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Credit Cards

Green Dot Review: Everything You Need to Know Before Using this Prepaid Card

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

Green Dot Review

The Green Dot Card is the biggest prepaid card in the U.S. with 4.28 million active cards currently issued. When you use a prepaid card, you must have money loaded onto it before you can use it, and it does not provide you with the opportunity to build credit history. Rather, prepaid cards often serve as a substitution for traditional checking accounts.

Many prepaid cards come with hefty fees. When you can’t get a checking account with a traditional financial institution, unfortunately you are usually subjected to charges that you wouldn’t normally encounter at a bank. These fees are commonly referred to as “poor tax.”

If you must use a prepaid card, the Green Dot Card isn’t your worst option, but you’ll want to read on to make sure you know all the ins and outs of dodging its fees.

Green Dot

Overview of the Green Dot Card

Options to load money:

Direct deposit: With the Green Dot Card, you can set up direct deposit for:

  • Paychecks
  • Social Security benefits
  • Veterans’ compensation and pension benefits
  • Supplement Social Security Income (SSI)
  • Federal Civil Service Benefits such as retirement or annuities

Direct deposit comes with no fees, but you are limited to only having $2,500 in your account at any given time. If your paycheck or benefits exceed this limit, you can make a request for an exception to be made.

Walmart: You can also put money on your card by cashing your check at Walmart. Walmart charges a $3 fee on all check-to-card transactions up to $1,000. This fee is in addition to the $3.74 that Green Dot charges.

Deposit cash: You can deposit cash at select financial service centers and retailers across the country. You will be charged reload fees, which can be as high as $4.95 depending on the retailer.

Deposit checks. If you want to avoid the fees at Walmart, you can cash your checks via Green Dot’s mobile app. It should be noted that you will not have access to these funds for up to ten business days, though.

moneypakMoneyPak: You can purchase a Green Dot MoneyPak, which is a card that will allow you to load money onto your personal card. This option comes with a $5.95 service fee per deposit.

Deposit cash into Paypal: You can use Green Dot to deposit cash into your PayPal account at select retailers. There is a $3.95 fee for this service, and you will need either a smartphone or access to a computer and printer.

Use your tax refund: During certain times of year, you can direct deposit your tax refund onto your Green Dot Card. The timeframe for this service is limited though; in 2016 it was only available until May. Because many people may not file taxes until after the standard mid-April filing deadline, this option may not be available when you file.

How to access your account:

App or Online: Green Dot has an app available for smartphone users. From this app, you can access transaction history, register your new card or order an additional card for your account with an authorized user. This app is available on both Android and iOS.

Text alerts: You can check your balance and recent deposits through text. Make sure you know if your cell carrier has any charges for this service before utilizing it.

Other ways to use your account besides swiping at checkout:

Pay bills online: While the cardholder agreement explicitly forbids setting up recurring transactions, you can pay your bills online for no fee. Just make sure they are one-time transactions and not set up to come out regularly.

Transfer money: You can send money to and from others with Green Dot Cards via mobile for no service fee.

Fees for paper checks: If you need paper checks, you can order them for $5.95 per 12 checks.

How it Works

Step 1: Apply

In order to open a Green Dot Card, you will need to either buy a temporary card at a participating retailer or financial service center, or get the process started online. When you apply online, you will be issued a temporary card number, but it can’t be used at places that require you to have a physical card in order to make a purchase. This is a non-issue when you apply for Green Dot in person as the temporary card will be physical.

Step 2: Register the account

In order to get a permanent card, you will have to register your account. You will have to provide personal details to verify your identity, such as your name, Social Security number, address and date of birth.

Step 3: Activate personalized card

After you have registered, Green Dot will send you a personalized card in the mail. You will then need to follow activation instructions in order to start using your account.

You will be able to use your card where Visa or MasterCard is accepted (depending on which you are issued,) and you’ll also be able to use it to withdraw cash from ATMS. As discussed above, you can also use your account to transfer money to others with a Green Dot Card or pay bills online fee-free.

The Fine Print

This card does come with a lot of fine print, and you’re going to want to review all of it before opening an account.

Direct Deposit

While Green Dot boasts that you can get your paycheck or benefits a full two days early when using direct deposit, that is by no means a guarantee. First, the institution paying you money must give Green Dot a notification that they intend to pay prior to actually paying you. Then, Green Dot must elect to put those funds in your account two days early. To further complicate matters, just because you have received your paycheck or benefits two days early in the past, there is no guarantee that you will continue to receive them two days early in the future. It’s a wait-and-see game each and every time.

