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When it comes to money, we all tend to be a little more on the cautious side. Now that banks, credit cards, businesses and other financial institutions have moved into the digital age, our cautious side starts to become more of a vigilant wall when we need to transfer money online. Hearing about the convenience that is provided online or with our smartphones sparks our curiosity.

One of the main things we do with our money, especially when there are assets to cover, bills to pay and multiple bank accounts to manage, is transfer our money from one place to another. The old ways to transfer money consisted of us physically going places and long waiting periods between the money being sent and received. Now, we have the ability to stay in our homes and transfer money online instantly, just as long as we have internet.

In order to transition from the old ways of money transfers to the modern version of transferring money online, we need to understand how online money transfers work and what to think about when we transfer funds online. Here are some basic pointers:

How Online Money Transfers Work

The steps to take in order to transfer funds online vary depending on the payment solution you are using. The way online money transfers work is through electronic funds technology. While this technology allows you to transfer funds instantly, they usually require a few basic pieces of information if you are transferring the funds to another person, such as an e-mail address and the name of the recipient. In some cases, they might ask you to create a question for the recipient to answer or provide a security PIN or a password. All of these steps give you extra protection when you transfer funds online and ensure that your money is secure.
When you transfer money online, it is at little to no cost. Some platforms may apply a low fee on the receiving end, meaning that the recipient may need to pay a small amount. This information can be found through your online money transfer service.

Make Sure You Are “In The Know”

Make sure you are using a reliable and secure online payment solution. When you transfer money online, the service you are using should be encrypted, thereby blocking any threats to your personal or financial information. Researching the various online payment solutions to see what kind of security they have will satisfy your need for safety when transferring money online.
Ensure that all of the information you are providing is accurate and up-to-date. If you are transferring funds online to another bank account, make sure to verify the bank account information. If the money is being transferred to another person, it is crucial that the recipient’s information is accurate, since that is the only way your money will be delivered to its proper destination.

Transferring funds online has become a secure and convenient way to make sure your money is where you want it to be. Keep in mind this important information and your search for an online payment service will go smoothly.

With the 2013 advent of the seven-day switch policy in the UK, you can, in theory, be fully transitioned from one bank account to the next within the span of one week. However, switching bank accounts is still a relatively big decision that can impact your other finances and doesn’t need to be made lightly. Simply because you can switch from one banking institution to another in just a few short days doesn’t mean that you necessarily should, especially if you have strong ties to the institution that includes other accounts and investments. Here are some reasons to avoid switching bank accounts.

Linked Accounts
If you have a chequing, savings, and mortgage account with the same institution, moving one of your accounts away can disrupt your transfer habits. When accounts with the same institution are linked online, it’s easy to transfer money. If you move money to another institution, it’s not quite as simple to get money from one account to the next. Likewise, if you and your spouse have accounts at the same bank and are able to easily send each other funds because you have linked the accounts – moving to a new bank will mean new hassles when it comes to sharing finances.

Easy Account Management
On top of losing the ease of transferring money from one account to the next, switching bank accounts also means that you can’t make all of your deposits with the same institutions. This means two trips to two banks to deposit checks and managing your accounting with two separate websites and apps. When you move to a new bank you can’t see all of your account data on the same screen and easily move money around within a few seconds. While it may be possible to send money from one account to a different one with a second bank, the transfer will never be instantaneous.

Fees
If you switch bank accounts at the promise of a free account, bear in mind that hidden charges may await you that your current bank doesn’t have. If you face large fees for deposits over a certain amount of money, for instance, moving to a new bank may not be worth it after all. Similarly, in order to enjoy the same leniency buffer on overdraft situations that you have with your current bank account, you may need to upgrade to a paid chequing account with your new institution. The future penalty fees and charges that you may be subjected to at a new bank must be considered when you weigh out whether or not to switch bank accounts. If they are greater than what your current bank offers, any other savings will slowly be negated.

History
When you have history with a bank you sometimes have more weight to your requests. For instance, if you want to get fees waived or open a new loan with a good interest rate, having a positive history may work in your favour. You can point out your loyalty to the bank when you are asking for a good rate or decrease in fees and they may oblige you to keep you on as a customer. On the other hand, if you don’t have a positive history with a bank simply because you are a very new customer, you may not have the same pull when it comes to getting good benefits out of your accounts. Keep your relationship with the bank in mind, and don’t switch if you have reason to believe that a lengthy relationship with the institution could work in your favour in the near future.

