Think You Cannot Overdraft a Prepaid Debit Card? Reconsider That Thought
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For most people, one of many tourist attractions of a prepaid bank card is the truth that, unlike a bank checking account, they believe they have actually no potential for overdrawing and triggering hefty overdraft costs.
However the Consumer Financial Protection Bureau simply included strict limits to those costs beginning in October 2017. That may come as a shock to customers whom don’t also understand their prepaid cards could ever overdraft.
It is a big modification because of this industry that is burgeoning. About $65 billion had been packed on prepaid debit cards in 2012, significantly more than double the total amount in ’09. Together with CFPB estimates that quantity shall increase once more by 2018.
The cards are commonly offered at shops such as for instance Wal-Mart and 7-Eleven, plus on the web and in payday lending and look cashing places; and impress mainly towards the “unbanked” — people who for example explanation or another abandoned their bank checking account, had it canceled, or never ever got one out of the beginning.
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“customers looked to prepaid cards to have their lives that are financial purchase and prevent your debt very often comes from overdraft costs,” stated Thaddeus King, an officer for Pew’s customer banking task.
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