Image from Wikimedia Commons.

Recently, Consumer Reports unleashed its rankings of cellular service providers, and U.S. Cellular came out on top. Oddly enough, AT&T, which carries the iPhone, was rated the worst of major providers. However, Apple disciples can rejoice as the iPhone was one of the best-rated smart phones.

US Cellular rated the best, serving mostly Midwest

U.S. Cellular, in the annual Consumer Reports cell phone survey about carriers and models, was rated best cell phone carrier, according to Computerworld. The small carrier, with about 6 million subscribers in 26 states mostly in the Midwest, scored an 82 out of 100. On the other hand, the mighty fell drastically, with AT&T rating only 60 out of 100. AT&T received less than 60 points on average with consumers in nearly all major metro markets. San Franciscans seemed to hate AT&T’s guts, as the carrier received a 52 out of 100 overall from the city by the bay. Verizon and T-mobile both lost a point since the same survey last year, dipping to 74 and 69, respectively. Sprint climbed to 73 to claim third overall.  AT&T was raked over the coals by consumers for poor reception, data access, dropped calls and customer service.

iPhone rated among best smartphones

The survey of about 58,000 consumers also rated smartphones. One of the best-scoring smartphones was the iPhone 4, which received a score from consumers of 76 out of 100. The iPhone tied for first with three other smartphones, all Samsung phones operating on Android. The three Samsung models were the Samsung Captivate, Epic 4G and Vibrant models. A brouhaha developed earlier this year between Apple and Consumer Reports, as Consumer Reports listed the iPhone 4 as a model of smartphone the organization did not recommend buying.

AT&T responds

AT&T immediate fired back, saying that the company is committed to quality and is going to set about changing its image in consumers’ eyes. It appears that the company has a lot of work to do for that to happen.

Sources

Computerworld

What are the minimum requirements?

If you have a valid social security number and a steady job, you may qualify for easy cash loans. Online payday lenders typically require that you:

• Have a valid social security number
• Be at least 18 years old
• Have a permanent street address
• Be currently employed
• Be employed at your current job for three to six months, depending on the lender
• Have a minimum income of about $1,000 a month, depending on the lender
• Have a valid bank account with direct payroll deposit

What about credit checks?

One of the main goals of payday lenders is to provide short-term credit to people who might not otherwise be able to meet lending standards because of credit problems. Credit reports are rarely required for easy cash loans, although many payday lenders do obtain consumer reports from Teletrack.

What is Teletrack?

Teletrack is a consumer reporting agency operating under the Fair Credit Reporting Act, the same federal law that governs the three major credit-reporting agencies. The consumer information provided by Teletrack is obtained from payday lenders, rent-to-own businesses, furniture stores that provide financing, cable and telecom companies, non-prime lenders and credit unions.

Will a Teletrack report show up on my credit history?

Unlike reports from Equifax or the other major credit-reporting agencies, a consumer report from Teletrack will not show up on your credit report and will not affect your credit score. Payday lenders use Teletrack to verify the information provided by borrowers and to avoid fraudulent applications, but they don’t use them to access credit histories or to determine credit scores.

Should I apply?

Yes! What is there to lose? Remember that payday lenders are in the business of making easy cash loans to people with credit challenges just like yours. Some lenders even offer installment loans for bad credit. When you apply at Personal Money Market, you’ll instantly be matched with the best payday lender for your needs, and you’ll find out right away whether your application is approved. If you meet the lender’s minimum requirements and your application is honest, chances are good you’ll soon have the extra cash you need.

Apply for Easy Cash Loans | Start HERE!

Image from flickr

Although many people are not aware of it, the medical industry is one of the few American industries where negotiating the price is not only acceptable, but common. The reason many uninsured or underinsured people are quoted higher prices than insured individuals is because the price for many services has already been negotiated down by the insurance companies and HMOs. However, this practice is not limited to major institutions. Individuals can — and do — negotiate the price for particular services on a regular basis and this can result in significant savings.

Negotiating can save you up to 60 percent

According to Consumer Reports, only about thirty percent of Americans even try to negotiate with medical care providers; however, of those who try, 93 percent are successful at least once. The average savings are between thirty and sixty percent of the original amount owed, though there are many stories of people saving as much as ninety percent through effective negotiation. There are no guarantees that negotiation will get you a discount, but experience shows that most people who make the effort are successful to some extent.

Step One: Negotiate in advance

The first step to negotiating medical expenses is to negotiate terms in advance for planned medical visits and examinations. Due to problems with delayed payment, many medical service providers offer “prompt pay” discounts that can reduce your medical bill by as much as ten to twenty percent. These discounts are usually reserved for those who are able to pay for planned medical services at the time of the visit. However, many providers will also offer a prompt pay discount to those who are able to make large, although partial, payments on the spot.

Step Two: Talk to the CFO

The next step is to speak with the provider’s Chief Financial Officer (CFO) after you have received your bills. More often than not, just asking the CFO for a discount will get results. However, to do this effectively you have to know what is reasonable from the provider’s point of view. For this reason, you should know the average cost in your area for the services provided and you should ask for a price in that range. You can find out what the normal charge for various services is by looking at websites like Healthcarebluebook.com and many insurance company sites.

Step Three: Discuss payment options with the billing department

If you get a discount from the provider’s CFO, you probably will not be able to negotiate further discounts from the billing department. However, you may be able to negotiate an interest-free payment plan. The interest that accrues on medical expenses paid over time can be significant. Negotiating a payment plan that does not include interest will greatly reduce the amount you ultimately pay.

You have nothing to lose and much to gain

Contrary to the impressions of many people, most medical service providers are willing to negotiate and rarely expect everyone to pay every cent originally charged. In fact, many providers specifically budget for a lower repayment than they initially bill. For the consumer, there really is nothing to lose by trying to negotiate discounts and reasonable repayment terms. The worst case scenario is that the provider will refuse to grant a discount. But negotiating is worth the effort. As Consumer Reports has documented, 93 percent of those who try do in fact get a discount.