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Posted
Sep 23 2009, 02:13 PM
by
Teresa Mears
Money Blog: Smart Spending Blog - MSN Money
Here's a small victory for consumers:
Bank of America and JPMorgan Chase are planning to overhaul their debit card programs, changing the way they credit transactions and allowing customers to opt out of overdraft protection.
We'd like to think they're doing it because that's what the customers want, but they might have been just a teeny bit influenced by moves in Congress to crack down on overdraft fees.
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Posted
Sep 11 2009, 07:13 AM
by
Karen Datko
Rating:
Money Blog: Smart Spending Blog - MSN Money
This post comes from partner blog The Dough Roller.
I can still remember my first ATM card. I was a teenager in high school when ATM and debit cards first arrived on the scene. I had a passbook savings account with our local bank, and they issued a debit card that I could use to make deposits and withdrawals to and from my account.
Taking money out of my account when the bank was closed was nothing short of amazing. But my ATM card of the 1980s was a lot different from debit and prepaid cards for teens today.
The most important difference was that it was not part of the Visa or MasterCard debit network. When ATM cards first came out, they could be used only at a bank automatic teller machine. I couldn't use the card at a store. And of course there was no Internet, so we couldn't check our account online, either. On top of that, the debit card didn't work with all ATM machines. You had to make sure that the ATM was on the same network as your bank, or the card wouldn't work.
With the advent of the Internet and the Visa and MasterCard debit networks, a whole new generation of financial products was born. And recently, companies have begun using those tools to market debit and prepaid cards and other financial products to teens.
Let's look at a few of those new financial products (some recently reviewed by Smart Money), and then I'd like to hear your view on these products.
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Posted
Sep 10 2009, 08:20 AM
by
Karen Datko
Rating:
Money Blog: Smart Spending Blog - MSN Money
This guest post comes from Frank Curmudgeon at Bad Money Advice.
I have a debit card. I think. It's the ATM card my bank gave me. It's got the MasterCard symbol on it, so I think that means I can use it to buy stuff. Of course, this is just a theory. In the 10 years it's been in my wallet I've never thought to test it out. Why would I?
I am going to admit right here that I am pretty obviously missing something when it comes to debit cards. Debit card transactions now outnumber credit card transactions. This mystifies me. I can think of only three reasons to carry a debit card rather than a credit card.
- You are considered a poor credit risk and cannot get a credit card.
- You can get a credit card but will not because of ethical or religious objections.
- You find it too difficult to overcome the temptation to borrow more than you should if you carry a credit card, so carry a debit card that will limit your spending to cash you actually have.
I can't get my head around how half the transactions in the country could be made by people in one of these categories. I know credit standards are tighter than they used to be, but I am sure that the vast majority of folks can get a credit card if they ask nicely. Ethical and religious objections can't cover very many more.
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Posted
Sep 08 2009, 11:00 AM
by
Karen Datko
Money Blog: Smart Spending Blog - MSN Money
Prepaid debit cards are rapidly taking the place of paper checks for all sorts of financial transactions.
A few examples:
- Wal-Mart, the nation's largest private employer, will stop issuing checks to employees who don't use direct deposit -- about half of its workforce. Instead, their pay will be deposited into a debit card account, our partner site ConsumerAffairs.com reports. (Those employees will get a checkbook just in case they have to pay a bill the old-fashioned way.)
- Social Security recipients who don't have bank accounts can get their benefits on a prepaid debit card.
- School teachers in New York City are being reimbursed for (some of) their out-of-pocket purchases for classroom supplies with a debit card now, rather than a check, says "Flexo" at Consumerism Commentary.
- Verizon is giving rebates on new phone purchases with a prepaid debit card.
Clearly there are some advantages to this:
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Posted
Jul 21 2009, 05:39 AM
by
Karen Datko
Rating:
Money Blog: Smart Spending Blog - MSN Money
This post comes from Jim Wang at partner blog Bargaineering.
