Prepaid credit cards.

Quote from ARogueTrader:



My understanding is that the amount of money available in these pre-paid cards is not actually stored in the information on the card itself.

What happens is you buy a blank card that has a serial number on it. The magnetic card actually contains the serial number of the card, and maybe some anti-theft info.

They you "charge" the card, and the amount "charged" to the card (pre-paid) is stored on an internet gateway of a company like Shift4. The "charged" amount is the pre-paid amount of the card.

When you go to swipe or use the card, the internet transaction runs through the following steps.

1. The swipe is made or the number is inputed.

2. This info is sent via the internet to a server that tries to capture an amount requested from the account where the funds are stored (the pre-paid account).

3. The amount is deducted (if sufficient funds are available) and the balance post sale/capture is recorded for the next transaction. The sale is rejected if the amount of the sale exceeds the amount in the pre-paid account.



Not unlike a credit card, is it?
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Now you are contradicting yourself. i thought you said above the benefit was that the card had the info stored locally, so the vendor didn't have to have an agrement with the card issuer. Unless I misunderstood you.
 
Quote from ElectricSavant:

I like a chip in a card idea....better than a pre paid...


Hey Marketsurfer....ground floor opportunity...I'm calling CNBC.


Michael B.
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That's the definition of a smart card. They are used all over in Europe and have been for some time. The US hasn't picked up on it yet b/c banks have to invest into new infrastructure (like the card readers etc.)
 
Quote from ARogueTrader:



If the debit card is lost or stolen, the amount at risk is only the amount in the account.

Those who have had their credit/debit cards lost or stolen know the hassle involved in getting set up again.
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At least there IS some consumer protection with a credit/debit card. What is there with a pre-paid card? Zelch, Nada. Lost or stolen tough love.

The banks love this. It is all about positioning themselves to make the most of fees, interest and money disappearing into unused, stolen and lost cards.
 
Quote from Bruto Blukowski:



At least there IS some consumer protection with a credit/debit card. What is there with a pre-paid card? Zelch, Nada. Lost or stolen tough love.

The banks love this. It is all about positioning themselves to make the most of fees, interest and money disappearing into unused, stolen and lost cards.
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There may be protection if the card that is lost or stolen is reported, I don't know.

As the system evolves, there will no doubt be some that offer protection, and others that don't.

What happens when a pre-paid calling card is lost or stolen, or a cell phone with pre-paid minutes?
 
Quote from vladiator:




Now you are contradicting yourself. i thought you said above the benefit was that the card had the info stored locally, so the vendor didn't have to have an agrement with the card issuer. Unless I misunderstood you.
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Some may have the information stored locally, don't know.

The pre-paid gift cards that work with Shift4 are as I described.
 
Could you give the benefits that you see with prepaid cards again.

It is a little unclear to me.

Here are my observations as to the benefits:

  • possibly every retail location could be a place to make a deposit
  • if you do not want a bank account and want to be anonymous you can still have plastic
  • companies can manage expense accounts easier
  • merchants benefit from no chargebacks.
Debit cards all of the above except for deposits and anonominity.

Credit cards all of the above except for float, disputes and deposits/payments and anonominity.

Now if the card has a local chip in it which I believe American Express does....not sure though....then online transactions will require hardware and loss of card is all on the consumer.

Does this about wrap it up?

Michael B.
 
Quote from ElectricSavant:

Could you give the benefits that you see with prepaid cards again.

It is a little unclear to me.

Here are my observations as to the benefits:

  • possibly every retail location could be a place to make a deposit
  • if you do not want a bank account and want to be anonymous you can still have plastic
  • companies can manage expense accounts easier
  • merchants benefit from no chargebacks.
Debit cards all of the above except for deposits and anonominity.

Credit cards all of the above except for float, disputes and deposits/payments and anonominity.

Now if the card has a local chip in it which I believe American Express does....not sure though....then online transactions will require hardware and loss of card is all on the consumer.

Does this about wrap it up?

Michael B.
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They may help in laundering cash....
 
Quote from vhehn:

the best credit card is the gm credit card. you get 5% back on all purchases towards any new gm car. i use this card for everything including insurance food and utilities. even though i pay the bill every month and have never paid them a dime in interest they give me 5% back on everything. looks like the closest thing to free money i have ever seen.
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I like the Hilton HHonors American Express card. You can earn miles and points for each stay at one of the many hilton brands. Also you get 3 points per $ spent. In 1 1/2 years I've already saved enough points to stay in any Hilton hotel throughout the world for 12 days. You can also use your points for cruises, airplane tickets, merchandise, car rentals, etc and it's a great way to get upgraded at many hotels. Some hotels are $600 a night. There are literally hundreds of ways to earn additional hilton points. I found that you get an average .03 - .06 per dollar spent if you use your points for the very expensive hotels.

I checked out the GM card but there is a limit on how much you can spend on each car. You can only apply $1,750 tops on most cars. So you can earn all you want but you can only apply $1,750 per car. Not that great a deal.

Kev
 
Thanks Kev for the info....you just ruined VHen's day...

Michael B.



Quote from Kevmeister:



I like the Hilton HHonors American Express card. You can earn miles and points for each stay at one of the many hilton brands. Also you get 3 points per $ spent. In 1 1/2 years I've already saved enough points to stay in any Hilton hotel throughout the world for 12 days. You can also use your points for cruises, airplane tickets, merchandise, car rentals, etc and it's a great way to get upgraded at many hotels. Some hotels are $600 a night. There are literally hundreds of ways to earn additional hilton points. I found that you get an average .03 - .06 per dollar spent if you use your points for the very expensive hotels.

I checked out the GM card but there is a limit on how much you can spend on each car. You can only apply $1,750 tops on most cars. So you can earn all you want but you can only apply $1,750 per car. Not that great a deal.

Kev
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