Financial instrument having loan proceeds and pre-paid characteristics

Abstract

Financial methods and systems for using a financial instrument are disclosed. A financial account includes both a loan balance portion and a pre-paid cash balance portion. The loan balance portion and the pre-paid cash balance portion are used in performing a purchase transaction. The purchase transaction is initiated by the account holder using the financial instrument. A prioritization scheme is selected that indicates an order of priority of the loan balance portion and the pre-paid cash balance portion of a financial account. A purchase amount is applied to the financial account according to the prioritization scheme. A transaction fee is not charged by the financial institution when any portion of the loan balance portion is applied to the purchase amount. And, a transaction fee is charged by the financial institution when no portion of the loan balance portion is applied to the purchase amount.

What is claimed is: 
     
         1 . A method performed in a financial system that includes a financial instrument, the financial instrument being associated with a financial account that includes both a loan balance portion and a pre-paid cash balance portion that are used in performing a purchase transaction, wherein the purchase transaction is initiated by the account holder using the financial instrument, the method comprising:
 receiving at a computing system selection of a prioritization scheme that indicates an order of priority of the loan balance portion and the pre-paid cash balance portion of the financial account that are to be used to fund the purchase transaction, the prioritization scheme is selected by a financial institution and configured to maximize an amount of transaction fees charged for the purchase transaction;   receiving at the computing system a purchase authorization for the purchase transaction initiated by the account holder using the financial instrument, the purchase authorization including an account identifier and a purchase amount; and   applying at the computing system at least a portion of the purchase amount to the financial account according to the prioritization scheme, the purchase transaction configured so that:
 a transaction fee is not charged by the financial institution when any portion of the loan balance portion is applied to the purchase amount; and 
 the transaction fee is charged by the financial institution when no portion of the loan balance portion is applied to the purchase amount. 
   
     
     
         2 . A method according to  claim 1 , further comprising:
 determining at the computing system an available balance of a loan balance portion of the financial account identified by the account identifier; and   applying at the computing system at least a portion of the purchase amount to the loan balance portion of the financial account if the available balance of the loan balance exists such that the loan balance portion is first used to cover the purchase amount before the prepaid cash balance according to the prioritization scheme received.   
     
     
         3 . A method according to  claim 2 , further comprising:
 applying at the computing system any portion of the purchase amount not applied to the loan balance portion to the pre-paid cash balance portion of the financial account.   
     
     
         4 . A method according to  claim 1 , further comprising:
 determining at the computing system an available balance of a pre-paid cash balance portion of the financial account identified by the account identifier; and   applying at the computing system at least a portion of the purchase amount to the pre-paid cash balance portion of the financial account if the available balance of the pre-paid cash balance portion exists such that the pre-paid cash balance portion of the financial account is first used to cover the purchase amount before the loan balance according to the prioritization scheme received.   
     
     
         5 . A method according to  claim 4 , further comprising:
 applying at the computing system any portion of the purchase amount not applied to the pre-paid cash balance portion to the loan balance portion of the financial account.   
     
     
         6 . A method according to  claim 1 , further comprising:
 receiving at the computing system first additional loan balance from a first financial institution; and   applying the first additional loan balance to the loan balance portion of the financial account.   
     
     
         7 . A method according to  claim 6 , wherein the first financial institution includes a payday lender where payment for the additional loan balance is due in full at the account holder's next paycheck. 
     
     
         8 . A method according to  claim 6  wherein the first financial institution includes a pawn shop that offers a secured loan to the account holder, with an item of the account holder's personal property used as collateral. 
     
     
         9 . A method according to  claim 6 , further comprising:
 receiving at the computing system second additional loan balance from a second financial institution, wherein the second financial institution is not associated with the first financial institution; and   also applying the second additional loan balance to the loan balance portion of the financial account.   
     
     
         10 . A method according to  claim 1 , further comprising receiving a direct deposit payment and applying the direct deposit payment to the loan balance portion and/or the pre-paid cash balance portion of the financial account. 
     
     
         11 . A method according to  claim 10 , further comprising first requiring that a direct deposit of a periodic paycheck be set up to obtain the financial account by the account holder. 
     
     
         12 . A method according to  claim 1 , wherein when a transaction fee is charged by the financial institution the transaction fee is charged on a per transaction basis. 
     
     
         13 . A method according to  claim 1 , wherein when a transaction fee is charged by the financial institution the transaction fee is charged on a subscription basis. 
     
     
         14 . A method according to  claim 1 , wherein when a transaction fee is charged by the financial institution the transaction fee is charged on a per transaction basis up to a set limit. 
     
     
         15 . A method according to  claim 1 , wherein the account holder selects the prioritization scheme. 
     
     
         16 . A method according to  claim 1 , wherein the financial account further includes a credit balance portion. 
     
     
         17 . A method according to  claim 16 , wherein the financial account includes multiple loan balance portions and multiple pre-paid cash balance portions. 
     
     
         18 . A method according to  claim 17 , wherein each loan proceed portion, pre-paid cash balance portion, and the credit balance portion have a configurable usage velocity schedule that dictates how often money may be added to the cash, credit and loan portions and how often money may be spent from the cash, credit and loan portions; and wherein the prioritization scheme received indicates one or more of the following:
 that all of the loan balance portion be spent before the pre-paid loan balance portion and credit balance portions are spent; and   that pre-paid cash balance be spent first, followed by loan balance portion then followed by the credit balance portion.   
     
     
         19 . A tangible computer readable medium which stores computer-executable instructions which when executed, the computer-executable instructions cause the one or more processors to perform the method of  claim 1 . 
     
     
         20 . A financial system comprising:
 one or more processors;   a first storage location for maintaining a loan balance portion associated with an account;   a second storage location for maintaining a pre-paid cash balance portion associated with the account, wherein the loan balance portion and the pre-paid cash balance portion are both tied to a financial instrument used in making purchases;   a non-transitory computer readable medium which stores computer-executable instructions which when executed, the computer-executable instructions cause the one or more processors to perform the following:
 receive a purchase authorization for a transaction initiated by an account owner, the purchase authorization including an account identifier and a purchase amount; 
 determine an available balance of a loan balance portion of an account identified by the account identifier; 
 determine if the available balance of the loan balance portion is sufficient to cover at least a portion of the purchase amount; 
 apply at least a portion of the purchase amount to the loan balance portion of the account when the available balance exists such that the loan balance portion is first used to cover the purchase amount; and 
 apply any portion of the purchase price not applied to the loan balance portion to a pre-paid cash balance portion of the account, wherein:
 a transaction fee is not charged by a financial institution when any portion of the loan balance portion is applied to the purchase amount; and 
 a transaction fee is charged by the financial institution when no portion of the loan balance portion is applied to the purchase amount.