Switching bank accounts is a relatively big decision, especially when you have many bills that are automatically paid out of a current account. While the seven-day switch promises to make the change low stress, you may still need to ensure that all of your creditors have your new bank account information for payments. In addition, you should consider whether or not your new bank will have a convenient number of cash point machines in the right places. If getting cash from your account becomes a very difficult task, then switching bank accounts may not end up feeling like a very smart decision.

Prepaid cards represent an alternative for individuals who cannot or choose not to obtain a conventional credit card or a charge card. Just as with a debit card issued by a bank, the “credit” limit for a prepaid card is limited to the amount in funds that you have loaded onto the card. As a result, there is no possibility that you will incur finance charges on purchases that you have made with a prepaid card. On the other hand, prepaid cards carry a number of significant limitations.

Credit-Building Versus Standard Prepaid Cards

A significant limitation of many prepaid cards is the fact that they do not report the transactions of card holders to the three major credit reporting agencies in the United Kingdom: CallCredit, Experian and Equifax. However, a special category of prepaid cards do report user transactions to credit reporting agencies. Wise use of credit-building prepaid cards can help you establish or rebuild your credit.

Advantages of Prepaid Cards

Prepaid cards require no credit check. Minors are freely allowed to obtain prepaid cars. This is because prepaid cards limit your spending ability to the amount of funds loaded onto the card. Unlike a charge card or a credit card, you cannot go over your credit limit with a prepaid card. In other words, there are no credit-granting decisions associated with a prepaid card because no credit is being granted. In addition, many prepaid cards offer a direct deposit option that allows you to access funds deposited to the prepaid account earlier than would be able to access your funds by cashing a paper check.

On the other hand, you can shop with a prepaid card online and use your prepaid card to reserve and pay for plane tickets and hotel rooms. Prepaid cards also represent a safer way to carry liquid funds than carrying large amounts of cash. If you lose your prepaid card, or if it is stolen, you can receive a replacement within days, with little risk of losing your funds, even if your card is fraudulently used. In addition, prepaid cards are accepted in nearly every venue that accepts conventional charge cards and credit cards.

Disadvantages of Prepaid Cards

In many respects, prepaid cards are similar to charge cards, but with few of the associated prestige or advantages. You do not obtain access to exclusive airline lounges by flashing a prepaid card. Many prepaid cards do not offer rewards or points programs. On the other hand, prepaid cards carry significant fees, including annual fees, monthly fees and fees for ATM transactions. When combined, these fees can add up to be significant.

Except for their acceptance by merchants that also accept credit cards and charge cards, prepaid cards offer few of the advantages of a conventional credit card or a charge card. You do not receive an interest free loan with a prepaid card, and you cannot make payments over time. There are no balance transfer opportunities with prepaid cards. Except for credit-building prepaid cards, prepaid card activity is not reported to credit reporting agencies. This means that if you are attempting to rebuild or establish credit, using a prepaid card will have no beneficial effect at all.

Prepaid Cards Versus Debit Cards

For parents of young children, prepaid cards represent a safe alternative to cash. Kids can use prepaid cards to purchase nearly everything that they want, including snacks, ringtone downloads or online game credits. The vast majority of prepaid cards also allow cardholders to make withdrawals at ATMs when cash is needed. For nearly everyone else, however, including older teenagers, debit cards issued by banks represent a more desirable alternative to prepaid cards.

Unlike prepaid cards, bank debit cards frequently carry few or no fees, which makes them much less expensive than prepaid cards. Bank debit cards also carry logos that allow cardholders to use them for online purchases, for restaurant meals, for retail transactions and to reserve and pay for travel accommodations. Band debit card holders are also frequently able to take advantage of direct deposit schemes

Choosing a Prepaid Card

If you decide to obtain a prepaid card, it pays to shop around. Look for cards with the lowest direct fees such as monthly fees. You should also seek out cards with low or no transaction fees, as well as cards with low ATM fees. And if you are seeking to build or rebuild your credit, insist on a credit-building prepaid card.