Prepaid Debit Card Reviews, Complaints, Etc

Tag: dont-miss

Nine Tips for Avoiding Fees on Prepaid Cards

Fees are inevitable with prepaid debit cards. But there’s much you can do to keep them low.

By Lucy Lazarony

To get the most value out of a prepaid debit card, you’ll want to avoid and minimize all the fees that you possibly can.

“You want to understand the fee structure of the card,” says Jeanne Hogarth, Vice President of Policy, at the Center for Financial Services Innovation. “Are there fees to do balance inquiries? Doing things online generally should be free. If you need to talk to a real live person, can you do that and is there a fee?”

Monthly maintenance, transaction and reload fees are at the top of the list of prepaid card fees that you will want to avoid, according to Linda Sherry, Director of National Priorities for Consumer Action.

Sherry suggests these nine tips for avoiding fees on prepaid debit cards:

1)   Setting up direct deposit for your paycheck or other monthly income to avoid prepaid card monthly maintenance and transaction fees.

2)   Loading a certain amount onto your card each month.

3)   Maintaining a minimum balance on the card.

4)   Getting cash back when making a purchase at a grocery store or other retailer, instead of paying an ATM fee.

5)   Checking your balance by whichever method is free. (It’s very common to encounter a charge to check your balance at an ATM. Avoid card issuers that charge a fee to check your balance online or using an automated phone help line).

6)   Loading by whichever method is free (if there is one).

7)   Making transactions using whichever method is free (if either PIN or signature transactions are free).

8)   Avoiding transactions that go over your balance.

9)   Using automated “help” rather than a live customer service representative, if your issuer charges you for this, and viewing your statement online rather than getting a paper copy.

Once you’ve avoided all the fees on a prepaid card that you can, the next step is minimizing the fees you are required to pay for using the card.

“Scrutinize fees that are mandatory and cannot be avoided,” Sherry advises. “For example, a few cards offer fee-free transactions while others waive certain fees when you maintain a minimum balance or use direct deposit.”

And you may be able to avoid monthly fees because of how often you use a prepaid debit card, Hogarth says.

“Some cards even have no monthly fees but you have to use it five times a month,” Hogarth advises.

And if you like withdrawing cash at ATMs, Sherry recommends using network ATMs because “even if there is a fee, it will be less expensive than using an out-of-network ATM.”

A prepaid card issuer’s website may be the best source of information for a card’s fee information, according to Sherry.

“Fee disclosures may appear on the card packaging, but the card issuer’s website will probably be your best source of complete information,” Sherry says.

Digging through the fee information for prepaid cards could take some time. This fee list from Sherry provides definitions of 17 fees charged by prepaid card issuers.

“Unfortunately, there’s no law that requires a standard fee chart for prepaid cards but some issuers are more upfront about their fees than others,” Sherry says. “Before you buy a card, look for a prepaid card where the issuer discloses all the fees clearly. When you’ve narrowed down your options, calculate your monthly cost for each card based on how you expect to use it.”

September 30, 2013
Chase Cardholders Get Wined And Dined

There are already plenty of reasons for foodies to attend the Epcot International Food & Wine Festival, from September 27 until November 11. Given the global slant of Epcot, one of four theme parks located at the Florida based Walt Disney World Resort, the festival offers its gourmand visitors the opportunity to sample cuisines and drinks at over 25 different international marketplaces. Attendees will also have the chance to learn from professional chefs and bartenders, at special demonstrations and seminars, as well as hobnob with celebrity chefs.

All of these attractions, and many more, are available to anyone who purchases admission to the park. For holders of Chase debit and credit cards there is an added incentive to make the trek to Florida and attend the festival. Chase cardholders that attend the month-and-a-half long festivities will also have access to the Chase Lounge. Located on the third floor of the American Adventure Pavilion, within the Epcot World Showcase, the Chase Lounge provides visitors a quiet place to enjoy complimentary drinks and recharge mobile phones and tablets, among other things.

A sponsor of the now 18-year-old festival, Chase has collaborated closely with Disney for over a decade. Besides its Epcot sponsorship, Chase offers a range of Disney branded financial products including the Disney Rewards Visa Card. Last year Chase launched the Disney Visa Debit Card and the Disney Premier Visa Card as well.

The opportunity to get away from the festival crowds and recharge in the Chase Lounge is just the latest perk by Disney and Chase provided to cardholders. For instance, all Disney Visa Cards offer admission and merchandise savings at Disney World and Disneyland as well as the chance to meet Disney characters at an exclusive cardholder location.

