How Do NetSpend Cards Work?

NetSpend is a leader in providing prepaid debit cards, Mastercards as well as Visa cards along with prepaid card solution commercially. After receiving a NetSpend card you will be able to activate it either online or through the phone similar to other debit or credit cards.

What Is A NetSpend Card?

A Prepaid debit card like a NetSpend card is different from a business credit card because you will only be able to spend the fund that you have loaded previously in the card. Basically a NetSpend card is not like any credit card. It is a way to make funds which you already possess through the technology of electronic payment of a credit or a debit card.

Credit cards are seen to offer a line of credit that is revolving and it can be paid back over time. Any outstanding balance on a credit card will charge interest and it also should be cleared off. By using one prepaid card you are actually spending the money that you own but if you use a credit card then you are spending some money that you have borrowed and it is expected that you will pay it back along with an interest at a scheduled date.

Several credit cards are seen to offer rewards because of spending in the form of point, cash back, etc. Most of the prepaid cards such as the NetSpend card do not act the same way. But credit card users need to spend some considerable amount of money on their card to get benefitted by such rewards.

One of the biggest similarities between credit cards and prepaid debit cards is the presence of a logo of the card network on them such as VISA or MasterCard. It implies that you can use the card anywhere if any of these payment methods are accepted there. If you use a NetSpend card it will not affect your credit score like a credit card.

How Can NetSpend Make Money?

NetSpend usually offers three service plans to its customers. There is a plan known as pay as you go and it is meant for those who actually expect to perform limited transactions. With the help of this plan, there is no such cost of opening up an account as well as no fee that you have to pay for a plan. Customers are seen to pay $1 every time they choose credit at any retailer and then make a buy and $2 every time they choose debit, enter the PIN and then make a buy. Customers never pay any fee for opening an account, but actually make payment for monthly plan. It allows purchases without any limit with the use of a debit or credit option at the retailers. To qualify for this plan customers need to make a payment in the payroll or direct deposits during the scheduled month.

This card also charges a fee for each withdrawal both domestically and internationally. There is also a nominal charge for every transaction decline at an ATM. For direct deposits as well as one account to another online transfer no fee is charged. But there is fee if a customer service agent is involved. It also charges retail card loading fees and it varies from one location to another. Mobile check loading fees and for external transfers via bank fees may be charged too.

How Does A NetSpend Card Work?

It offers VISA as well as MasterCard prepaid card to the customers. In order to issue these cards, financial institutions that are regulated federally and by state partner with the NetSpend. These cards allow the consumers to spend, withdraw, add as well as manage money. Customers are able to access some features like person to person transfer via bank, deposit of any employer or a government check directly, reward programs, text alerts, budgeting tool and an option of tiered-rate savings account.

One of the advantages of owning a NetSpend account is having an ability of transferring funds to users of other NetSpend cards very fast. It is called FlashPay. For example, if an individual and his friends is out for dinner and he wishes to send his friend who has picked up the dinner bill a sum of money, he needs to open his NetSpend app and select the option of sending money to his friend from his available balance. It is essential that your friend must have a NetSpend account too. You can transfer the money by making use of the app or by signing in to your online account. FlashPlay also allows you to transfer the fund between accounts that are part of varied financial institutions. It means that you can transfer the money from your own bank to your NetSpend card. It will also let you accept payment from others having NetSpend account and get those funds easily transferred to your card.

NetSpend cards are beneficial in many ways. You can easily add money to these cards via direct deposits, transfers via bank accounts and many more. If you do not wish to pay additional fee for adding funds then opt for direct deposit and transfer via online account centers.

Get An Idea Of A Crossed Cheque

A cheque forms a part of the active financial body and thus it is a vital tool for sending and receiving money without transferring cash physically. A cheque is known to be a vital document used by a person, organization or government for making transaction of varied values of funds.

What Is a Crossed Cheque?

If you wish to make a successful transfer of a cheque, it is crucial that as an issuer you maintain one a savings or current account in a certain bank branch. It will ensure a hassle free fund transfer process. Fund transfer via electronic modes have become so very popular these days, but cheque transactions are still considered to be a secure way of fund dealing with several business throughout the country.

Cross cheque is a cheque that is crossed along with 2 parallel lines may be across the entire cheque or via the cheque’s top left-hand corner. It means that you can deposit the cheque only into the bank account directly and can never be cashed immediately by any bank or other credit institution.

Why Should You Cross Cheque?