WARNING: Know that your employer cannot legally require you to receive your paycheck via a prepaid card.

If the direct deposit transfer is irregular or there is a transmission error, you may not be able to access your funds for a full five days after their deposit.

You can only deposit up to $2,500 at a time, though if your benefits or pay is regular, Green Card may make exceptions on a case-by-case basis.

Max Transaction and Balance Limits

On any given day, you can only spend $2,500 on your Green Card. That is also the max you’re allowed to have in your account, unless an exception has been made for you because of direct deposit.

You’re only allowed to take out $400 at a time when making a withdraw from an ATM, however, the ATM you’re using may have limits that are even more stringent.

First Load at Retailer

The first time you load money onto your card at a retailer, you must load at least $10 but no more than $500. The retailer may or may not have stricter policies for the initial load. Also remember that when you load your card at a retailer, you will incur a fee.

Authorized Users

You can have an authorized user on your account, and he or she will be issued a separate card. The card number and funds will be the same as yours, though, and you are solely responsible for any spending, charges or fees that they rack up. The authorized user will not be able to load funds onto your card. In order to remove an authorized user, you will have to close your entire account and open a new one.

Using Your Card to Make Specific Purchases

In some situations, you’ll have to use your card in precise ways. For example, if you’re getting gas, you can only use your Green Dot Card as a debit card with your PIN at the pump. If you want to pay credit, you’ll have to go inside.

In other situations, Green Dot may put a hold put on your card. That means that a certain amount of funds are frozen and you can’t use them, even if they exceed the actual transaction amount. This commonly happens when you make a huge purchase, such as reserving a hotel or car rental. It can also happen when you go out to a restaurant; Green Dot may reserve additional funds in case you decide to leave a non-cash tip. These funds can be frozen for up to 90 days.

Fraudulent Activity

If you lose your card or it is stolen, you have two days to notify Green Dot. If you’re reviewing your transaction history and see some weird activity that is not your own, you have 60 days, though there is exception for those with “good cause” like being hospitalized or away on long trips. If you notify Green Dot within these timeframes, you will only lose $50. If you don’t, but Green Dot decides that it could have identified the fraud themselves, you can only lose up to $500.  If neither of those apply, you could lose everything according to Green Dot’s own policies.

However, MasterCard and Visa also provide protection. If your card is a Visa, you will only lose money if they determine that you’re lying about the charges being fraudulent or if you were grossly negligent. If your card is a MasterCard, you will only lose money if your card is not in good standing (which is rather difficult, though not impossible, to do with a prepaid card,) or if you have reported unauthorized activity more than twice in the past twelve months.

Negative Balance and Account Closures

If you have a zero account balance and incur fees, Green Dot will charge you a max of $11.90. That is more than can be said about many traditional financial institutions. If you try to spend more money than you have on your card, the transaction may be declined, or you may end up with a negative balance on your card commensurate with the difference. So if you tried to make a $30 purchase, but only had $10 on your card, you could potentially end up with a -$20 balance.

You must pay off negative balances. If you don’t, or if you have a zero balance, your card can be closed without notice.

If you have money in your account, but you don’t use it for a year, it will be turned over to your state as unclaimed property. You must then go through the claim process with your state if you want to see that money again. You can find out if you have any unclaimed property here.

Avoiding Fees

The Green Dot Card does come with a number of fees. Here are ways you can avoid them:

  • Initial Purchase Fee: $4.95 or less if you purchase in-person at a retailer (but $6.95 for the NASCAR® Prepaid Visa card). You can avoid this fee by opening your card online.
  • Monthly Charge: $5.95. You can avoid this charge by loading at least $1,000 onto your card during each billing cycle, or by making 30 purchase transactions in each billing cycle. It should be noted that many, though by no means all, traditional financial institutions will also have a monthly service fee if you do not meet similar guidelines.
  • ATM Fee: $3.00 every time you withdraw cash from an out-of-network ATM or from any teller. $0.50 per balance inquiry at out-of-network ATMs. You can avoid these fees by only withdrawing money from in-network ATMs, though you should remember that individual ATM operators may have their own fees.
  • Reloading at Retail Locations: This can cost you up to $4.95, depending on the retailer. To avoid this, keep as much of your money digital as possible so that you won’t have to deposit cash. If you work in the service industry, this is much easier said than done.
  • Replacement Card Fee: $4.95. You can avoid this fee by not losing, damaging or having your card stolen, but that’s everyone’s goal, anyways.
  • Foreign Transaction Fee: 3%. You can avoid this fee by not using this card out of the country, or by using another card that carries no foreign transaction fees.
  • Failure to Register: $5.95 starting after 90 days. If you purchase your card in person, you will need to register and submit all necessary identifying documentation within 90 days, otherwise, you’ll start incurring a $5.95 fee. Avoid this by registering within 90 days.
  • Charge for Checks: $5.95/12 checks. You can potentially avoid this fee by paying all of your bills online or in cash. (Just be sure to always get a receipt.) If a check is mandatory, you can’t really get around this one.
  • PayPal Service Fee: $3.95 every time you put cash directly into PayPal. To get around this fee, find another way to fund your PayPal account.

