Reloadable credit cards are Visa or MasterCard branded cards that are pre-loaded with your own money instead of being funded with a line of credit from a financial institution.
Your money can be deposited – or stored – on the card a number of ways – at retail locations and online are two of the most popular methods of loading cash onto these cards.
Using reloadable cards provide the convenience of using a credit card without much of the negative – particularly that of building an unbearable amount of debt that compounds with interest charges and fees.
There are generally a range of fees associated with reloadable credit cards, too, though, just as there are with traditional credit cards. Not all fees are bad and not all companies charge the same fees. Your habits and style of card usage will determine how much of these fees you actually pay.
We pay for services all the time. Knowing these fees exist and understanding what they mean gives you the power to evaluate each reloadable card offer with confidence.
Start by getting to know these terms:
- Activation Fee – The charge for making the card active and ready to be used.
- Weekly or Monthly Maintenance Fee – Service fee charged by the financial institution for maintaining your account.
- Bill Pay – A reloadable credit card may allow you to pay your bills from your card through an online website. Some institutions or card offers may charge a fee for this service.
- ATM – The charge for using an ATM for withdrawals, balance inquiries or transfers.
- Convenience, Load or Reload Fee – The charge for adding additional funds to your card. You might be able to have these fees waived for direct deposit or by meeting some other minimum requirement.
- Overdraft Fees – If you make a transaction with your card and the balance is not sufficient to cover the amount, your card holder may decide to cover that amount for you even though you do not have enough funds. An overdraft fee may be incurred as a result.
- PIN Transaction Fee – A fee for any transaction or purchase you make in which you are required to enter your PIN number to complete the transaction, such as a purchase at the grocery store.
- Direct Deposit – Servicing charge for processing your payroll direct deposit to your card balance. Many institutions offer this service for free.
- Online Account Management – The cost of having online access to your card details.
- Transfer Fees – If you transfer money from your card to another account or service, you may incur a transfer fee.
- Cancellation Fees – The charge the institution may require you to pay in order to close out your reloadable credit card and refund any existing balance.
In order to understand the true cost of a reloadable credit card offer, look through the institution’s application page for the terms, conditions, and fees of the card and read the fine print. Go to the application page for Account Now, click on the Compare tab, and select Get Fees and Pricing under More Information on the right hand side of the screen to see an example of a reloadable credit card fee schedule.
Make note of the fees that are likely to apply to you because of how you tend to use a charge card. Then read more about how to compare fees on different card offers to find your own unique, lowest cost offer.
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