The Current by Discover Card: A New Prepaid Debit Card from Discover Financial Services

Current by Discover

We've added the new Current by Discover prepaid debit card to our prepaid lineup.

An Excellent Card for Teens

Prepaid credit or debit cards are very useful as teaching tools for introducing teens to the world of money and helping young adults learn about managing their money wisely.

With this new prepaid card from Discover, the fees are reasonable, but we were really impressed with the parental controls that are included with the card. Parents can:

• set monthly, weekly or daily spending limits. Lots of parents will appreciate this feature, especially if they have kids who need time to learn about budgeting and the pitfalls associated with overspending.
• get activity alerts via email or text message. Great for monitoring how a Current card is being used -- and there's no extra charge to use this feature.
• restrict a card so that it can't be used at certain locations, like tobacconists, motels or beer distributors.

Other features we like:

• There's no charge for funding the card
• No minimum balance requirement
• Free Direct Deposit, and there's no charge for depositing funds via a credit card or a bank account.

Users of the Current by Discover card can withdraw cash for free four times per month. Additional ATM transactions will incur a $0.50 charge per transaction.

A $3 fee is assessed for replacing a lost or stolen card, or for changing to a new card design.

Though the Current card has no minimum balance requirement, each card needs to be funded with at least $20 when a new account is opened.

The membership fee is $5 per month, but if you pay for a year's membership, the fee is $50 (a $10 discount.)

A parent can have up to 3 Current by Discover prepaid cards in their account, and each card has a funding limit of $2,500.00.

COUPON: When you sign up, use coupon code BT709 to get your first month of membership free. This coupon expires on May 30, 2010.

In this deep recession we're in, it's more important than ever to teach young adult about spending money wisely. Discover's new prepaid card is a timely payment solution that parents from all walks will appreciate, and I'm willing to bet that it's on its way to becoming the most popular prepaid debit card in the American market.

Oh, and the Current card has some very cool designs to choose from. Enjoy!

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Economic Stimulus: Give Everyone A Prepaid Card with A 6-Month Expiration Date

Now here's an idea I can vote for. Neeraj Nigam, who is making a second run (he was a Republican, but is now running as an independent) for Virginia's 10^TH Congressional District seat, had this to say about stimulating the U.S. economy:

"...Nigam opposes the so-called Wall Street bailout package passed by the U.S. Congress and supported by [incumbent U.S. Rep. Frank] Wolf. Instead, the federal government should give a $500 credit in the form of a prepaid credit card to every American and tell the public they have to use the money in six months.

'That would get money pumped into the economy and the economy would have to go up...'"

Full article can be found here.

Neeraj Nigam's election website can be found here.

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Protecting My Identity As I Build My Credit

I am not even 30 years old, and I have already had my identity stolen twice. It’s easy to assume that I may have been irresponsible with my personal information, or must have at least had my purse stolen before. There has to be a logical explanation, right? The fact of the matter is that I didn’t give out my social security number any more than anyone else going to school and working a job. I protect my belongings and my personal info like a lioness protects her cubs. Yet, it still happened, and it makes me more cautious -- even paranoid -- about the methods I use to rebuild my damaged credit.

A few years ago I learned that a woman in Wisconsin was using my social security number. She wasn’t buying extravagant luxury items on credit cards in my name. She was working and acquiring basic necessities, including average consumer credit, with my number. An expert in the field of private investigation informed me that oftentimes young people with average to slightly blemished credit histories have their social security numbers stolen and sold illegally to adults who do not have social security numbers, who need them to work and acquire basic necessities. If they do not go overboard in their spending and they pay their bills on time, their activities often go unnoticed.

I also had my identity stolen by a family member. Despite careful protection of my personal belongings, a desperate relative went rummaging for identification information - right after I openly stated that I had gone to the Secretary of State to renew my license. I didn’t put it together until after the culprit was discovered, but that didn’t happen right away. I had to argue with the local Social Security Administration office about when and where I applied for my last duplicate card before I realized that someone close to me had pulled a fast one.

I have always heard the gurus say that in order to build credit you have to have credit; using credit cards responsibly and spending less than you make is the only way. Well, how do you do that without putting yourself at risk? If someone gets a hold of my social security number, they will be able to access those credit accounts and use my credit illegally. What if someone intercepts my credit account statements? These days I protect my social security like the Hope Diamond, so I want to build my credit while using my social security number as little as humanly possible.

That’s why I like prepaid credit cards.

