Is it really that plain?
In a land of guns and revolution… some pot bellied hayseed can walk up with a badge and say gimme all you got. And walk away. And nothing?
Cowardice.
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No idea. I do know that there are millions of Americans who don’t have bank accounts. Perhaps they have other reasons for not wanting bank accounts. No credit unions in their area, and bank accounts suck up your money in fees unless you’ve got a lot in your account. It’s too difficult to get to a branch without a car. Maybe they just hate banks.
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Well, they DO have to take a second to decide on which suspicious behavior triggers the search and seizure.
As the CBC warned Canadians travelling in the US, this could be just about anything, including:
Don’t leave litter on the vehicle floor, especially energy drink cans.
Don’t use air or breath fresheners; they could be interpreted as an attempt to mask the smell of drugs.
Don’t be too talkative. Don’t be too quiet. Try not to wear expensive designer clothes. Don’t have tinted windows.
And there’s always the standard impossible to disprove catch-all, the officer declaring that he smelled drugs.
THEN they can proclaim it the probable proceeds of drugs or some other crime.
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Again, this isn’t just about pre-paid cards. They can also drain your bank account using your regular bank debit card.
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Wow, really? Two things. #1) there’s a bit of distrust with financial institutions in the first place, and there are not insignificant use rates for the lower echelon of even bank accounts. When you’re living paycheck to paycheck, having any chunk taken out counts. Add to that that there are a lot of people who have cruddy enough credit that they indeed cannot qualify for an account and you have… #2) See page 11 of the following link:
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Also, there’s a difference between a gift card and a prepaid debit card.
I’ll 100% buy that in the previously posited hypothetical situation of someone being found with a suitcase full of gift cards, that’s there’s likely something shady going on (which still wouldn’t justify equally shady theft by the police). But… There are prepaid cards that act just like a “normal” credit card (i.e. not a “gift card” associated with a particular merchant). These are the ones that I’ve seen a lot of people use to avoid carrying cash. Basically a no-name visa branded card that you have to pre-load to use.
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What’s the use case?
Being able to pay with a card if you have a ruined credit rating (or you are a minor).
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This is the most cogent comment I’ve ever seen you make. Cudos.
To make a long story short, I used to work in a not super fantastic area of town. Not bad, but not great, and on the edge of pretty bad (the parts of L.A. county that all those delightful gang movies were made about). Many of the people who had the “low end” jobs at the business I worked at used pre-loaded debit cards to avoid carrying cash. The logic was that you could use it for everyday expenses (groceries, gas, etc…) and didn’t have to carry around a lot of cash or pay usurious check cashing business fees.
So the question then becomes why did they use these cards, and not “what for”. Well, most of the people I know who did this had absolutely shitty credit. Generally poor enough that they had many missed payments on various things due to cash flow/liquidity issues (you know, like when you have to buy your kid the required school uniforms, but the utility bill’s also due at the same time, and you make near minimum wage…). To be honest, many of them weren’t really financially savvy, and came from a poor background with no context other than living paycheck to paycheck. That generally led to a lot of poor financial decisions that led to bad credit. With horrible credit, no assets to speak of, and very a non-impressive income income level, there either was no bank option, or the fees also became significant. So… pre-paid debit card.
I’m suspicious that there just may be a lot of fortunate people here on BB who just can’t imagine a situation where you simply can’t get a bank account, so you have to resort to choosing the least sucky of all of these rather predatory financial products. Between carrying cash (which likely will get you killed at worst or robbed at best), check cashing companies (which take a ridiculous percentage, and still leave you with the cash issue), and loading your paycheck onto a prepaid card (still with significant fees, but a lot “safer” than the other options), option #3 is a favored one for obvious reasons.
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Among the amenities missing in poor urban areas that not-poor areas take for granted are banks.
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Here in Winnipeg most inner city bank branches have been replaced with payday loan branches. Owned directly or indirectly by the banks they replaced.
I use prepaid debit cards. Not the ones from payday loan shops with horrific fees and conditions, but the ones from the local grocery store. I have no debt whatsoever - not even a credit card - and prepaid debit cards let me keep it that way. I use them for hosting and domain renewals, a monthly movie/music service payment and other occasional online purchases.
Sure, there’s a $4 one-time fee, but it’s the same whether you get a $25 card or a $200 card. I get only the $200 cards. There’s often a couple dollars left over at the end, so I use those to try out paid cell phone/tablet apps. Frankly, the service fees are less than for a regular credit card.
Using a prepaid debit card means that I don’t have to worry about my card number being stolen after an online purchase. The number is out there only AFTER my first purchase, so the most that can be stolen is well below $200. And probably below $2 a month after that.
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