Mar 24, 2014 Sean Albert
Although prepaid cards were once viewed by some as an obsolete option for paying bills, citizens throughout the United States are beginning to use them for that end. Banks and other financial institutions are issuing the alternative form of consumer credit data to offer flexible services to new customers.
Making it a regular practice
Time magazine reported that Bank of America (BofA) recently launched its SafeBalance account, signifying a more widespread acceptance of prepaid debit cards. The source reported that there's no minimum balance or direct deposit threshold and customers can't overcharge. Overdraft fees are the most lucrative revenue sources for many financial institutions, but it is also the most abhorred for many. For this reason, it has been speculated that the bank implemented this policy to eliminate some negative connotations associated with the alternative credit.
The organization's customers won't receive paper checks, but they can use BofA's online, mobile, ATM and retail banking systems while receiving consumer credit data protection the average citizen doesn't receive. The monthly fee for participating in the program is $4.95 monthly.
But it's the elimination of overdraft fees that is making this system appealing to a number of consumers. Time noted that Susan Weinstock, director of the Safe Checking Project at the Pew Charitable Trusts, claimed that people experiencing hard times are often drawn to the practice because they know they won't be punished for going $20 over the limit.
Providing an alternative checking account
Sometimes, the financial mistakes constituents have made in the past follow them for the rest of their lives, even if they've completely changed their fiscal strategies. According to the Journal Sentinel, Chris Espinoza, a California resident who let his youthful recklessness get the best of him, claimed that banks in the La Habra area wouldn't issue him a bank account.
Searching for alternative credit data, Espinoza started using American Express' Bluebird prepaid card, allowing him to use direct deposit, online bill pay, check deposits and other mobile applications.
"Doing everything with cash was hard," he told the news source.
The article stated that the Center for Financial Services Innovation found that the reusable prepaid credit and debit card industry grew by 28.5 percent in 2011, just after a residual wave of the Great Recession hit the U.S. Officials from the Consumers Union told the source that the search for an alternative credit score was largely instigated by the financial fallout and that the subsequent effect of the resulted in tarnished monetary reputations.