Your social security number is not connected to a prepaid credit card; you simply load it with cash and use only what you have on it. If someone finds your lost card, they can’t use it to follow any paper trail to your vital information. Since you can’t use cash to make online purchases, secure rental vehicles, make hotel reservations, etc., plastic is a must-have necessity for living. However, if you want to be able to live without your social security number being a big red target for thieves, you can use prepaid credit cards to do so.

I am particularly impressed with the AccountNow Visa because it includes credit reporting! That’s right, if you make bill payments with the AccountNow card, you can get positive credit reporting to assist you in building initial credit history or rebuilding damaged credit. It is truly possible to make strides toward a healthy credit score while minimizing personal risk.

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Social Security Payments To Be Distributed Via Prepaid Debit Cards

United States Treasury Department

The United States Treasury Department is going to distribute Social Security benefits via prepaid debit cards issued by Comerica Bank. Here's a clip from the Wall Street Journal article:

"...The card could mean significant cost savings for benefits recipients as well as the federal government, Treasury officials and banking experts say. People who sign up for the card will also gain faster access to their money and avoid some security problems, like stolen checks.

But there are some cardholder fees associated with Direct Express, and a significant education effort may be required to get users to accept and understand the card.

The debit card is part of a broader effort by the Treasury to move to electronic payments. In 2005, the department started its Go Direct campaign, which is designed to encourage benefits recipients with bank accounts to switch to direct deposit.

Many state agencies in recent years have offered prepaid debit cards to recipients of unemployment benefits or child support payments, and the Federal Emergency Management Agency in 2005 offered debit cards loaded with emergency-relief funds to hurricane victims.

'We've been working for a while to try to understand the needs of the unbanked,' says Judith Tillman, commissioner of the Treasury's Financial Management Service, which disburses most government payments. 'Combine that with problems we've seen with financial crimes and identity theft, problems with forged checks and stolen checks and so on -- the debit card seemed like the right answer.'


As many as 40 million U.S. households either have no bank account or make little use of banking services, according to an estimate from the Chicago-based Center for Financial Services Innovation. For these people to save effectively, 'the first step is to convert one's pay or benefits check into a convenient and usable form of money,' says Jennifer Tescher, the center's director.

In April, Treasury plans to begin mailings to encourage benefits recipients without bank accounts to sign up for the debit card and those with bank accounts to sign up for direct deposit.

For benefits recipients who sign up for the card, Social Security retirement, disability and survivor benefits as well as SSI benefits will be automatically loaded onto the card account on the designated payment day. Card holders will be able to use the card at ATMs, bank branches, retail locations and online.

Fifteen financial institutions competed to issue the debit card. Comerica was chosen because of its previous experience running state-government debit-card programs, its ability to offer features like text-messaging of low-balance alerts and its reasonable fees, Ms. Tillman says.

Comerica will earn money on cardholder fees, interchange fees when cardholders use the card at the point of sale, and the float on funds sitting in cardholders' accounts. Comerica estimates that there may be anywhere from 2.5 million to 10 million Direct Express card holders in five years. The company's government card business, begun in 2004, now has over two million card holders.

The debit card should mean cost savings for many Social Security recipients who don't have a bank account and who use check-cashing services to cash their benefits checks, banking experts say.

Cardholders will get one free ATM cash withdrawal per deposit per month, but Comerica will charge 90 cents for each additional withdrawal. Like other debit-card holders, users may also face surcharges at many ATMs. Other fees include $3 for international ATM withdrawals, 3% on international currency exchanges, 50 cents for each online bill payment and 75 cents per month for paper statements.

Cardholders can avoid surcharges at more than 56,000 designated ATMs, including those run by 7-Eleven and PNC Bank. ATM balance inquiries and cash withdrawals at a teller window will be free, and there will be no fees for overdrafts, declined transactions, or inactivity. Cardholders can opt to receive free deposit notifications or low-balance alerts via text message, email or automated phone call.The card should bring substantial savings for the federal government. The government's cost to issue a paper check was 89 cents in fiscal year 2006, versus nine cents for an electronic payment. Four million recipients of Social Security and SSI don't have a bank account. If each of them signed up for the debit card, the government would save $44 million a year, Ms. Tillman says.

The debit cards should be more secure than paper checks, the Treasury and banking experts say. In 58,000 cases last year, Social Security checks were forged, Ms. Tillman says. Nine times out of 10, problems with benefits payments are associated with paper checks, she says. The debit-card accounts are protected by PIN numbers and FDIC insured."

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