Part of the attraction to prepaid debit cards is the ease in which consumers can use them. The lower fees, absence of interest rates, and of course, the ability to direct deposit your money are all great reasons to consider a prepaid card.
Many are still unsure of how direct deposit works, especially how it works with a debit card that’s not attached to a checking or savings account. Here are a few tips to help you better understand these gems and we’ve even thrown in a few recommendations for some of the best prepaid products on the market today.
Perhaps the most important element of direct deposit is the habit it creates. Unlike a habit of having two bowls of ice cream each evening, these strong financial habits are ones you want to cultivate. Many of us already have our bank accounts set up to put a portion of our salaries into a savings account.
It’s the same concept – you set it up to serve as a tool to ensure you’re saving a portion of your salary; setting up direct deposit for a debit card eliminates the need for you to go to the bank each week. It simply is already done for you. It saves a massive amount of time and there’s always a record that doesn’t include a stack of deposit slips you must keep up with.
A Few Tips
Of course, your first priority is to ensure your employer offers direct deposit. If you receive any type of government payments, direct deposit is the preferred method for these types of pensions and programs. Also, most employers now offer – and even prefer – direct deposit as part of their payroll processes. It eliminates the need for so much paper (good for the environment) and also eliminates the potential for error (even better for you).
It’s usually faster, too. In addition to make it easier for you to save, using direct deposit will save you time and money. Rather than having to go to the bank each time you get paid, and wait in line to deposit your check, the funds are available to you immediately. There is no risk of losing your check and for most of us, the most important perk is there is no danger of cashing your check and spending too much on impulse buys.
Ask your payroll or human resources department if direct deposit is an option. If it is, they will provide you with the authorization form. You’ll just need to fill it out with the bank’s information, your account number and other information. You’ll also need to provide the bank’s ABA number, which you should be able to find on your debit card’s website.
A quick note: Most of the time, you can even set up direct deposit to allocate to two or more accounts. This is a great option for some since it allows them to build their savings effortlessly. Others like the idea of moving funds to their retirement accounts. If you already have direct deposit set up for any of these accounts, all you’ll need to do is change the specifics so that you’re moving funds to your prepaid debit card.
Another important tip: It may take a couple of pay cycles for your direct deposit to kick in.
Here are a few choices to consider if you’re thinking a prepaid credit card is right for you.
The READYDebit Platinum credit card offers a very low fee solution that really allows you to take control of your spending. No worries about overdraft fees since you spend only what’s available on your debit card. This is also a great choice for those with bad credit. You’ll enjoy online bill pay and account management and it is perfect for direct deposit. Use this just like you do your traditional credit card.
You’ll also have access to free customer service twenty-four hours a day, free direct deposit, no credit check and your money is insured by FDIC.
This prepaid choice has no annual or monthly fees, no credit check and no NSF fees. Youll have purchase protection, roadside assistance and the customer service that American Express is so well known for. It too allows for direct deposit. This is a great choice all the way around.
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