Say No to Credit Card Fees with a Prepaid Debit Card
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If you're paying any attention at all to the financial news nowadays, you know that credit card companies are starting to come under the microscope. For years they've had their way with their customers. They've been able to set and charge fees with virtually no oversight - and many of these fees have been difficult to understand if not outright hidden.
The financial climate is changing though. Consumers are waking up to the reality that they have little or no control over what credit card companies do and that they (the consumers) have to find alternatives that are more customer-friendly. One of those more customer-friendly alternatives is the prepaid debit card. A prepaid debit card can actually help you get free of your credit card fees.
If you make the commitment to using a prepaid debit card in place of a credit card, you can begin to replace one with the other. Over time, you can make all your usual credit card purchases with the prepaid card and stop using the credit card altogether. Then you can set up automatic payments on the credit card and lock it away somewhere.
If you do that, you'll never have another late fee again. Credit card companies love to charge late fees. In 2008 over 19 billion dollars was raked in by these companies for their various "penalty fees." That's a lot of dough, especially when you consider that in some cases the companies manipulate their billing practices to put the consumer in a position to incur these fees. Here's an example.
Let's say your credit "limit" is $1,000.00. You would think that you couldn't charge more than that and if you tried your card would be declined. You'd be wrong. In reality, that's a soft limit. Credit card companies are perfectly willing to let you charge beyond it so they can tack on a $25.00 or $35.00 over-limit fee to your bill. Then they can get tricky and send you a bill with a minimum payment that will bring you just under the limit - but not when you calculate in the monthly finance charge. In other words, you make the minimum payment, think you've dropped below the credit limit, the company tacks on its finance charge, and bang - you're back over the limit and you're getting a second over-limit fee. Pretty slick huh?
Prepaid cards don't come with tricky monthly finance/billing cycle calculations either. These are the computations the credit card companies make to determine how much they're going to charge you to carry your balance from one month to the next. There are actually 6 or 7 different ways these charges can be calculated and everyone is designed to yield the highest return for the company based on your spending habits.
Another great (and hidden) fee the credit card companies receive is the interchange fee. These are pretty much secret fees that businesses pay the companies to cover the actual credit card transaction costs. Then of course the businesses pass the expense onto their customers by charging higher prices. There are some estimates that say consumers pay about $2.00 in interchange fees for every $100.00 they spend with a credit card. That $2.00 adds up to tens of billions every year for these companies.
These are just a few of the reasons why switching over to a prepaid debit card can benefit you as a consumer. Let's face it; the credit card companies have almost all the leverage. About the only options we have left is to cut our losses and prevent them from preying on us in the future. So if you're in a position to do so, I invite you to take a good long look at prepaid debit cards and see how they can become your sensible, more consumer-friendly alternative to credit cards.
Article Source: Articlelogy.com
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