Prepaid debit cards can be a great way to limit your spending, teach teens about living within a budget or to avoid bank overdrafts but there are some important things to know about them. What are the activation costs? Can it be refilled? Can it be used like a credit card? Is there a monthly fee? I have gone both routes with Green Dot; I purchased one in-store and loaded it through a Coinstar machine (counting fees applied at the time). I also used the ‘free’ online form to request a card and received it in about two weeks. While the initial card is free, you will still have to pay the load fee in order to be able to use it.
Green Dot is one of the most recognized prepaid cards available in the United States; it carries the Visa or MasterCard logo and can be used at all POS (point of sale) terminals that accept those two cards. The cards are backed by Synovus Bank and Green Dot is a publicly traded stock (GDOT) on the New York Stock Exchange. There are restrictions that you need to know; if you are renting a vehicle you may not be able to use your Green Dot card because there would be no way to reclaim cost or damages incurred on a rental. Likewise, certain hotels will not accept it for the sale reason; if there are room service charges, long distance charges or movie rentals that need to be put on the card it might not approve it if there aren’t enough available funds.
Green Dot Fees: In addition to the amount taken from your card for purchases and amounts charged by the owner of the ATM (automatic tell machine), the following fees apply to buying, activating, using and recharging the card
When purchased in store, the Green Dot card can cost anywhere from $4.95 to $19.99 plus what ever amount you are adding to the card. The card inside the pack is a temporary card but it can not be used at ATM’s, you will have to wait for your personalized card to arrive to use that option. Most stores will only accept cash for these transactions to limit credit card fraud. There is a $5.95 monthly service fee but there are ways around that. They are not practical but Green Dot uses the options to soften the blow of the fee. To avoid the monthly service charge you can load $1,000.00 to it or have at least thirty transactions (purchases). There are restrictions to the purchases so you are going to want to read the list when you get the card in the mail. When you reload your card at an authorized payment and processing center you are charged $4.95 regardless of the amount; if you opt to have your paycheck directly deposited to your card account there is no fee. This includes military payments, SSI / SSD and other government check.
Green Dot claims to have over 20,000 MoneyPass+ ATM’s that can be used to withdrawal funds; you are going to want to read the information packet that you get with it in order to make sure you are using an authorized machine. Even then, I have had a couple of instances of being assessed two or three dollars to use the machine even when it was on the list of machines. Green Dot will charge your card $2.50 for unauthorized ATM withdrawals or bank transactions but you are also going to have another fee from the machine and / or bank. To replace a lost or stolen card, you will have $4.95 deducted from your card; you can request a free Prepaid Student Card that is attached to your primary card but if you simply want a second card with someone else’s name on it, there is a $4.95 fee.
To apply for the card you need to provide your complete name, address, phone number, social security number and date of birth. From my point of view, the whole point of buying and using a prepaid debit card is to avoid identity theft. Handing over sensitive information is something that you need to consider before you apply for the card or purchase one in a store. If you are getting the card online you simply fill out all the information, choose which card you want (MasterCard or Visa) and wait for it to arrive. Your card is not going to have a balance on it; when it arrives you have to activate it using one of the two phone numbers you used during the online registration. You do not have to disclose your employment information but you do have to be at least 18 to apply for the card.
You can use your Green Dot almost anywhere the Visa or MasterCard logo is displayed; if you are going to purchase large ticket items you are going to want to call to make sure that there isn’t a daily spending limit on it. Likewise, know up front that if you have any problems with your purchase you are not going to get the same type of customer service assistance that you would with a credit card or a bank issued debit card (attached to a checking account). I have had a couple instances of my card being declined even when there was more than enough money on it. A clerk was thinking about getting a card and I laughed. I called the balance inquiry line and let her hear the amount that I had available on the card. I was making an $8.95 purchase and it was declined even though the automated system said I had a balance of over $150.00. She quickly changed her mind about “going Green Dot”. If that were an isolated incidence I wouldn’t have cashed out my card but when it happened a fifth time I knew it was time to move on.
There are some true pros and cons to the card, you have to read all of the information and details of it before you decide to get one and activate it.
Pros of Using A Green Dot Card: They are accepted almost everywhere MasterCard and Visa logos are shown, can be used at ATM’s, can be reloaded almost everywhere including grocery stores, Coinstar machines and Western Union / Fast Pay centers, no overdraft or overcharge fees.
Cons of Using A Green Dot Card: Possibility of purchases being declined, no auto rentals, a lot of fees, dodgy customer service, no consumer purchasing protection.
An inexpensive alternative to getting a Green Dot card is to call your bank. Almost all of them offer true no-fee prepaid cards. Most of them do not offer a personalized card but there are no fees to get it or use it to make purchases. You do have to allow for about five minutes to fill out the information needed; some banks will ask for more information than others especially if you are loading an amount of $250.00.
Sources:
https://www.greendot.com/greendot/getacardnow/cardholderagreement
http://ir.greendot.com/phoenix.zhtml?c=235286&p;=irol-irhome
https://www.synovus.com/