Pros & Cons

Pro: Provides a way for many to access financial services that otherwise wouldn’t be available to them.

Con: These services are riddled with fees.

Pro: Direct deposit is free, and provides a way to dodge expensive cash-checking services.

Con: You can only have $2,500 in your account at a time unless you have filed for a direct deposit exception and been approved.

Pro: Many of these fees can be circumvented if you have internet access.

Con: The very reason you need a prepaid card may be lack of internet access.

Pro: Reasonable limit on fees if your card has a zero balance.

Con: The monthly deposit requirement to avoid a Monthly Charge may exceed your income.

When to Migrate Away from Prepaid Cards

If you have a prepaid card, do everything you can to find a reputable bank or credit union to use instead. Investigate their fees, too, to make sure you’re not paying too much for services that are free with many traditional financial institutions.

However, there are legitimate reasons for having a prepaid card. If you have a poor banking history, for example, traditional banks might not allow you to open a checking or savings account.

Another reason you may opt for a prepaid card if you don’t have a traditional financial institution in your neighborhood, and lack a way to regularly access one in another neighborhood. If this is the case, turn to your computer. Mobile banking has been made easier and more reliable in recent years, and you can do almost anything that you’d be able to do at a physical branch.

If you don’t have access to a computer or a home internet connection, it is not advised to use the library to do mobile banking as this connection is shared and not secured. Instead, you may want to look at doing mobile banking via your smartphone, or look into the ConnectHome program to get a low- or no-cost computer and/or internet connection.

If you don’t have a smart phone and have exhausted all other options, a prepaid card may be your best bet. Go in with your eyes wide opened. Figure out the best way to dodge fees so that they don’t cut into your pay or benefits. Then, as you build your credit score or gain access to mobile banking, migrate away to a traditional checking account that is almost guaranteed to be less laden with fees, allowing you to keep more of your own money.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Brynne Conroy
Brynne Conroy |

Brynne Conroy is a writer at MagnifyMoney. You can email Brynne here

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Credit Cards, Featured, Pay Down My Debt

Guide to Credit Counseling: 7 Key Questions to Ask

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

couple talking to a financial advisor
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If you have little knowledge on the topic of personal finance and are struggling with your own money issues, you might want to think about getting credit counseling.

Credit counselors can help you set a budget and advise you on how to manage your debt, which can include credit card debt, student loan debt and even housing debt.

Reputable credit counseling organizations have certified counselors who are trained in consumer credit, budgeting, and money and debt management. Credit counselors will work with you to come up with an individualized plan to address any money problems you may have. This can be done in person, over the phone or online.

Seeking credit counseling is typically voluntary but can be required when filing for bankruptcy. In this guide, we’ll answer some key questions you might have about credit counseling and whether it’s right for you.

How do you find a credit counselor?

Before settling on a credit counseling organization, do your homework to make sure they are not only reputable but will also be the most helpful for your particular financial circumstances. Check with your state’s attorney general and consumer protection agency to see if there have been any complaints filed against the organization.

Ensure that the organization is accredited and certified. Check to see if they are members of the National Foundation for Credit Counseling or the Financial Counseling Association of America. Most non-profit credit counseling agencies are associated with these organizations.

When researching agencies, first ask what information or educational materials they provide for free. Organizations that charge for information are typically more interested in their bottom line than in helping you. Also, ask about the types of services they offer. Limited services can be a red flag. The fewer services they offer, the fewer solutions they may provide for you.

You should also attempt to understand the organization’s fee system — not only how much services will cost but also how employees are paid. If employees make more based on the number of services you receive, look for another credit counseling organization.

MagnifyMoney has come up with a list of some of the best credit counseling options, which is a great place to start. If you are looking for credit counseling as a pre-bankruptcy measure, the U.S. Trustee Program has a list of approved credit counseling agencies that can provide pre-bankruptcy counseling.

How much does credit counseling cost?