  • If cross a cheque it offers proper instructions to any financial organization about handling of fund.
  • A crossed cheque is identified by usually drawing either 2 parallel lines vertically across a cheque or on the cheque’s top left corner.
  • Words such as “and the company” and “not negotiable” might be present between the two lines. If the lines are not adjusted with words, then also it would not change the crossed cheque’s purpose.
  • With the help of crossed cheques, cheque writer might protect any amount that is transferred from getting cashed by any unauthorized individual or stolen.
  • The format of crossed cheques might vary between different countries due to its format and statements.
  • As crossed cheques can be paid only via bank account, any beneficiary’s record of transaction might be tracked later for any further query or clarification.

How Does A Crossed Cheque Work?

Using a crossed cheque will assist cheque writers to simply and effectively protect any cheque that they write. Crossed cheques are actually used in countries across Asia as well as Europe, Mexico and Australia.

It provides a certain instruction to a bank or financial institutions about how any fund should be handled. Commonly a crossed cheque is used to make sure that any bank deposits only the funds into one real bank account and never cashes it immediately upon receiving it initially. It offers security level to any payer because it needs the funds to be well handled via any collecting banker.

The exact format and words present on each crossed cheque can vary across nations but the very common thing that is involved in any crossed cheque is drawing of 2 parallel lines. “Account Payee” this phrase is also written on some cheque and it performs similar function of crossing a cheque.

If any cheque is crossed, as a payee you can never uncross it. Moreover the cheque will be considered to be non-transferable and it can never be transferred to any third party. The payee can only deposit it in that account which is in his own name.

The payer will be able uncross it by writing across the cheque’s front the words “Crossing Cancelled”. But it is never recommended generally. It eliminates all the protection a payer had originally.

In some payments like treasury and refund orders of Income Tax, you need to acknowledge an amount receipt along with the essential stamp which is needed for the refund of the order. But during cheque crossing, no such registration of official stamp is required under Stamp Act.

What Are The Types Of Cross Cheques?

  • General Crossing: It includes few words in between two lines that are drawn and symbolize the crossing of a cheque. It states that the bank on which the cheque is drawn will never permit the payment in another bank. So payment can be only done in that collecting bank.
  • Special Or Restricted Crossing: In such a scenario, the cheque contains the bank’s name with or without “not negotiable” words. It depicts that payment can be only done to that concerned bank.
  • Not Negotiable Crossing: It means that you can transfer the cheque but can never negotiate it. In these cases, the holder of the cheque will only bear the transfer title.
  • Account Payee Crossing: In this case, you can never pay the amount in another bank account apart from that mentioned in your cheque. If you practice an account payee crossing it will ensure that the amount of money gets transferred only to a bank account and is never given in liquid cash form.

Crossing one cheque offers proper instructions to a bank or financial institutions about how carefully funds should be taken care of. If a payee does not have funds for covering cashing of a cheque, the bank will be held responsible for any related loss.

Get An Idea About Cashier’s Cheque

A cashier’s Cheque is issued by a financial institution or bank to any third party on a customer’s behalf. A customer pays the Cheque’s face value to a bank. As the Cheque gets drawn on the fund of the bank, money is always guaranteed to be well accessible.

What Is A Cashier’s Cheque?

A cashier’s Cheque is a way in which money is transferred in a secure way. A personal Cheque always comes with a risk that it might bounce and get returned because of lack of money in the personal Chequeing account of the payer. But with one cashier’s Cheque, a payee is guaranteed that it will be cashed out successfully as the money is coming itself from a bank.

They aid making transactions that need a payment of sizable cash. Instead of carrying an amount of money, it is very secure to allow an employee of a bank to deposit the amount from a personal account to the account of the bank. In exchange you must be handed one cashier’s Cheque that is signed well. If the Cheque is lost or stolen, there are ways of recovering funds.

You will need to pay a fee to the bank of almost $10. But one cashier’s Cheque is an easier way of making a financial exchange that is secure and will get settled quickly. That is why a real estate transaction as well as agreements of large amount of money which cannot be placed on any credit or debit card will often need one cashier’s Cheque.

Why Will You Require A Cashier’s Cheque?

Despite of a huge number of latest options, a cashier’s Cheque is still famous for making substantial payment. You need to assume that the cashier’s Cheque is legal and thus the cashier’s Cheque is among those safest ways of receiving payment.

Assured Funds: Banks and credit unions get funds before a cashier’s Cheque is printed. The bank will either remove money from the account of an account holder or needs cash from those who requests a Cheque. Banks are seen to set that amount of money aside as well as due to this can assure that the Cheque will get cleared. It provides security to a recipient who sells something often. With the help of any personal Cheque, a Cheque will get cleared only if sufficient money is present in the account of the Cheque writer when a recipient makes attempt of depositing or cashing a Cheque.

Fast Accessibility: After a cashier’s Cheque is deposited, the recipient or the seller can make use of the funds immediately. The first few amount of money must be accessible within 1 working day in comparison to that of the personal Cheques. Financial institutions are given permission to hold any amount greater than $5000 or any such amount of money that they might suspect to be problematic. But a cashier’s Cheque is usually cleared much quickly compared to personal Cheques.

