Reloadable Debit Card : The Benefits

By: EW Content Team   Date: 30 January 2010

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EW Content Team

The core team focusing on economics, industries, investing, businesses & personal finance.

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A reloadable debit card works in much the same way as a normal debit card, you can only spend as much money as is available. However, instead of the card pulling money from your bank account, you decide how much money to load the card with when you buy it. Once you run out of money then you can add more funds and be able to use the card again at the store you purchased the card at or online.

One of the biggest benefits of a reloadable debit card is the ability to pay no interest and severely limit your fees. None of the current issuers of these debit cards charge interest because these are not credit cards, so the rules of a credit card do not apply. For the most part you can avoid fees as well since there will not be any non-sufficient funds or annual fees.
However, you should review all the terms of the debit card agreement since some issuers do charge some fees. Some issuers may charge an overdraft fee of up to $30 if you accidentally spend more money than you have available, and you still have to repay the amount you over drafted the card. If you lose the card, several issuers will charge you a replacement fee, which is usually under $10. A majority of issuers will also charge a one-time charge when you purchase the card which is also normally under $10.

Getting a reloadable debit card is a huge benefit to those on a fixed income who don’t make enough money to get a regular credit card or those with credit problems who can’t get a credit or debit card normally. Because these debit cards allow you to have the benefit of credit without worrying about getting yourself into a lot of debt. This debit card will allow you to spend only as much as you need and keep your finances in good order. They are also available nearly anywhere you could want to buy something. Retailers like Walgreens and Target sell them, as do all of the major credit companies. Once you have a reloadable debit card then you simply need to call, go online or go into the store to increase your balance.

One of the best ways to use these debit cards is to keep one in your home as an emergency cash supply. Let’s say that your payday is on a holiday, and the bank will be closed for a few days. That is a very bad place to be in if you need to buy groceries, put gas in the car or pay bills. But if you have an emergency card around then you will have all the funds you need until you can get your check put in the bank.

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