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Article Title: A Simple Solution To Save On Prepaid Card Fees
Author: Bobby Tan
Category:
Word Count: 519
Keywords: prepaid card, prepaid credit card, prepaid cards, prepaid credit cards
Author's Email Address: [email protected]
Article Source: http://www.articlemarketer.com
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When you hand over your prepaid card to the cashier and he or she asks you,
"credit or debit", how do you reply? If you think there's little difference
between a credit or debit transaction, think again. You may be surprised to
learn your decision could have an impact on your pocketbook.
Prepaid credit cards offer their customers two ways to authorize a
transaction-by signature (credit) or by PIN (personal identification number).
PIN-Based Transactions
When you select the PIN option, you must enter your personal identification
number (PIN) to authorize the transaction. PIN-based debit charges are
believed to offer you greater safety and security, however there have been
reported incidents where consumers have lost money from PIN theft. PIN-based
debit transactions are typically made in person.
Signature-based Transactions
A signature transaction occurs when you use the prepaid card like a credit card
and sign for the transaction. Advantages of signature-based transactions
include the ability to make remote purchases via the telephone, mail, and the
Internet. Twice as many consumers use the signature option when conducting
their transactions.
Banks Profit From Your Transactions
Banks profit more when you sign for your purchases. When you choose the credit
or signature-based transaction, merchants usually end up paying the bank higher
processing fees. PIN-based transactions are generally preferred by merchants
because they pay less in processing fees.
Increasing Pin Transaction Fees
Because PIN-based transactions yield lower profits, banks have focused their
marketing efforts to persuade you to sign for most of your purchases. One
tactic banks use is to charge you a PIN transaction fee every time you enter
your PIN. PIN fees can range up to $1.00 per transaction. If you use the PIN
feature for most of your transactions, you could be paying more in transactions
fees.
Irresistable Rewards Programs
Another incentive banks use to get cardholders to sign for their transactions
is by offering an irresistable rewards program for frequent signature
transactions. You won't find the same great rewards for PIN-based transactions.
The Controversy Between Signature and PIN
Controversy exists among consumers concerning whether signature or PIN-based
transactions are the most secure. Most PIN-based card fraud involves theft of
your PIN data and the creation of a counterfeit card. Signature-based card
fraud occurs when a card has been lost or stolen.
Save Money With the Right Card
Before determining which prepaid credit card is best suited to your spending
habits, you must decide which transaction process you'll use the most,
signature or PIN. Once you decide on a preferred method to process your
transactions, you'll be able to search for a prepaid card with the lowest fees
for that particular method of transaction. You can find a card's signature or
PIN transaction fee schedule in the disclosure of Terms and Conditions page on
the card issuer's website.
You Can Find What You Need
With banks enticing cardholders to use signature-based transactions, you'll
have a harder time finding prepaid cards offering unlimited PIN-based
transactions. But don't give up hope, with a little diligence and research on
the Internet, you can find a prepaid credit card friendly to PIN-based debits.
Bobby Tan is a debt consultant helping people resolve bad credit issues. Find
Bobby's reviews of the hottest prepaid cards at Bad Credit Card Tips web blog.
Get Bobby's free 33 Days To Near AAA Credit course. Click -
http://www.badcreditcardtips.com
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