How To Avail A Cashier’s Cheque?

You can order a cashier’s Cheque from a bank or a credit union. Ask the bank regarding all the requirement of ordering a Cheque. Typically you will require funds to be kept available in your bank account or you will require bringing some cash to your bank. You can walk into the bank to get your cashier’s Cheque issued. Within sometime you will get a Cheque in your hand and can make payment to any recipient immediately. Some online banks will also let you request for online cashier’s Cheque. The bank will mail the Cheque to the verified mailing address of an individual. Thus you will have to wait for it and after that forward it to the payee. Your bank will require many details for issuing a cashier’s Cheque. Inform your bank what should be exact worth of the Cheque. That amount will be printed on the Cheque and it cannot be altered. Mention the name of the person to whom the Cheque should be paid that is the payee’s name. Add a memo or may be notes on a Cheque such as an account or reference number. If you visit your bank personally then carry a valid identification such as a passport or any other ID issued by the government. You need to make a payment of nominal fee for a cashier’s Cheque. Banks or credit unions will charge around $8 or may be so for each cashier’s Cheque. For covering this cost, you will require additional amount of money accessible in cash or present in the account.

Cashier’s Cheque when issued by a financial institution, bank or a credit union can be considered as a legitimate document. Thus they are much relatively safer. Sellers will view it confidently as the bank will promise to pay other than the individual who hands the Cheque to you.

Certified Cheque Vs Cashier’s Cheque: What’s the Difference?

Certified and cashier’s Cheques represent two forms of assured payment. So you will need them in several situations such as online business transaction, down payment, legal settlement, etc. to ensure that payment is complete. It depends on a payee, but there are some of vital points that must be considered.

What Is A Certified Cheque?

It is one type of personal Cheque that is drawn on a customer’s bank account. But it is different from a regular personal Cheque and is verified as a good Cheque by a bank or financial institutions. The bank actually confirms that the customer is having sufficient funds in his account for covering the Cheque amount.

Most of the banks as well as credit union are seen to issue certified Cheque. It is a safe way of payment if you do not wish to write or may be accept any ordinary personal Cheque.

A bank officer certifies on a Cheque that good fund was available in the fund of the Cheque at the time when the Cheque originated and that the signature present on it is authentic. The bank will set aside all funds and will only be using them for paying certified Cheque. If the Cheque is genuine, then you will not face any issue to deposit funds in your account.

As certified funds have been verified by a bank or a credit union that have issued the Cheque, recipients must be confident that there is fund for backing up that Cheque. If you providing anyone with a certified Cheque, you need to fill it out in the same way as you would have filled another Cheque. Write the name of the recipient on the Cheque, put an amount as well as sign it. A personal banker will verify the money in the account, put a stamp on the Cheque as certified and place hold on that amount of money. After the bank puts aside the money, you will not be able to write any Cheque or withdraw it against that amount. Banks are seen to maintain a hold on the amount until the recipient is seen to deposit or cash any certified Cheque.

So a certified Cheque will unlikely bounce and thus is a trustworthy way of paying for any item by a Cheque. These Cheques are great selection if you are going to make a purchase or require any paper trail as a purchase proof. Remember that obtaining any certified Cheque will need you to have one account at a bank that will issue you the Cheque.

What Is A Cashier’s Cheque?

It is issued by banks as well as credit unions like a certified Cheque and the procedure of getting it is also similar. But it is never drawn on an account of a customer. The amount of money is drawn from the own funds’ of a bank.

There is also another way of payment if you do not wish to make use of any cash, credit card or even write any personal Cheque. It is a safe method. Similar to a certified Cheque, a cashier’s Cheque can be used for several huge purchases. It includes down payment for a house, car as well as other transactions.

In order to request for a cashier’s Cheque, you need to provide the bank the recipient’s name and Cheque amount. The bank will print the Cheque as well as remove fund from the account immediately. Some financial institutions or banks are seen to issue a Cheque if you do not have any account with them. But you have to bring cash when you will request for the Cheque. Funds will be kept aside for the recipient and is there in the account of the bank till the recipient cashes it ore makes a deposit of the Cheque. This procedure will guarantee fund availability and make sure that any Cheque gets cleared.

What Are The Main Differences?

Both the Cheques come with relatively less risk if the Cheque in consideration is authentic. However, cashier’s Cheque is considered to be safer as the money is drawn against the account of the bank and never an account of any individual’s or business.

Fraud Cheque scams are seen in various forms. The very common one involves passing off one fake certified or cashier’s Cheque by a scammer as a purchase payment.