This may be sacrilegious to say as a personal-finance blogger, but I've never been a fan of debit cards.
I'm biased, though. I think I prefer credit over debit because I've never been in credit card debt. I've never been on the business end of the tactics used by the credit card industry. I credit that to a fear that my mom would be angry with me, rather than my own self-restraint. But either way, I have never paid a penny of interest to a credit card company.
That being said, here are eight reasons why I think credit cards are better than debit cards, which I hope you'll enjoy arguing with me about in the comments.
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Posted
Jul 14 2009, 02:51 PM
by
Karen Datko
Money Blog: Smart Spending Blog - MSN Money
This post comes from Mark Huffman at partner site ConsumerAffairs.com.
It's hard to believe the nation's banks could be in such rocky financial condition, considering the amount of money they collect from their customers in the form of fees.
Charles, of Cary, N.C., says he's been a BB&T customer for five years, and claims to have spent more than $3,000 per year on overdraft fees.
"My last overdraft, which I ran 29 cents over in the account, cost me $200," Charles told ConsumerAffairs.com. "This is highway robbery and they know it and I know it. It's a shame no one has ... put a stop to this."
If someone were to put a stop to it, banks might be even less profitable. They clearly count on customers overdrawing their accounts and triggering overdraft fees. And those fees can add up to some pretty sizable sums.
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Posted
Apr 22 2009, 06:01 AM
by
Karen Datko
Rating:
Money Blog: Smart Spending Blog - MSN Money
This post comes from partner blog The Dough Roller.
Bank overdraft-protection programs at first glance seem like a great safety net to have in place. Should you overdraw your checking account, an overdraft-protection plan can kick in to cover the shortage. And because the bank cleared the check, you avoid insufficient funds fees that can hit $35 and the embarrassment and headaches that come with a returned check. Banks do charge interest on the money until you repay it, but for most, the interest charged is just for a day or two until the next payday.
The problem with these programs, however, is the ridiculous and often hidden fees that banks charge. We'll come back to the fees, but first, let's take a look at the types of overdraft-protection programs banks offer.
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Posted
Apr 01 2009, 08:29 AM
by
Karen Datko
Rating:
Money Blog: Smart Spending Blog - MSN Money
This post comes from partner blog The Dough Roller.
Lately I've become overwhelmed with clutter. Everything from my office to my home to my finances is filled with unnecessary stuff.
All this stuff creates stress and reduces efficiency. Just the other day my wife and I spent one hour searching for two bills that, as we eventually learned, were at the bottom of a pile of stuff on our kitchen counter. And now I am just plain fed up with all this clutter.
So I've started embracing what Leo Babauta (famed blogger of Zen Habits) calls "The Power of Less." In his new book of the same title, he describes "the fine art of limiting yourself to the essential ... in business and in life."
That's what I'm trying to do, beginning with our finances. Here are 10 tips to help you de-clutter your finances:
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Posted
Mar 31 2009, 08:40 AM
by
Karen Datko
Money Blog: Smart Spending Blog - MSN Money
This post comes from Jim Wang at partner blog Bargaineering.
Banks offer a lot of services and features. You probably know most of the popular ones. Heck, you probably know most of the not-so-popular ones.
However, I am pretty certain that there is at least one thing on the following list that you didn't know about before. And if I'm wrong, I invite you to look at these "7 unwritten and often forgotten credit card secrets," and hopefully between the two you'll learn something new that will save you some money in these difficult times.
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Posted
Mar 26 2009, 03:21 PM
by
Karen Datko
Rating:
Money Blog: Smart Spending Blog - MSN Money
Raise your hand if you've been socked with a big overdraft fee because of one tiny debit card purchase. Yep, we figured. It's more common than some of you may think.
Rather than denying the purchase, the bank lets it go through so it can ding you with a fee that often approaches $40. If you're unaware that you've overdrawn your account, you could face hundreds of dollars in fees.
Now is the time to demand an end to this practice. You have until Monday (March 30) to register your complaint with the Federal Reserve.
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