Life After Debt: The “Real Life” Steps To Recovery

Life Afer Debt Post Image2 1024x681 Life After Debt: The Real Life Steps To Recovery

I just finished reading an article on the Huffington Post by Kevin Yu, one of the founders of SpringCoin and a certified credit counselor with the NACCC – The National Association of Certified Credit Counselors.  In the NACCC website, it says that their mission is to increase professionalism, standards, ethics, and positive recognition in the financial counseling industry. It says they believe that financial counseling represents an important consumer service and that education is the key for enhanced on-the-job effectiveness, employment satisfaction, and client retention. OK

I’m all for credit counselors having professionalism, standards, and ethics in the same way I’m all for collection agents to have professionalism, standards, and ethics.  Consider this post an endorsement of both the NACCC and ACA – The Association of Credit and Collections Professionals. icon smile Life After Debt: The Real Life Steps To Recovery

The Other Half Of The Battle?

Mr. Yu just penned an article titled, “Life After Debt: The Other Half Of The Battle.  In it, he opens up well by pointing out that there’s a reason why consumers fresh out of bankruptcy begin to receive credit card offers in the mail after they’re discharged; credit card companies have a deep understanding of consumer spending behavior and they realize it takes a drastic lifestyle change to reduce your spending habits.  In other words; they know you probably won’t!

Here’s where I think the article goes off the “real life” script.  He states, “It’s a surreal feeling once you’ve paid off your last credit card. You feel a thousand pounds lighter and finally feel liberated.”  You know what’s a surreal feeling?  Waking up on the other side of a $1.6 million dollar Bankruptcy and still having your family intact.  The release from stress of getting the IRS off your back after getting $164,000 dollars in federal tax liens released without losing your home.  Owning your family van outright after not having one, but two cars repossessed; happy in the thought that no one’s coming for it in the middle of the night.  That’s surreal!  A thousand pounds lighter? I felt a thousand lifetimes lighter!

He continued by saying, “if you haven’t already figured out how you got into debt in the first place; take a long hard look at your past. Stare debt in the face and be honest with yourself. You shouldn’t be ashamed of once being in debt, it happens to the best of us.”  Can’t argue with that and I’m talking from experience.  But here’s where the post turned simplistic.  He asked; why do people fall into debt?  His answer? “Simply put, it really just comes down to spending more than you earn and not creating a rainy day fund.”  Is that it?

Damn Technology!

He then went on to say, “Technology is growing faster than we can keep up with. We’re always being pressured to buy the latest gadgets: TVs, iPhones, tablets, or cars. Our friends and neighbors are buying it, so we succumb to it.”  Say what?  And then what; as pressured consumers we go bankrupt or seek out his services?   He goes on to say that there’s a line between spending carelessly and shopping frugally. A line?  What the hell is that?  Did he mean to write a ‘fine line’?  Because if he did, I’d tell him he’s wrong! There’s a world of difference between spending carelessly and shopping frugally.  I would refer him to Katy Wolk-Stanley’s blog – The Non-Consumer Advocate, to learn the difference.  Spending carelessly can ruin your financial life; shopping frugally will never ruin your financial life!  Like I said; worlds apart.

He goes on to say that easy access to credit is part of the problem and, “When we think about having a $10,000 credit line, some of us might tend to think of it as “free cash.” It’s easy to get sucked into paying small monthly minimum payments with the idea that you’ll eventually get out of debt.”  This is 100% on the money.  But, again he goes off the “real life” script.  He says the other half of the battle is staying out of debt and to start saving for “your rainy day and retirement fund.”   I disagree.

First Steps

The other half of the battle is not the challenge to stay out of debt and start saving for your rainy day and retirement fund because there isn’t another half; there are first steps to take after recovering from debt and credit issues.  Notice the plural use of the word ‘steps’ and there are many stages involved with those steps which he couldn’t possibly cover in an article as simplistic as his!  I can tell you that one of those steps is learning how to change your mindset.  If you haven’t already done so, read my post titled “It Is What It Is…But Will Become What You Make It.”  You can’t fix a problem with the same ‘mindset’ that helped get you into it.

