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

We've added the new Current by Discover prepaid debit card to the PrepaidCreditCards.cc website.

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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Visa-Branded Debit Cards More Popular Than Visa-Branded Credit Cards

If you've been questioning the popularity of debit cards, here's some irrefutable evidence -- in the form of a WSJ article -- that not only are they here to stay, they may even become more popular than standard credit cards in the near future. Here a clip:

"...'The reality is that the vast majority of consumers want to pay as they go,' said Stacey Pinkerd, who oversees Visa's debit-card business.

Visa's net income leapt 71% to $536 million, or 71 cents a share, in the fiscal second quarter ended March 31, from $314 million, or 39 cents, a year earlier.

The surging popularity of debit cards largely reflects the growing use of plastic by American consumers. Credit- and debit-card purchases of retail goods and services vaulted past cash and checks in 2003. Now the recession is giving many consumers second thoughts about their credit cards. Lenders also are making it more expensive to charge purchases and lowering credit limits on credit-card users.

The U.S. government said last month that the personal savings rate rose to 5% in January, the highest level in nearly 14 years. Revolving debt, which mainly reflects credit-card loans, fell 9.7% to $955.7 billion in February, the Federal Reserve said.

'A big group of consumers like the discipline that debit spending can bring them, and that is particularly relevant in this kind of environment,' said Tim Murphy, who oversees MasterCard Inc.'s main payment products around the world.

The Purchase, N.Y., company's debit-card processing volume rose more than 13% last year, compared with a 2.2% decline in credit-card processing. MasterCard, a Visa rival, is likely to offer more details about the spending habits of Americans when it reports quarterly results Friday.

Unlike credit cards, which have balances that can be carried month-to-month, debit cards immediately deduct funds directly from a checking account. Debit cards are especially popular with younger consumers.

Debit cards are less profitable for banks than credit cards, but merchants still pay banks to accept the cards. In the past couple of years, banks have encouraged debit-card use through rewards programs. Those rewards typically are less generous than credit-card rewards.

To be sure, growth rates of debit-card transactions have slowed as Americans rein in their spending. Volume is widely expected to climb by a single-digit percentage this year, compared with more than 10% annually during the past few years. But credit-card usage is expected to keep declining.

At U.S. Bancorp, debit-card transaction volume rose more than 2% in the first quarter from a year earlier. Credit-card purchase volume fell more than 4%.

'Consumers are being more conservative in the way they manage their finances and that leads to a greater willingness to put transactions on debit cards,' said Cliff Cook, chief marketing officer for retail-payment solutions at the Minneapolis bank.

The debit-card business also gets a boost from Americans who got their first card as teenagers a decade or so ago. "As these people move into the family stages and career stages of their lives, the level of their household spending on debit cards goes up," Mr. Pinkerd said..."

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