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SmartCredit.com Consumer Education President John Ulzheimer on the pitfalls of prepaid debit cards.
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More and more of us are dropping traditional checking accounts -- -- of higher fees and instead.
Leaning towards prepaid debit cards this is prepaid card uses -- increase into the double digits last year -- it away and John -- My patient for Smart credit dot com.
OK I wanna go through these numbers first 'cause I was really blown away by this job first of all.
Prepaid debit card usage up 18% 18% year over year that is a lot.
And now the number of people with checking accounts.
Plummeting from 92% to 88%.
That's a shocker to me and it looks to me like these people are getting out of the traditional banking industry in going to these prepaid debit cards -- is that a bad idea.
It is very sad I think that a lot of these people are being tricked into thinking that they have no for -- alternative.
Bad and other van de prepaid debit card purchase certainly not Fareed I just think at this point is it is it misrepresentation.
Not a point it's free checking is -- which is a total mess.
But also the prepaid debit cards are less expensive alternative that big banks and -- fees that they charge.
Well well -- you know I think a lot of people get convinced though.
Because of the celebrity endorsers behind these products and you and I talked a lot about Suzie -- now BET black entertainment TV up they're gonna have their -- cart.
What does this tell you -- While it tells me that there's a lot of money to be made if you're willing pizza connect your name with this -- -- a plastic thing you can profit from what.
But the bare feet per minute she wanted three minutes I found -- very got a Georgia's own credit union all these checks I -- free checking account services.
USA federal savings bank you got about.
What fighting big flight data -- from these guys -- payback for AT&T use from other peoples' networks associated credit -- 25 bucks to open a checking account.
Free check -- you -- monthly service charge free ATM.
It's at least five minutes to find housing you don't have to be any super special person to have a council -- like that's a credit unions like that this is so easy.
To find a free alternative but we are being bombarded with Susie.
And rock saw like a broad have little wine and you can card -- and all these people.
Who were trying to convince us and this is the next big thing in banking when in reality it's the next worst -- and banks -- hello.
If -- getting these fees from anybody else he would not stand for people were eager to walk away from their banks but they're happy to -- Susie for the privilege are you kidding me.
And you don't even get the advantage of establishing a relationship with a bank which later down the road by the way it might give you -- -- to start a business to -- kids to college.
Two -- higher so there is no advantage no advantage to these cards.
He -- riddle me that's when you got a buyer car what do you do you're gonna whip out your prepaid debit card and asked the dealership to take a card deadlock.
-- -- folks are basically lose access to -- to traditional banking services -- banks or hate banks you'd like to be able to have.
Access to what they have to offer which in many cases is inexpensive capacity you're an expensive capital to do things like.
Borrow money to send a kid to school borrow money to drive a car borrow money to buy a house speaker not bad things these -- good things and it used properly the banking system can be leveraged to be completely in your -- I guarantee you.
Did you come up with these structures very yes -- -- -- -- prepaid debit card which -- gonna work hard to do it.
If you can avoid this unit hidden fees meaning that you're not paying a light -- you're not going over your limit our you're not going below the zero dollar out of your checking account.
I think you'll always blow Y eighty fees which -- gonna pay out -- prepaid debit card because those are guarantee -- not punitive fees.
Out went live reactions I hear from people out there when I talk about this and I talk about it a lot as you -- -- you do as well in The -- -- you know like it.
If I -- one of these credit unions never going to be able to get access to my money because they have so few ATMs.
The reality says that many of these institutions have changed and changed dramatically.
They have access to a lot of ATMs they are in networks you can have access to your money.
-- online you can do your banking online it's not just the Big Five or six banks anymore they have access to this great technology.
A lot of institutions -- and also a lot of small banks I -- tell you appear out there and you're trying to get access to capital let's say you really need that mortgage loan.
I your desperate for money for some reason.
It makes sense to find that small -- in your neighborhood that's been around and been loaning to people and has relationships with people when you're in your community.
Hey I totally -- -- here it's forget about the ATM network do you live near target.
Do you live near a grocery store.
As part of your purchasing guess how much that caution you not -- -- like the free.
Under reported ATM network it's these -- retail stores were willing to give you cash back.
It's fantastic majority there you -- it's not an incremental cost or -- to find an ATM machine that may be just you know outside your circle travel.
And the people talk about that's up -- my talk about prepaid debit cards.
It -- -- -- didn't information that people are being given what perspective these cards -- we gotta run I enjoyed having you want as always -- Iraq.
You're so right crap thank you so much -- are at the camera.