I’ll leave it at this; the best points to take from his post are that it’s absolutely necessary to budget.  If you don’t have a plan, then you’re planning to fail; it’s just that simple.  The second one is to learn from your mistakes; which goes to my point of creating a new mindset!

If you’re recovering from debt and credit issues, what steps did you take, or are taking, to ensure that you don’t go down that path again.  For me it was living Katy Wolk-Stanley’s motto:  “Use it up, wear it out, make it do or do without” Are there any motto’s you’re living by? I’d love to hear it!



3 Reasons Why You Should Never Dispute Credit Errors Online

Slot Machine Dispute Online2 1024x681 3 Reasons Why You Should Never Dispute Credit Errors Online

One of the most stunning and nefarious things that can happen on the internet is the way people repackage content and spread it throughout the web as though it were their original content. In 2007, I penned the article you see below for N.A.C.R.A., The National Association for Credit Responsibility and Advocacy, of which I was the founder and creator of, titled “3 Reasons Why You Should Never Dispute Credit Errors Online”.

NACRA docstoc Report4 3 Reasons Why You Should Never Dispute Credit Errors Online

 

As you can also see in the photo where the red arrow is pointing, I was surprised to find it available at .docstoc, a reputable electronic document repository and online store.  Of course, I made an immediate complaint with their copyright department and filed an online Digital Millennium Copyright Act (DMCA) notice of copyright infringement and take-down request.

As you might imagine, upon doing a Google search for the title of the article and various sentences located within the article, I pulled up several people quoting the article verbatim.  I mean, they didn’t even bother changing a single word!  As far as I’m concerned, when you are trying to educate the public about any issue, chances are very high, unless you wrote the book…you didn’t write the book!

Meaning, throughout my videos and various writings, I will undoubtedly quote various experts and trusted authorities when discussing my topic.  For instance, there are many times I may quote legal testimony from a deposition given under oath by recognized experts in the Fair Credit Reporting Act like Evan Hendricks.  I do not repackage his content; rather, I tell you where I learned the information I’m writing about,  so you can do your own research.  Oh, by the way; Evan did write the book.  It’s called “Credit Scores & Credit Reports; How The System Really Works, What You Can Do.”

If you haven’t already done so, I ask that you please read my post titled, “Who Can You Trust When Taking Credit and Financial Advice”, and please read my Disclaimer below my About page to read what I claim, and do not claim, to be.  So without further ado, here is the updated version of my original report from 2007.

3 Reasons You Should Never Dispute Credit Errors Online

Reason Number One: Time

One important factor you have on your side when disputing errors in your credit report is time. By law, the credit bureaus have 30 days within receipt of that dispute to properly investigate your claim.  However, this only applies to reports other than one obtained for free at annualcreditreport.com.  In that case, the credit bureaus have 45 days to respond.  If you didn’t know this fact, you need to watch my free video series; the Better Credit Blueprint.

Reason Number Two: Shortcut The Process

The Credit Bureaus online dispute system is set up in such a way that when you use it, it makes their job that much easier. The information you put into their limited dispute fields falls right into their electronic verification system.  By using their online dispute system (E‐OSCAR), you have no proof of the dispute or a paper trail that certified return receipt requested would give you if you had mailed that dispute. An important aspect of accelerating the credit recovery process is keeping meticulous records.

If you catch the credit bureaus in violation of the Fair Credit Reporting Act or a collection company in violation of the Fair Debt Collection Practices Act, you’ll have the necessary ammunition to beat them in court and clear your good name should you have to go that route.

Reason Number Three: Revision Not In Your Favor

When the Fair Credit Reporting Act was revised by FACTA, they put in a section for “Expedited Dispute Resolution” Section 611a(8), also known as the on‐line dispute system. If you read this section, you will notice the following;

Expedited Dispute Resolution 3 Reasons Why You Should Never Dispute Credit Errors Online

Well paragraph 2 is the part that requires the CRA to forward your dispute and all related documentation you provide to the creditor or company furnishing the information to the bureau.   Paragraph 6 is the part that requires the CRA to provide you with written results of the re-investigation.   And paragraph 7 is the part that requires the CRA to provide you with the method of verification on request by you, the consumer.

