Prepaid Debit Card Reviews, Complaints, Etc

Author: Shane Tripcony

  • Best Prepaid Debit Cards.com Launches New Infographics Section

    Best Prepaid Debit Cards.com Launches New Infographics Section

    Best Prepaid Debit Cards.com recently launched a new infographics section in their Resources & Learning Center category. Our hand-selected or custom-designed infographics are an interesting, educational and entertaining way to pass along consumer personal finance information. We started the section with the first post about the Prepaid Debit Card Market in the U.S. Our first custom infographic educates consumers about celebrity prepaid debit cards and fees that may be attached. How do celebrity cards compare to other bank cards? You decide.

    Take a look at our Infographics page here. Check back as we will be adding new graphics all the time.

  • Infographics: Prepaid Debit Cards & More

    Infographics: Prepaid Debit Cards & More

    There are a lot of great infographics out on the web these days. Below you will find links to some of our personal favorites. If you see infographics in the personal finance space that we should link to or have ideas for us to create, please leave a comment.

     

    Celebrity Prepaid Debit Cards Smackdown

    Prepaid Debit Cards

    Celebrity Prepaid Debit Cards Smackdown

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      Prepaid Debit Card Market in the U. S
    Prepaid Debit Card Market in the U. S infographic
       

  • Retailers Celebrate Swipe Fee Ruling – Federal Reserve Caps Swipe Fees

    Retailers Celebrate Swipe Fee Ruling – Federal Reserve Caps Swipe Fees

    By Shane Tripcony

    It has been an issue of contention for a long time. The so-called swipe, or interchange, fees that retailers are charged every time a customer makes a purchase using a debit card have long been a boon for banks and the bane of retailers who have to pay them.

    Most recently, thanks to the Dodd-Frank law that passed in 2010, the Federal Reserve put a cap on those fees at 21 cents per transaction. Although banks screamed that the cap would cost them billions in lost revenue – and force them to eliminate perks and awards programs – retailers were never overly thrilled with the ruling, either, arguing that the fee was still artificially high.

    According to a report in Bloomberg, U.S. District Judge Richard Leon in Washington ruled on July 31 that the Federal Reserve considered information it shouldn’t have in arriving at its cap of 21 cents. Additionally, Bloomberg reporter Tom Schoenberg writes that Leon’s ruling determined that the Fed did not sufficiently foster competition among the card networks that levy the fees. “The board’s final rule not only fails to carry out Congress’s intention; it effectively countermands it!” wrote Leon in his ruling.

    Although the current swipe fee cap will remain in effect, the ruling means that Fed regulators will have to go back to the drawing board and come up with either a new or an interim ruling. Not surprisingly, the reaction to the ruling was split, with retailers cheering the decision and banks claiming it will do harm to banks and their customers. “The price controls enacted as a result of the Durbin Amendment served one purpose – further lining the pockets of our nation’s big-box retailers at their own customers’ expense,” Bloomberg quoted Frank Keating, the president of the American Bankers Association as saying. “It was – and still is – all about trying to help retailers increase profit margins while providing no real benefit to consumers.” By contrast, the National Retail Federation released a statement saying that the “decision is the first step in setting these initial wrongs right and will ensure that swipe fee reform is done correctly.” Although nothing concrete has been announced yet, it’s unlikely that the ruling will not be appealed.

  • A Card Level View Of The Economy Indicates Consumer Confidence On Upswing

    A Card Level View Of The Economy Indicates Consumer Confidence On Upswing

    It’s safe to say that we all have economic indicators that we like to examine in order to gauge the health of the overall economy.

    By Shane Tripcony

    For professional economists and academics, of course, there are reams of data about arcane sounding things like durable goods orders that help them determine whether the economy in the U.S. is healthy or ailing. For regular folks, though, the way to divine whether the American economic picture is brightening or darkening is through more subtle observations, like whether or not a favorite restaurant is bustling or the presence (or absence) of “for lease” signs along main street.

    But given the prevalence and use of credit cards in the U.S. economy, another solid indicator is the spending habits Americans have with their plastic. And that’s just what the quarterly Chase Freedom Lifestyle Index reports by tracking and sharing exactly how users of the Chase Freedom credit card truly spend their money. Chase, which is the consumer and commercial banking unit of JP Morgan Chase & Company, insists that this is a better way to measure overall consumer trends – and hence, the all-important mood of the consumers who power the U.S. economy – than more speculative opinion polls and surveys.

    The most recent version of the Chase Freedom Lifestyle Index, which measures spending from the second quarter of 2013, indicates that consumer confidence is on the upswing, albeit ever so slightly. Indeed, the index reports that year-over-year spending ticked up one percent from the second quarter of 2012 compared to the same time period this year. But once you dig down a bit more into the data, individual sectors of the economy seem to be doing both much better and worse than that general measure.

    For instance, spending on things like sporting goods and museums both rose by seven percent year-over-year, along with lessons and classes and books, which rose by six percent and eight percent, respectively. Most striking was a 14 percent rise in spending in the costume retail category, which seems to point to a busy prom and wedding season. Still, not all categories saw increased spending. Spending on gas slumped by seven percent from 2012 to 2013, as did the amount of money shelled out for consumer electronics.

