Prepaid debit cards are as good as debit cards or a bank account, so why wouldn’t a payday loan accept this form of financial instrument for payment? The truth is some payday loan companies will accept a prepaid debit card as payment.
What Kind of Loan is This?
A payday loan is a short-term, urgent-situation loan that helps consumers meet certain financial obligations and pay the money back over a short period of time. The good thing about Payday loans is that you can get credit without a great credit history. The name says it all. A payday loan funds you a borrow against your upcoming paycheck when the lender expects you to pay it back. So all you need to get a payday loan is a job with a paycheck.
What is a Prepaid Debit Card?
A prepaid debit card is a type of plastic card that is cash-backed. It’s available to anyone who wants one. Almost ten million households in the US cannot get a bank account. A prepaid debit card is a workable solution for these people. You deposit cash into it and it acts just like a credit/debit card. Though it’s usually issued by a bank, it’s not linked to a bank account. It behaves just like a bank account though. It is occasionally confused with a gift card because you deposit up front the money that becomes your balance. Rest assured, it’s not a gift card.
There are parts of a prepaid debit card that are very much like a bank card, but it doesn’t require a social security number because there are no credit functions associated with it. Usually, a prepaid debit card lists your purchases for a month or longer so you can print out your financial records. Banks issuing prepaid debit cards don’t keep permanent records. That’s another way it’s not like a bank account. You don’t build a financial history.
Parents often give prepaid debit cards to their kids so the children can learn how to manage plastic cards. The card will allow the teenagers to spend only the funds paid into the card. It won’t forward funds when the teenagers go over the credit limit. If the card bearer pulls out the card to pay for something at the store and it doesn’t have enough funds, the card will simply refuse payment. There’s no overdraft charge, so there’s no harm or foul unless the retailer gets mad. It makes sense for kids to use prepaid debit cards to get accustomed to plastic money cards.
Prepaid Cards and Electronic Deposit
One advantage of a prepaid debit card is that most of them accept electronic deposits. Your employer can automatically deposit your paycheck in a prepaid debit card. You can also have other types of payments deposited in the prepaid debit card like PayPal payments. That makes it much easier for you to pay your payday loan off quickly and conveniently.
One disadvantage of a prepaid debit card is that you do not develop a financial history that can be checked by a potential creditor. This is not an issue unless a consumer wants to use financial tools to restore their good credit. That should hardly dissuade you from getting a prepaid debit card. They’re particularly useful for Internet purchases and auto-pays. In addition, they’re a great way to pay back payday loans. To get a Payday Loan you need to meet the following requirements:
- You must be of age, 18 years old or older
- You have a prepaid debit card
- You have proof of income
- Someone can reach you on your telephone
Have Bad Credit?
If you have a credit history issues, a prepaid debit card will serve as a checking account when you cannot otherwise get one. That might be the reason so many millions of Americans use prepaid debit cards rather than bank accounts.
Payday loans, like prepaid debit cards, serve people with less than stellar credit. That’s probably obvious, but did you know that payday loans restore your good credit. It can raise your credit score. Whenever you borrow money from a lending institution and pay it back, you get a bump in your credit history, so it improves your credit score. Bring in a prepaid debit card when you apply for a payday loan.
The downside of a payday loan is that you must pay it on time. If you fail to pay it when you get your paycheck, the payday loan goes into default and interest rates become high. Also, servicing fees can be tacked on too. Suddenly, a fairly easy debt payment becomes difficult because it’s so expensive. You might have trouble paying it back.
A payday loan is a good way to handle short-term urgent situations which arise unexpectedly. If you have a budget, you can calculate how much money you need to meet basic expenses like groceries, rent, automobile expenses, entertainment and whatever else you pay a month. A budget is a great tool because it lets you move money around in your expense columns to make room for a payment to a payday loan company. If you have a good handle on your finances, a payday loan should work out for you.
You probably wouldn’t want to use a payday loan for something you intend to pay in installments because payday loans are for only a short time, and installment payments can take months and even years to complete. So don’t take out a payday loan to pay for an automobile for example. Don’t use a payday loan for a television set that costs thousands of dollars. Use it only for emergency expenses that you can pay off in the short time defined by the Payday loan.
This is a good guide to follow when taking out a payday loan. Set up a budget and get a handle on your finances. Only then can you calculate when you are spending month to month and determine whether a payday loan will work for you. If it works out, you can feel good that your payday loan will accept your prepaid debit card for payment.
Can I apply for payday loan that accepts Chime bank?
Not all payday loan lenders accept a chime card. The same goes for your bank account. It all depends on your bank and payday loan lender. Some of the common banks used are Chase, Citi, Capital One, and Discover. Most of the loans have an annual percentage rate ranging from 300% to 400%. If you have a Chime prepaid card, you can apply for a payday loan and wait for approval from direct lenders.
There are many requirements to apply for a payday loan.
- You must not have bankruptcy proceedings going on.
- You must be 18 years or older
- Have a U.S Bank account
- Receive monthly income.
The lender may ask you for information regarding your job, bank statements, SSN number, proof of income, and references. Chime card is one way to get a loan with a high cost rate. If you do not have a bank account that can approve credit, then that may be your option to apply for payday loans.
Can I get a payday loan with a prepaid card?
To get a payday loan with a prepaid card, you need to have been background checked and have at least $400. Companies use payday loans when they are in between pay checks. There may be other reasons that they could use the money. There is a chance that the company will fail because of not being able to pay back the money to the lender. This is where the prepaid cards come in. Digital bank accounts online are used along with prepaid cards. The prepaid card has a limit of $500 on it. If you want to obtain more funding, then you must withdraw cash and deposit into your personal account.
The prepaid card can also be recharged with cash back or debit card services should you run out of funds from using the card for bill payments. This card has many fees including $2 to activate it, $9 to use it, ATM charges and several others that I am unable to remember right now. When withdrawing cash directly from your Bank Account, you will not be charged these fees over $500. The reverse is true if you do not have enough funding in your Bank Account to cover the withdrawal amount of cash and this could lead to Bank Fees for overdrawing your account being charged to your account so it is imperative that should your Bank Account be linked with a Credit Card/Debit Card or any other type of payment method so that overdrafts don’t happen that would lead to Bank Fees being charged to your accounts.
This option is cheaper than using a credit card or even a PayPal account set up for invoices or Bill Payments. It could take 10 minutes or longer for a transaction to occur so don’t think that you can go and use the card like a current bank card and see instant results for it takes time to fund your account depending on where you fund from.