So as you can see, by using the CRA’S online disputing system (E‐OSCAR), which by the way stands for Electronic Online System for Complete and Accurate Reporting (ha ha ha), you wouldn’t receive a notice from the credit bureaus telling you that the information you disputed has been verified as accurate, which, by receiving this notice is what allows you to request the method of verification (MOV).  The credit bureau then must provide you with this information within 15 days of your request.

Important Tool

As you can see, Method of Verification is another important tool to use and a very important part of accelerating the process of credit recovery should you need to delete an item discovered to be in error, incomplete, or unverifiable during the “Credit Audit and Verification” process.   So why would you give these rights up; voluntarily no less?

Additionally, the law is not specific enough and does not say “permanently delete or suppress”; herein lays the problem. The Credit Reporting Agencies (CRA) can “soft delete” a disputed trade line for 30 days and then the trade line can reappear when the furnisher (creditor or collector) reports it again in the next 30 day cycle. This is due to the fact that the CRA’s are not required to tell the creditor or collector that you disputed it at all, thanks to the “shall not be required to comply with paragraphs 2” if you decide to dispute an item online. Are you getting all of this?

Elementary, my dear Watson

As Sherlock Holmes would say, “Sleight of hand is afoot!”  This is a deceptive system in where we, the Amateur Consumer, think we may have succeeded in our dispute and gotten what is known as a “hard delete”, but in fact, it is only temporary. Since the creditor or furnisher of that information does not know the item was deleted, they will mistakenly re‐report it and then conveniently, the credit bureau will place the negative item back on your report. And if that isn’t bad enough, you lose the hard copy of the investigation results you would otherwise have received and been entitled to if the dispute had been sent via certified mail in the first place.

Again, by disputing in writing, as the FTC states you should on their website, the bureaus might temporarily remove a negative item (soft delete) until the information is verified as true but…if the information is verified to be true, they must then notify you in writing within 5 days of putting the item back on your credit report. If they don’t, it’s a violation of the FCRA and you could potentially sue them for $1,000.

Listen To The FTC

Look, there’s a reason why the FTC states right there on its website that you should dispute EVERY item you think is not accurate, incomplete, or unverifiable on your credit in writing and by certified mail, “return receipt requested”; it’s because you are protected as a consumer and by disputing online electronically, you lose many rights under FCRA.  So why would you ever do this?  The answer for anyone reading this blog post should be; I will never dispute an item in my credit report online so repeat after me: Now I know better!  At the end of the day, the moral of the story is; Gain knowledge, become confident, and become a better, more informed consumer moving forward.

UPDATE:

Less than 12 hours after filing my Digital Millennium Copyright Act (DMCA) notice of copyright infringement and take-down request with .docstoc about my original N.A.C.R.A. report in 2007, I received an email from their copyright department informing that they had in fact, removed the document from their website.  Below is a copy of the email as well as a screenshot showing the document removed from their site.

docstoc take down and removal approval 3 Reasons Why You Should Never Dispute Credit Errors Online

docstock website 3 Reasons Why You Should Never Dispute Credit Errors Online

All’s Well That Ends Well

As I have written in previous posts; all’s well that ends well, and this ended well.  I have no idea how much money this character made off my report since it was downloaded over 1200 times, but it is what it is.  I thank docstoc for taking it down so quickly and want everyone reading this post to know that I absolutely do not mind anyone sharing what they learn from any of my posts or from my free Better Credit Blueprint video series.  That’s the idea, isn’t it?  To share your knowledge and make a greater difference.  Just don’t try to pass it on as your own icon smile 3 Reasons Why You Should Never Dispute Credit Errors Online



The Real Truth About Pre-Paid Credit Cards From a ‘Former’ User

TAC Blog Post Credit Card1 1024x693 The Real Truth About Pre Paid Credit Cards From a ‘Former’ UserTuesday, August 1st 2012, will go down as the day I told the pre-paid card industry thanks, but no thanks!, We’re creatures of habit, right? We like to keep things consistent and universal and believe me; I am no different. Unfortunately for me, and completely out of necessity as I pointed out in my Underbanked Video, one of those habits I got used to was uploading money onto my Green Dot MoneyPak card, in order to upload money into my PayPal account, so I could have access to it. After all, I’ve been performing this ritual now for over 2 years.