Credit counseling can involve both start-up and monthly maintenance costs. The Department of Justice says that $50 per month is a reasonable fee. Further, the National Foundation for Credit Counseling (NFCC) suggests that a start-up fee should not exceed $75 and monthly maintenance fees should not be more than $50 per month.

Credit counseling agencies may offer fee waivers or reductions, depending on your income levels. Where credit counseling is required, the DOJ says that, if household income is less than 150% of the current poverty line, the client is entitled to a fee waiver or reduction.

Other regulations, such as when fees can be collected and circumstances that would warrant a fee reduction or waiver, may also be outlined by your state.

How long does credit counseling last?

While the length of your credit counseling session depends on the complexity of your financial problems, sessions typically last 60 minutes. After the initial session, credit counselors will follow up to ensure you understand the actions you need to take and that you have been able to get started on the plan they developed. Another session may be necessary depending on how your financial situation unfolds following the first session.

What do you accomplish with credit counseling?

According to the NFCC, reputable counseling involves three things. First, there must be a review of a client’s current financial situation. You cannot move forward unless you know from where you are starting. Second, there should be an analysis of the factors that contributed to the client’s bad financial situation. You don’t want bad habits to undermine your progress. Lastly, there must be a plan to address the situation without incurring negative amortization of debt. Negative amortization occurs when the amount of debt you have increases because you aren’t paying enough to cover the interest, even though you are making payments.

Understanding these three factors of good credit counseling gives you a place to start in improving your financial situation.

What is the difference between credit counseling and debt management programs?

A debt management plan is just one solution a credit counselor may recommend based on your financial situation. Having a debt management plan is not the same as credit counseling.

A debt management plan involves the credit counseling organization acting as an intermediary between you and your creditors. Each month you will deposit an agreed upon amount of money to your credit counseling agency, which they will, in turn, apply it to your debts.

The credit counseling agency works with your creditors to determine how the amount will be applied each month, and negotiates interest rates and any fee waivers. It’s important to call your creditors directly to check whether they are open to negotiating interest rates or offering waivers for fees. In some cases, a credit counseling firm may promise to negotiate those items for you but be stonewalled when they discover a creditor isn’t even open to the discussion.

Before agreeing to a debt management plan, make sure you understand any fees associated and any choices you might be giving up. For example, some debt management plans may require you to give up opening up new lines of credit for a specified period of time. Remember that a debt management plan is just one of many solutions a credit counselor may advise you to consider.

How does credit counseling impact your credit score?

Not directly. While the fact you are in credit counseling may show up on a credit report, that does not affect your credit score. The actions you take as a result of credit counseling, however, can impact your score.

For example, if you don’t choose a reputable credit counseling agency, the agency may submit a payment on your behalf late to your creditors. So even though you submitted your payment on time to the credit counseling agency, your score may still be dinged. This is just one reason why it’s important to make sure you use a reputable credit counseling agency.

Who should consider credit counseling, and when?

While credit counseling is sometimes required, such as in instances of bankruptcy, you always have an ability to seek credit counseling.

Boston-based Bankruptcy attorney Julie Franklin explains, “For bankruptcy purposes, there are two course requirements — a debtor must complete the first credit counseling course prior to filing and obtain a certificate that is filed with the court in their initial bankruptcy petition documents. Post bankruptcy filing, the debtor is required to take a second course, and upon completion, the certificate that is issued must be filed with the court in order for the debtor to obtain an order of discharge.”

Anyone struggling with their personal finances can consider credit counseling as an option. Franklin also notes that “the first credit counseling course is a tool for debtors, as it compels the individual taking the course to closely examine the household assets, income, liabilities and spending habits to determine if there’s a way to save the debtor from having to file bankruptcy.”

If you are considering bankruptcy, you will have to attend some credit counseling anyhow, but doing so could also help you avoid filing for bankruptcy at all. Keep in mind that filing for bankruptcy will always have a significant effect on your credit score, and can hurt your changes for getting loans or new credit for years to come. If you can avoid it, you probably should.

Voluntary credit counseling might not help if you are already being sued to have a debt collected. However, you may be able to negotiate terms with the debt collector that result in a withdrawal of the suit if you agree to enroll in credit counseling and possibly a debt management program. Not all creditors will agree to such terms, but it is possible.

