Beware of Debit Fees This Semester | 09.19.12
Students who have received financial aid in the past know the drill – the financial aid office receives the funds, applies them to the student’s account for tuition, room and board, and other expenses, then returns the remainder to the student. In the past, students have been given the option of receiving the refund by check or direct deposit, but this year, there’s a new option across many campuses – a pre-loaded debit card.
These debit cards (often endorsed by the school) may seem like a great idea up front (easy, right?) but students are warned to be cautious if selecting this method. These cards can come with high fees that can eat into your federal aid funds! Not ideal for cash-strapped students. Fees include things like “$0.50 to swipe the debit card using a PIN number, inactivity fees of $10 a month starting as soon as six months and overdraft fees as high as $38 per transaction” according to the Huffington Post.
Try this instead
Shop around – Rather than taking the school-endorsed card, shop around for a lower-fee option. Some banks offer free ATMs or reimburse for ATM use outside of your bank’s network. The bottom line is don’t settle, there are great debit card options for students, you just have to find them! Compare your debit card options to find which is best for you.
Go for the check or direct deposit option – Though issuing a check may hold up your funds for a little longer, you are guaranteed to receive the full amount your entitled to. No hidden fees, no drama.
Back in August, the Consumer Financial Protection Bureau offered a warning to students on the same issue and provided the following reminders to students:
- You’re not required to use a specific bank’s card
- Choose an account before heading off to school
- Sign up for direct deposit ASAP
These are some great tips for new or returning students. If you have had good or bad experiences with receiving your funds, the CFPB wants to know! Interested in telling your story? Head on over to the CFPB blog for more information.
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