If you’re asking yourself; did he just write that he uploaded money onto two separate accounts so that he could access his  own money? Wonder no more – it’s true.  Let’s not forget that additionally, I have to pay for the privilege of uploading and accessing that money as well! As Farnoosh Torabi, a personal finance journalist, commentator, and author of “Psych Yourself Rich, Get the Mindset and Discipline You Need to Build Your Financial Life” pointed in out in a blog post about this very same topic; you shouldn’t have to pay money… to access your own money!

Is There Any Choice?
Again, as a former member of the Underbanked who was off the financial grid for two years because I did not have access to a checking account, I had no choice…or so I thought. It’s funny how I am continually arriving to these ‘aha’ moments when it comes to being underbanked and under-served, as an Amateur Consumer.

Even though I recently opened my first checking account in two years through Regions Bank, instead of going there to deposit $150 dollars, I drove off to Walmart to upload money onto my Greendot MoneyPak card so I could then transfer the funds onto my PayPal account. Like I said; creatures of habit.  Everything happened exactly as it had over the last 2 years; I waited the customary 15 minutes after uploading my money at Walmart and then I attempted to add those funds to my PayPal account online through MoneyPak.com.

This time, instead of the online system asking me for my activation code located on the Walmart receipt, it was asking for a set of numbers off the back of the MoneyPak Card which my 2 year old card did not have as shown below.

MoneyPak Comparison3 The Real Truth About Pre Paid Credit Cards From a ‘Former’ User

After attempting to insert the numbers below the bar code of my MoneyPak card, which did not work, the only thing left to do was to follow the instructions explained in Step 2 located on the back of my MoneyPak Card shown below

Step two Money Pak Card The Real Truth About Pre Paid Credit Cards From a ‘Former’ User

Situation Turning Mind Boggling
Here’s where my experience started to turn mind boggling.  When I called the toll free number listed in the back of the MoneyPak card shown in the picture above, the recorded voice on the other side of the line told me that my estimated hold time was 20 minutes.  So I held on for several minutes, at which point the voice came back on again telling me that my call is “very important to them” and that my estimated hold time was now…wait for it….20 minutes – still?

After having those lines repeated to me in an endless loop while holding for 21 minute and 7 seconds, and being told to hold for an “available specialist”,  my wait time continued to be 20 minutes regardless of how long I had already been holding so I hung up and decided to try again while this time, recording the call to see if I would have the same experience. Guess what? I did! And you can hear the complete unedited call here if you don’t mind wasting 21 minutes and 15 seconds of your life that you’ll never get back.

First Call to GreenDot Customer Service The Real Truth About Pre Paid Credit Cards From a ‘Former’ User

After the second call, I decided to see if maybe a third call would bring a different outcome. Ever watch paint dry? The only difference this time, as you can see in the picture below, was that I left the call unattended at my desk, went to make myself a smoothie, made my kids lunch, and 32 minutes later when I walked back into my office, my hold time was still…wait for it…. 20 minutes! WTF!

Making Smoothie During Call 1024x768 The Real Truth About Pre Paid Credit Cards From a ‘Former’ User

So I got online and started doing some research to find if there was any other contact information available for Green Dot Customer Support. Below is a screenshot of a supposed “best way” to reach Green Dot customer service.

Best Way To Reach GreenDot Screen Shot1 The Real Truth About Pre Paid Credit Cards From a ‘Former’ User

As you can see, the first number is the number I called.  Amazingly enough, it says 36,400 Green Dot customers recommend the information they are providing; really?  Did they mean Green Dot employees? Not only that, but they also prefer that first number over the second number with the shorter wait time?  That second number you see listed up top takes you into the same system as the first and according to this chart, there is no live chat or email available either.