For instance a car is listed for sale via an online store. The scammer will contact you to inform that they are interested and provides you with a Cheque that looks official. It is provided for the car’s payment. After depositing the Cheque the bank will tell you that the Cheque is fake. You will not only be running short of money but you will also lose the car in the entire process. By law banks are needed to make money from the official bank Cheques such as certified Cheque and cashier’s Cheque that are available within a working day after depositing it to the account. Despite of having money in the account will not guarantee that it is a good Cheque. It can take up to few weeks by any bank for discovering that the Cheque fraud. By that time you will have either written Cheques or purchased things with the debit card against the amount. If such debit payments have been returned or if the Cheque bounces, it means overdraft or payment of non-sufficient fund fee for an individual.

There are several circumstances that make certified and cashier’s Cheque necessary. Purchasing any automobile, making payment for court fines, security deposit of rental housing or managing purchase transactions of real estate are some examples where these Cheques are of good use.

Cash Credit Vs Overdraft: What’s The Difference?

Cash credit and overdraft are popular financial terms. Overdraft is known to be one the oldest concepts in comparison to cash credit. Both of them are similar in several ways. But there are some differences between them.

What Is Cash Credit?

  • It is one such facility that is offered by banks or any financial institution for lending of short duration and is needed by a company or organization for meeting their credit requirement.
  • Cash credit is that credit amount that is provided till a limit which is pre-defined.
  • It is given for serving only business purpose if the customers have given company assert and papers, inventory and so on to the bank or any financial institution.
  • The cash credit limit is equal to the company’s working capital need.
  • The limit of withdrawal is determined by a bank and it varies from one to another.
  • Interest gets charged on the additional withdrawal.
  • It provides facility of cheque book.

What Is Overdraft?

  • This facility is provided by banks to the customers for withdrawing huge amount of money from the accounts than what is present in their accounts.
  • It is available usually to the customers’ of current accounts and if it is an exceptional case then to the holders of savings account.
  • The additional withdrawal is actually determined by the banks or financial institutions and actually varies from one bank to another.
  • Interest is actually charged on the amount of overdraft that is the additional amount which is withdrawn above any deposit.
  • It is repayable on any demand that is the bank may call a customer for repaying the amount at urgent notice.
  • Account holders can avail the facility of cheque book.

What’s The Difference Between Cash Credit And Overdraft?

Cash credit is commonly offered to business than to individuals. It needs a security that should be offered as collateral on an account in terms of cash exchange. This security may be one tangible asset like stock, raw material or any other commodity. The limit of credit that is extended on cash credit account is usually a percentage of collateralized security’s value.

Sometime a bank or financial institute offers cash reserve account but names it as a cash credit. It is a line of credit that is unsecured and acts similar to an overdraft protection. It offers higher limits of overdraft typically. It also has smaller real costs of interests on the funds that are borrowed than any overdraft, because penalty fees are never triggered for making use of the account.

 

The two types of overdrafts that are most commonly used are standard overdraft on any checking account as well as one secured overdraft account that will loan an amount against varied financial instruments.

Any standard overdraft refers to the act that involves withdrawal of more amount of money from one account than the fund or balance present in the account would allow. So if you have a $30 in one checking account and withdraw $35 for payment of an item, any bank that will permit overdrafts will cover that $5 as well as charge you a little fee typically for their service and not a huge penalty for overdraft. You will generally be charged a different fee for each of the purchase which is in excess of the balance present your account. But different financial institutions will handle all fees in a different way.

An overdraft that is secured will act more like one traditional loan. Similar to any cash credit account, a sum of money is lent by one institution, but there is a huge variety of collateral available to make use of for securing the credit.  For instance, you may be allowed to make use of shares of mutual funds, debentures as well as LIC policies. Usually speaking it is the possible only when any borrower owns one large account at a bank and has a relationship with the bank for a long term.

The process that grants short duration credit to any account holder when his balances get down below zero is named as an overdraft protection.

It comes in various types and differently functions on the basis of the relationship with the bank. Overdraft protection commonly links together two accounts, letting funds to be drawn out automatically from a reserve account when any primary account goes below zero balance. This function will aid to avoid fees for overdraft or having not enough money for executing any transaction.

It can be sold in the form of a distinct line of credit that is unsecured and is linked to the primary account. It acts as a loan for urgent situation during any overdraft. This kind of overdraft protection never comes with any overdraft fee but always charge interest on the balance of credit line. If you are a customer you can select the way of using an overdraft protection on an account and will also be able to move out completely for preventing the account from holding any negative balance. Consult with your bank for understanding the way overdrafts get treated for any specific account.

Cash credit and overdraft are two vital tools for fulfilling any capital need of an individual or company for short duration. Both are similar in various ways but the above mentioned differences can also be seen between them.