How to send money to a wisely card

Question

Stored Value Cards can be obtained in a number of ways. You may get a payroll card from an employer, an electronic benefit card from a government agency, or a phone card or gift card from a retail store. Multipurpose prepaid debit cards are usually obtained by telephone, online, or at check-cashing outlets and money transfer company locations.

The Positives:

Reloadable multipurpose Stored Value Cards may provide a banking alternative to people who do not have access to a bank account.
You will not create new credit debt by using a Stored Value Card. You are spending your own money.
You can book hotel rooms, purchase airline tickets, rent cars, buy concert tickets, shop online and pay bills by phone or the Internet without a credit card.
Transit system fare cards are Stored Value Cards. They are useful for charging different fares for different services and can automatically discount fares for seniors and persons with disabilities. In some cases they can even be replaced if they are lost, stolen, or damaged.

The Negatives:

A Stored Value Card does not have your name on it and generally no refund is available if it is lost or stolen.
Stored Value Cards do not report spending and payment habits to a credit reporting agency, so having one and using it responsibly won't help build credit or repair damaged credit.
There can be fees associated with pre-paid cards that can lower its value. Some of those fees include:
- Entrance/Activation fees
- Maintenance fees
- Monthly fees
- Annual fees
- Point of Sale fees (using the card in a retail store)
- ATM transaction fees
- Out-of-network and/or International ATM transaction fees
- Transaction limit fees
- Bill payment fees
- Phone or online transaction fees
- Money transfer fees
- Inactivity fees
- Dispute fees
- Reload fees charged by third parties to put more money on the card.

Secured Credit Card
A secured credit card is a card that has been secured by money, provided by you. The money is placed in a bank account by the issuer of the card, and acts as collateral, or a "guarantee" that you will use the card responsibly. The card looks and acts like an unsecured credit card, but if you default on paying the amount due on the secured credit card, the issuer can apply your security deposit to the outstanding balance.

The Positives:

Secured credit card accounts are reported to the three major credit reporting agencies (CRAs).
The accounts can be used by consumers who don't qualify for regular credit cards due to having no credit history. They can also be used to repair a poor credit history.
Some companies will provide an unsecured credit line after a certain period of timely payments.
Most banks or card issuers will pay interest on your security deposit.

The Negatives:

Every secured credit card charges an annual fee and those fees can vary dramatically.
Secured credit cards charge higher interest rates than regular credit cards.
Some cards will charge an application fee or require that you purchase an insurance policy for a fee.
Some issuers will report the account to the CRAs as a secured card which may affect your credit report.
Using a secured card will not necessarily guarantee future approval for an unsecured credit card.
Once you close the account the issuer may keep your deposit for a few billing cycles.
Some issuers will charge other fees including fees for cash advances, late payments, charging over the limit, insufficient funds, and for accessing account information.
Some issuers may limit the number of transactions in a given time period to protect against overdrafts.

Store Charge Card
Store charge cards are credit cards that can only be used at the store that issued them. They often charge a high interest rate: familiarize yourself with the terms of the agreement.

Travel & Entertainment Card
Travel & Entertainment cards are charge cards that function like credit cards but require that you pay off all of your charges in full each month. These cards include cards such as American Express or Diner's Club.

Credit Card Terms and Fees

The Consumer Financial Protection Bureau (CFPB) is the federal agency charged with protecting consumers in the U.S. market for financial products and services. The CFPB's Know Before You Owe: Credit Cards page offers important information about credit cards.

The CFPB takes a survey twice a year of the terms of credit card plans offered by some of the largest credit card issuers in the country. In addition, the CFPB's database of credit card complaints and complaint responses informs the public about complaints. Its database of credit card agreements, from more than 300 card issuers, features general credit card terms and conditions, pricing, and fee information.

Although the credit terms and agreements provided by the CFPB are subject to change and you should contact issuers for current rates, fee, and other types of plans, the CFPB complaint database, credit card plan survey and agreement database are good places to start if you are shopping for a credit card.

If you have questions about the information on this website contact the Department of Financial Services. If you have questions or concerns about the information offered on the CFPB website, contact the CFPB directly.