All About The Benjamins Baby!
All this fantastic customer service from a company that according to Steve Streit, Founder, Chairman and Chief Executive Officer of Green Dot Corporation, said on an investor call that their 4th quarter earnings for 2011Q4 were solid and 2011 was another strong year for Green Dot. Here’s what solid means: half a billion dollars in revenue!  And get ready for more people because not only does Walmart own a minority stake in Greed Dot, er, I mean Green Dot Corp, but according to a Reuters report online, the company was chosen as program manager for a U.S. Treasury pilot program under which Americans will get their federal tax refunds via direct deposit to a prepaid debit card. (Cue the cash register; Caching!)

According to David Parker of Lazard Capital Markets who was quoted in the same article, Green Dot is trying to increase revenue and focus on existing customers rather than expanding its client base. Really? Hey Mr. Streit; If that’s the case, my advice is; start with some better customer service! I would argue that my experience, and apparently those of many others online from what I’ve read, seems to show that Green Dot is not concerned with customer service or… lack-thereof, further proving; it’s all about the Benjamins baby!

Slow Your Roll Baby Limbaugh’s
Now before you go spouting off about me being a socialist or being anti-capitalism, stick that nonsense back in your mouth. This is America and I am as much a capitalist as the next guy, even if I am giving away my video series for free! However, I believe that if you are making money hand over fist and are supposedly providing a service to help those 60 million plus “underbanked” Americans, the least you can do is provide some quality customer service.  Am I asking too much in expecting Green Dot to actually get someone on the line when you need some help and call their customer service number that they advertise on the back of their card?  You do know that’s a rhetorical questions, right?

Surprisingly, in Googling customer service complaints on Green Dot, I came across several responses from Green Dot themselves,  to actual complaints.  Almost as though they have a department who scans the internet for negative comments and reviews.  Maybe an “Online Reputation Management Department”:)  Take a look at this online complaint below and the response supposedly provided by Green Dot:

Green Dot Complaint The Real Truth About Pre Paid Credit Cards From a ‘Former’ User

As you can see, they still aren’t providing a number for immediate help.  What if this person is off the financial grid and uploaded money to pay a bill? It’s his money that he needs access to but can’t get.  Now he has to email Green Dot “Customer Advocacy” with his contact information and hope they get back to him in time to make his payment?

Why Yes… We Do Have A Choice
Again, before anyone goes spouting off about using a pre-paid credit card being my choice, or  a MoneyPak,  or yada yada yada; you’re right!  This is what this entire post is about.  We do have a choice and we can become better educated about those choices; even if you are part of the 64 million plus who are “underbanked” or off the financial grid. I’ll get into this more at the end of the post. Let’s get back to my personal story!

I finally found Green Dot’s corporate number, which for anyone looking to solve any similar issues is 626-775-3400. After listening to all the prompts at least once, on the second go-round, I pressed prompt #2 for customer service.  From the time I did, until a very nice and attentive customer service rep named Daniel picked my call up, it took all of 1 minute and 9 seconds.  Not bad and you can listen to the entire 26 minute and 36 second call by clicking here.  For this blog post, here’s the Reader’s Digest Version of what happened;

After explaining my situation to Daniel, he asked me to read him the numbers in the back of my card and then asked me to hold for a few seconds, as you’ll here on the call.  After 6 minutes and 23 seconds, which seemed short in relation to what I had just gone through in the previous hour, Daniel came on and apologized for the wait.  He went on to say that he was researching the issue and explained that my card with the bar code is outdated and is part of the old system they used to have.  He said he could actually look up my information and assist me with the transfer, which I don’t have to tell you was welcomed news.  He asked me to fax him my Walmart receipt showing the activation code along with the front and back of my MoneyPak Card.  Pictured below is the complete fax I sent him:

Complete Green Dot Fax The Real Truth About Pre Paid Credit Cards From a ‘Former’ User

He also asked me to read off information contained in the Walmart receipt, which I did.  Let me say, in all fairness, that he was equally as patient with me as I was with him, because I had asked several questions throughout our call.  One of which was to find out if they had any system in place to inform consumers like me that the MoneyPak card we are using is outdated and could no longer be used to transfer funds online.  He informed me that they notify their merchants of these changes and it’s up to them to let customers know when they are uploading money onto an outdated card.  Of course, this is not what happened with me at Walmart and you would think because Walmart owns a minority stake in Green Dot, they would be informed.

