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Help! I Can’t Get My Money From My Prepaid Card

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Thousands of Americans who rely on prepaid debit cards to receive their paychecks, pay bills and buy necessities were stuck without money last week when a technical glitch locked them out of their RushCard accounts. RushCard, a popular prepaid debit card founded by celebrity Russell Simmons in 2003, is used by many low-income consumers without access to traditional bank accounts. The company says it has mostly resolved the issue, but some customers continue to report problems accessing their funds.

RushCard is just one of many prepaid debit card products out there. Still, the chaos its cardholders experienced over the last several days highlights the need for backup plans. Whether you use a prepaid debit card because it’s your preferred financial tool or you don’t have access to a bank account, it’s important to know what you can do if you suddenly find yourself unable to use it.

1. Stop Direct Deposit

One of the big benefits prepaid card companies tout is the ability to receive your paycheck as direct deposit. That’s generally faster than waiting for your employer to send you a paper check, and for people who live paycheck to paycheck, the sooner money is available, the better.

If you have a problem with or lose your prepaid debit card and realize you can’t use your account, you may want to stop direct deposit. In a statement on the RushCard debacle, the Consumer Financial Protection Bureau recommended people contact their payroll companies to stop the process and request a paper check or have it deposited into another account instead.

2. Borrow Money

It’s not ideal, but a taking out a loan could help you avoid serious financial problems when your main form of banking becomes unreliable. In various news reports, RushCard users have said they needed to ask friends or family for money to cover their necessary expenses while they couldn’t access their prepaid debit card accounts.

There’s also the option of the payday loan. It’s an industry rife with problems, and borrowers often find themselves taking out loan after loan as they struggle to repay the very high interest and fees, but payday loans are an available tool for quickly and easily borrowing cash during an emergency if you don’t have other financial options. If you do need to resort to a payday loan, however, it’s in your best interest to repay it as quickly as possible. Those unable to do so by the end of the loan term typically incur fees on top of the high APR.

3. Have a Backup

The RushCard episode is a good argument for having a credit card in case of emergencies. Of course, there are a lot of reasons people who rely on prepaid debit cards may not have credit cards, but if you’re someone who avoids credit or thinks it’s unnecessary, take note: You never know when you might need a backup.

The tricky thing with credit is you may suddenly find yourself in need of it, but you can’t conjure it up quickly. It takes time to establish a credit history that will help you access things like credit cards, so you’ll want to work on building a good credit score well before you might have to apply for credit. Once you get started, you can keep track of your progress by checking your credit scores for free every 30 days on Credit.com. Even if you don’t plan to borrow lots of money in the future, it may be a good idea to diversify your financial tools so you have options if your preferred method fails.

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