Debit use is up, and paycards are seen as an answer to high interest credit cards

As belts tighten across the U.S., people are turning away from high interest credit cards and are instead using debit, and some are buying prepaid cards. According to a Business Week article on msn.com, consumers are using the cards as a “budgeting tool to limit spending” or splitting the direct deposit with committed funds going to one account and the paycard receiving discretionary money.

More people use the internet to pay bills and make purchases and the subsequent decline in use means that electronic banking becomes more accepted. Some are also ditching their traditional bank accounts, choosing instead to deposit their payroll into paycards rather than other types of money management tools, such as traditional checking accounts. At Directo we've seen an increase in the number of accounts opened by customers who have other financial options. Directo accounts are checkless checking accounts, and can be used for payroll, bill pay and to receive payments such as social security benefits and tax refunds. Funds are held in an FDIC-member bank, which adds to the security of Directo accounts.

Today as never before, consumers are 'kicking the tires' before committing to financial services. Directo's proven stability and ten years of paycard experience gives our customers the assurance they need.

Does your paycard support electronic bill pay?

Prepaid Trends had a guest column November 6th on electronic bill pay, a feature gaining popularity with the internet savvy customer. Directo debit card holders have had this feature from the beginning, since 1998. Each Directo account is individually owned, and bill pay and auto debit are just some of features our customers enjoy.

The author of the Prepaid Trends article mentioned Payvox, a product that allows electronic bill pay via telephone. I've also seen small businesses, especially in Hispanic commercial areas, that offer billpay at computer terminals that the customer uses, with personal assistance for those who may not know how to operate them. Many public libraries offer their patrons computers with free internet access, and as long as the personal information is erased after using to keep information private, this is a good, free alternative.

Electronic bill pay is convenient, and for Directo paycard customers, free. The cost of postage, money orders and the time and hassle of organizing the payments are erased by learning how to manage a few keystrokes.

Directo's ease of paying bills online and scheduling electronic debits also erases the line between those who are banked and unbanked, as many who can have "brick and mortar" accounts choose the Directocash debit card because of its low cost, ease of use, and range of benefits.

Banks are raising noncustomer ATM fees - again.

Bankrate.com reports that folks are paying 13% more in fees to use ATMs that are not operated by their own banks. The combined fee, which is the "foreign" fee that the ATM owner charges, combined with the fee charged to customers by their banks, has increased to an average of $3.43, compared to $3.03 last year.

Remember when WaMu offered surcharge-free ATMs to everyone? Those days will probably never return (alas, WaMu didn't fare so well, either).

Atlanta's consumer advice guru Clark Howard says that people who pay high fees don't do their homework. At Directo, we agree. The Directocash Card is very economical when used wisely. Used at a point of sale and paired with a cash back request, the Directocash Card knocks out two transactions for under a dollar. Pay bills online, and you save even more. Electronic billpay is worth a blog entry of its own.