Help On The Way
After I gave him the Walmart receipt information, he asked if he could put me on hold again to which I responded, “not at all”.  He responded by saying, “I really appreciate it.”  I don’t have to tell you that much to my delight, his courteousness and professionalism were not only appreciated, but he made the 6 minutes and 55 seconds it took to wait for him to get back on the line, bearable.  In short, he was a joy to interact with.  Did I just say that? icon smile The Real Truth About Pre Paid Credit Cards From a ‘Former’ User

Actually, at the 22 minute mark of our call while I was holding, the music stopped and the line went silent. I damn near lost my mind! I thought we were disconnected and almost hung up after saying hello several times as you’ll hear in the call.  Daniel came back on after 35 seconds of this silence and apologized because he was talking but had me on mute.  Thank God I didn’t hang up. You see; Patience does pay off.

He confirmed what he previously told me and said he would be waiting for the fax.  Once he received it, he told me he would call me back with a pin number so I could go ahead and make my transfer.  What he said next really blew my mind. Listen to it here or read the transcript below:

Green Dot/Daniel: I do sincerely apologize for all this that you’re dealing with because I know you have to make your payments…..

After he took my contact information, I asked Daniel when he thought he would get back to me.  Again, his response floored me.  Listen to it here or read the transcript below:

Green Dot/Daniel: As soon as you send the copy of that receipt

Of course, having gone through this too many times with other customer service personnel, I asked Daniel for his contact information which he provided. Additionally, I wanted to record the call so I could share it here with my readers but something else happened before I called.  Less than 5 minutes later, Daniel called me back on my cell phone to provide me with the necessary pin number so I would be able to go back online and transfer the funds over to my PayPal account.

I did this as he patiently held on the line.  When I was done, I told him how much I appreciated his help, to which he replied, “Thank you and have a good day.” Anyone who knows me knows that I’m fond of saying, “all’s well that ends well” and that’s exactly what happened as you can see in the screenshot below.

Green Dot Successful Funds Transfer The Real Truth About Pre Paid Credit Cards From a ‘Former’ User

My “Aha” Moment
Let’s get back to that “aha” moment.  Why does anyone really go out and get a pre-paid credit card anyway? For me, that answer was; Citi Bank closed my checking account because of my credit, as I explained in my Underbanked Video, and I needed to find an alternative way to make payments while having access to my cash through a debit card.  But according to a Consumers Union Report called ‘Prepaid Cards: Loaded with Fees, Weak on Protections’ dated March 2012, Prepaid cards, or “general purpose re-loadable cards,” are marketed as sensible, attractive alternatives to check cashiers and traditional bank accounts (You should definitely read this entire report).

However,the report says that consumers face dangers and traps with prepaid cards, which are becoming the foundation of a second-tier banking system that shadows the traditional banking system.  If you read my UnderBanked post or seen the video, you would know that according to Core Venture Capital, the “underbanked” spend $45 billion dollars a year trying to handle their business!  And this “second tier” banking system that shadows the traditional banking system? The reason I got a pre-paid credit card in the first place? That same report shows that check cashing alone generated $2 billion dollars a year in 2011.

UnderBanked Screen shot The Real Truth About Pre Paid Credit Cards From a ‘Former’ User

Still… All About The Benjamins!
As you can see in the image above, $10.4 BILLION DOLLARS was spent by the underbanked in financial services alone which clearly explains the incentive of having a “second-tier” banking system.  Hit it Puffy: It’s all about the Benjamins baby! Uhh, uh-huh, yeah It’s all about the Benjamins baby!