    Even though no individual reading of the direction and strengths of the economy is complete by itself, this latest data dump by Chase adds to a growing body of evidence that the economy is moving (however slowly) in the right direction.

  • Green Dot Posts Solid Results Despite Increased Competition

    Green Dot Posts Solid Results Despite Increased Competition

    By Shane Tripcony

    One of the most prominent messages on the homepage of Green Dot Corporation, a longtime issuer of prepaid debit cards, is a simple one. “Big Banks, No Thanks,” blares a nearly screen-sized headline, which alternates between a promotional message about something consumers likely care a good bit more about: a chance to win a year of free gas.

    In many ways, this short, punchy salvo – which is buttressed with the message, “The Green Dot Card is the smart and easy way to manage your money,” along with a 5- question quiz that purports to answer whether a Green Dot Card is right for you – says an enormous amount about the state of the prepaid debit card industry today. It’s hardly a new flash to readers of this site, but large financial institutions of all sorts, including American Express and JP Morgan Chase, have begun offering prepaid debit cards in hopes of grabbing a slice of this quickly expanding and lucrative market.

    For prepaid debit card consumers, the attention of big financial players has been an undeniably good thing: fierce competition among rivals, some of whom are willing to forgo chunks of revenue in the short-term in order to gain market share, have put much needed downward pressure on fees and increased overall transparency. But longstanding industry players like Green Dot could be forgiven for not being thrilled with the prospect of tough competition that threatens to eat away at their profits.

    Still, Green Dot’s web page swipe at its competitors isn’t exactly an effort to mask the company’s weakness. In fact, on July 30 of 2013 the company announced results for the second quarter and Green Dot seems to be holding its own just fine, thank you. Indeed, the California-based company reported net income of $11.3 million for the quarter, which was 4 percent higher than the same period in 2012. Additionally, revenue topped $142million, which was also 4 percent higher than the previous year. At the same time, Green Dot provided an improved full-year guidance, announcing that it expects operating revenue to come in somewhere between $565 million and $575 million and earnings per share to be in the $1.05 to $1.20 range. The better than expected results prompted Green Dot’s shares to jump 16 percent the day after its announcement.

    “Despite aggressive competition from large financial services companies and rigid self-imposed risk controls that materially reduced new customer enrollment, we believe Green Dot remains the clear leader in the prepaid space and is well positioned for the future,” said the company’s CEO Steve Streit. And far from going on the defensive, Green Dot also unveiled a distribution partnership with the likes of Home Depot and Dollar General, which will up its nationwide presence by about 20,000 retail locations.

    None of this is to say that Green Dot doesn’t face challenges, as Motley Fool contributor Jordan Wathen goes at lengths to explaining a recent post, citing in particular the threat posed by American Express Company’s Bluebird card. But whatever the threats may be, it seems clear that Green Dot won’t be going away quietly.

  • The Battle Over Swipe Fees

    The Battle Over Swipe Fees

    When the so-called Dodd-Frank law passed in 2010, one of its measures was pretty easy to quantify. A sprawling, complicated and controversial piece of legislation aimed at taming the most egregious of abuses perpetrated by the financial services industry in the years before the 2008 financial collapse, Dodd-Frank also addressed the amount of money debit card issuers could charge retailers when a customer made a purchase with plastic. The Federal Reserve was tasked with deciding what the cap should be and eventually settled on a number just below 25 cents per transaction. Estimates on the impact of the ceiling on that fee– known as a swipe fee because it’s a charge that gets racked up when a retailer swipes a card – on banks and card processors come to around $8 billion annually, a hefty chunk of change.

    According to a recent report from Bloomberg News, banks and payment networks are working hard in state capitals around the country in an effort to prevent restaurant and clothing storeowners from charging their clients more to pay their tabs with credit cards than they do for debit card and cash transactions. According to the Bloomberg story, written by reporter Carter Dougherty, banks and their allies have already been successful in banning surcharges on credit card purchases in Utah, and around 20 other states are also considering bills related to swipe fees.

    In a nutshell, what the legislative initiatives in Utah and other states is aimed at doing is preventing retailers from urging – particularly through the use of surcharges – their customers from opting for cash or debit cards over credit. At issue, of course, is money. Banks and card processors are eager to keep as many customers as possible in the habit of using their credit cards when they buy a meal or an iPod; according to the Bloomberg report, card issuers earn between 1 and 3 percent of a transaction whenever someone uses their Visa, MasterCard or American Express card.

    Not surprisingly, retailers want to see swipe fees associated with credit cards as low as possible, contending that they are already too much of an unfair cash cow for banks. “I view the banks and credit-card companies as unwanted business partners. They do not work anywhere near as hard as I do, yet they collect nearly as much in fees as the average restaurant earns in profit,” wrote Ted Burke, the co-owner of the Shadowbrook Restaurant in Capitola, California, in the San Francisco Chronicle. “Business owners like me can negotiate virtually all of our costs, but we are powerless to negotiate swipe fees.” If banks and card processors are successful on the state level, many retailers also won’t be able to encourage customers to opt for lower fee debit cards. Under federal law, business a credit card transaction can cost a consumer more than a debit or cash purchase.

Prepaid Debit Card Reviews, Complaints, Etc