Bottom line

Many people run into trouble with their finances, whether they have too much credit card debt, are struggling to make their housing payments or just find general budgeting to be a challenge. Some people are dealing with more serious issues, such as potential bankruptcy. There are credit counselors available to help you with any difficult financial situation you may be facing. The most important thing is to ensure you work with a reputable credit counseling agency, so do your research first. A good credit counselor can help you get on the road to financial health, but working with a bad one can lead to more problems than you already have.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Liz Stapleton
Liz Stapleton |

Liz Stapleton is a writer at MagnifyMoney. You can email Liz here

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Credit Cards, Identity Theft Protection

When Banks Can Refuse to Refund Fraudulent Debit Card Charges

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

ATM

Typically, debit cards that are used as “credit” are offered the same protections as credit cards. This means that if you use your debit card in a store and choose “credit” instead of entering your PIN number, you should receive the same protections as if you used an actual credit card. However, we do encourage you to double check the fine print your bank provides on this matter before assuming your debit card will receive those protections.

But here’s a scenario where your debit card is riskier than your credit card. If you withdrawal money at an ATM (or any store doing cash back) using your PIN number, you have additional risk. If someone steals your pin number with a skimming device at an ATM, then he has direct access to your money. This isn’t like credit card fraud with obnoxious charges you need to dispute. This is your hard-earned cash being taken directly out of your checking account. And if you aren’t careful, you might not be able to recoup your losses.

So, what can you expect if you are a victim of debit card fraud?

Timeline for Being Able to Get Your Money Back

If you are a victim of debit card fraud, you are responsible for the following:

  • $0 if you report the loss or fraud immediately and the card has not been used,
  • Up to $50 if you notify your bank within 48 hours of your lost or stolen card,
  • Up to $500 if you notify the bank with 48 hours and 60 days of your lost or stolen card, and
  • All of the fraudulent charges if you don’t notify the bank until after 60 days.

It’s important you don’t delay in reporting the fraud to your bank if you want to be able to get all of your money back. If you were the victim of theft because the crook skimmed your info and used your PIN, then you may be on the hook for the $50 because you couldn’t report to the bank before the card was used. You didn’t know it had happened until the strange transaction showed up!

It may seem unfair to be responsible for charges that you did not actually charge yourself, but to avoid that scenario and protect yourself, consider taking the following precautionary actions.

What You Can Do To Protect Yourself

To protect yourself against debit card fraud, you should do the following:

  • Only use an ATM inside a bank (this will lesson the likelihood that a scanner is on an ATM)
  • Cover your hand when you type your pin into an ATM (to protect yourself against any devices attached to the ATM from getting your PIN)
  • Set up text alerts for each transaction over $0.01 on your card. This way you’ll be immediately alerted if a bogus charge is made
  • Monitor your bank on a regular basis (so you can give notice of fraud immediately)
  • Report stolen funds immediately (so you’re not responsible for the charges)
  • Check-in annually with your bank as to the policies regarding debit card theft (know whether your debit card is specifically protected and to what extent)

While you can notify the bank by phone, it is best to get everything in writing. For purposes of the time requirement, notice is considered given when you put the letter in the mail. It’s even better if you send the mail certified. You can, of course, send notice by mail and call. Whatever you do, keep a record of your communications you have with the bank. This will put you in the best position if you have to escalate your problem.

Remember that if you take the actions listed above, you will be more protected than you otherwise would. Even if you didn’t do anything wrong, like in the example above, you can still find yourself stuck with fraud charges that your bank won’t reverse. These specific steps will help you protect yourself, even when you’re not at fault. This is particularly important if you use your debit card frequently.

Don’t want to use a credit card? Learn how to survive with just debit cards here. 

Debit vs. Credit: How to Decide

Using a debit card forces you to keep your spending in check because you cannot spend more than you have in the bank. However, it may be riskier than using a credit card for the reasons described above. Discover, for example, now offers a Freeze It® on/off switch for your account. If you’re concerned because you’ve lost your card, you can temporarily freeze your account and Discover will not authorize new purchases, cash advances or balance transfers.

Discover it® Balance Transfer

Intro BT APR

0% for 18 months

Balance Transfer Fee

3% intro balance transfer fee, up to 5% fee on future balance transfers (see terms)*

Regular APR

14.24% - 25.24% Variable

APPLY NOW Secured

on Discover Bank’s secure website

Rates & Fees

If you’re not sure which is best for you, ask yourself what do you value more – your spending being limited or the additional protections from fraud. If you can control your spending, then you may be better off with a credit card. If you are a spender, however, then take the additional steps listed above to make sure you fully understand your specific liability in the event of debit card fraud. If you feel your bank is behaving unethically and should be refunding you, then reach out to the Consumer Financial Protection Bureau to file a complaint.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Natalie Bacon
Natalie Bacon |

Natalie Bacon is a writer at MagnifyMoney. You can email Natalie at [email protected]

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