And when it’s all about the Benjamins, then it’s time to kick it into high marketing gear y’all. Oh…sorry about that; I got caught up in watching the puffy All About The Benjamins video.   Let me get back to blogging :).  The Consumer Union’s report goes on to say the prepaid card industry began by putting out advertisements and other promotional materials with slogans like “The Checking Account alternative that lets you borrow money and builds credit,” “No Hidden Fees,” and “Bank On Your Own Terms.”  Slogans like “The Better Way to Bank” and “It’s like having a bank account in your pocket” continue to appeal to consumers who are looking for alternatives to credit and debit cards.  The report goes on to say that consumers may still be unclear about important differences between prepaid cards and traditional credit or debit cards and herein is where I’d like to bring some clarity by sharing my personal experiences and thoughts!

The Real Deal
While Puffy’s song still keeps playing in my head, the Consumer Union’s report states that sizable sums of money have been loaded onto prepaid cards in recent years and the numbers only continue to grow. In fact, a 2010 Federal Reserve Payments Study found “the use of prepaid card is the fastest growing” non-cash payment method.  Of course, Green Dot reported that in 2011 there were more than 4.2 million active cards and $16.1 billion in gross dollar volume of funds loaded onto its cards that year. (Cue that cash register again- Caching!)

For sure, as the report states, part of the lure of prepaid cards is that they can provide debit convenience to consumers who may not qualify or feel comfortable using bank accounts or credit cards, but for my money, here’s the real deal and the approach I believe anyone thinking or using a pre-paid credit card should take;

Are you looking to get a pre-paid credit card because you can’t open a checking account like I previously couldn’t? Then find a real bank that will allow you to open a checking account with a debit card just like I did. Call every single bank and credit union in your state, around your area, or within driving distance to find out if they pull a ChexSystems report in order to open that checking account. The one that doesn’t; that’s your bank!

Are you or were you a habitual check bouncer or prone to over-drafting your account? Well, if you use a pre-paid card, aren’t you only getting access to the money you uploaded to that card? Rhetorical question because the answer is; of course you are!  If you deposit $500 dollars and any transaction adding up to one penny more than that amount will be declined – plain and simple!  So go to that bank or credit union you find, open up your checking account, deposit your money, get your debit card, avoid using checks, and waive the bank’s “overdraft protection” program. That way, if your debit card purchase or transaction is larger than your account balance, the transaction will be denied and you won’t incur a fee!  Same as the pre-paid card.  Again, plain and simple, right? But….

There’s Always A But!
If there is no other alternative to a pre-paid credit card, then don’t get one at the Western Union, Walmart, or any check cashing service you’re forced to use because you are underbanked or off the financial grid.  Remember people; this is all marketing and they know exactly to whom they are marketing to!  You have options and even though we are all amateur consumers, you don’t have to be a mindless one, do you?  Get educated, become financially literate, and then march your rear end into a bank. Why?  Well, I can tell you it isn’t because I love how banks are treating consumers these days, because I don’t.  But that’s another topic, for another day.

The first reason is; you can walk into a major bank with lots of branches.  I couldn’t do this with Green Dot.  Chances are one of these banks has ATM’s near where you live or work which should allow you to withdraw funds, deposit checks, review your balance, and more… for free!  You can also review their full fee schedule before you accept their prepaid card, unlike buying it off a store shelf or while your paying a bill at some check cashing establishment.  Does this mean you can compare pre-paid options to the bank’s alternatives like a basic checking account with a debit card?  Again, rhetorical question because the answer is YES!

Regions Bank, where I opened my checking account, has a pre-paid option.  But so does Chase, Wells Fargo, PNC, BB&T and a whole host of other lending institutions.  My problem wasn’t one of not being financially literate or having a budgeting problem and bouncing checks.  It was a credit problem so I wanted and chose, traditional banking.  By the way, I didn’t order any checks and I declined any overdraft protection.  Honestly, as a creature of habit, I just got used to living that way.  Even through these past rough financial years, there was a silver lining to be found! You have to find what works for you and what helps your situation the best!

As for me; I’m done with Pre-Paid Credit Cards.  Do you have a pre-paid credit card story you want to share?  Lend your voice to this discussion and let yourself be heard by commenting below icon smile The Real Truth About Pre Paid Credit Cards From a ‘Former’ User