Think You Can’t Overdraft a Prepaid Debit Card? Reconsider That Thought

Think You Can’t Overdraft a Prepaid Debit Card? Reconsider That Thought

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For many individuals, one of the car title loans most significant tourist attractions of a prepaid bank card is the reality that, unlike a bank checking account, they believe they have no possibility of overdrawing and triggering hefty overdraft costs.

Nevertheless the customer Financial Protection Bureau simply included limits that are strict those charges beginning in October 2017. That may come as a shock to customers whom did not also understand their cards that are prepaid ever overdraft.

It really is a difference because of this burgeoning industry. About $65 billion had been packed on prepaid debit cards in 2012, significantly more than double the total amount last year. And also the CFPB estimates that quantity will increase once more by 2018.

The cards are commonly offered at shops such as for example Wal-Mart and 7-Eleven, plus on the internet and in payday lending and look cashing places; and allure mainly to the “unbanked” — people who for just one explanation or another abandoned their bank checking account, had it canceled, or never ever got one in the beginning.

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“customers looked to prepaid cards to have their monetary everyday lives in purchase and give a wide berth to your debt very often comes from overdraft charges, ” stated Thaddeus King, an officer for Pew’s customer banking task.

Typically, prepaid debit cards happen like cash: Once it’s gone, it really is gone. Continue Reading