September 26, 2013
Bomb Threats Over Prepaid Cards

The number of ways criminals are attempting to utilize prepaid debit cards increasingly seems to match the rapid proliferation of the cards themselves. As we have written about numerous times at BestPrepaidDebitCards.com, thieves have been especially attracted to the use of prepaid debit cards in a scam that involves turning people’s lights off: from California to North Carolina to Pennsylvania, reports about crooks posing as utility workers and threatening to turn off a victim’s power if they don’t pay a late bill using a prepaid card have prompted press release after press release and numerous news articles over the past few months.

While nobody wants to see their electricity turned off, another scam involving prepaid debit cards is even more alarming. According to a report in The Morning Call newspaper in Pennsylvania, a number of police departments in the area around Allentown were collaborating to investigate a series of threats aimed at local pharmacies.

In the article, reporter Manuel Gamiz, Jr. writes that the Upper Macungie Township police responded to a threat phoned in to a CVS on Sept. 18. “An employee had refused to load money onto a caller’s Green Dot debit card, and the caller said he would blow up the store,” reads the story. That same afternoon, police in Allentown also responded to the very same threat at another CVS. According to the article, it was the second time in two weeks that Allentown police had been called out to investigate a bomb threat at a pharmacy.

In each of these cases, police and emergency crews were dispatched to the pharmacies to determine whether or not any explosives were present. In each instance, nothing was found. This report out of Pennsylvania follows similar bomb threats involving prepaid debit cards made to pharmacies in and around New Orleans, Atlanta and Milwaukee.

September 24, 2013
Hackers Target Walmart MoneyCards

Walmart MoneyCard holders around the U.S. report being swindled

by Chris Warren

It has been a miserable month for a small number of Walmart MoneyCard customers. According to a story on the website ConsumerAffairs.com, a host of Americans who use the retailer’s general purpose reloadable prepaid debit card have had their accounts hacked recently.

In the piece by writer Jennifer Abel, Walmart MoneyCard holders in Missouri, Ohio and California all reported very similar experiences in which a thief in New York City drains victims’ accounts by getting hold of their account information and then making purchases at a Target in Brooklyn. One of the victims, Kelly L. from Canton, Ohio, complained that she checked her account balance on Sept. 9 and discovered that it had just $1.41, thanks largely to 5 purchases made at a Target in New York City the day before. “I am waiting for [Walmart] to send me a new card so I can get the amount owed to me, then I am closing my account,” she wrote.

In a follow-up story on Sept. 18 Abel wrote that Walmart had neither responded to her requests for comment nor resolved any of the earlier cases. Abel did, however, quote the Walmart cardholder policy, which urges anyone who believes their card or PIN has been lost or stolen to notify the company immediately. “You will not lose any part of the money on your card based on unauthorized use if you have exercised reasonable care in safeguarding your Card and PIN from risk of loss or theft,” it says. “However, if these conditions are NOT met, you could lose the lesser of $50 or the amount of unauthorized use from your Card before you notify us that your Card has been lost or stolen.”

In other words, the terms of the cardholder policy give some assurance that those who were victimized by the New York fraudster will get most, if not all, of their money back. But as Abel notes – and as we have reported on in the past – prepaid debit cards offer far less protection than debit or credit cards in the event they are lost or stolen. That said, if you are unfortunate enough to fall victim to a criminal, the most important thing to do is to alert the card issuer right away and continuously follow-up with the company to ensure that you get as much of your money back as possible.

September 23, 2013
Beware The Prepaid Debit Card Trojan Horse

The use of prepaid debit cards for tax refunds hurts the poorest citizens

by Curtis Arnold

It’s a cliché, but it bears remembering: if something sounds too good to be true, it probably is. And to be sure, the prepaid debit card industry has a long and ongoing legacy of hyperbole, with card issuers saying plenty about the ease and convenience of their plastic products and precious little about often-predatory fees.

Obviously, it’s no surprise whatsoever to see companies with wares to hawk ignore or downplay the perils of prepaid debit cards and instead tout their benefits. But increasingly it is presumably impartial and consumer-oriented governments that are extolling the wisdom of using prepaid debit cards to deliver tax refunds to the millions of Americans – 17 million adults, or 8 percent of all U.S. households, by the Federal Deposit Insurance Corporation’s (FDIC) latest tally – who lack bank accounts and can’t take advantage of direct deposit.

The arguments government officials in states like Oklahoma, Connecticut and Virginia make in favor of utilizing prepaid debit cards to deliver tax refunds to so-called unbanked citizens sound persuasive. For the citizens themselves, receiving a refund via a prepaid debit card instead of a paper check means they’ll get their money weeks faster than if they had to wait for snail mail. Speed is no small matter for many low-income Americans who use their refunds to pay off high-interest payday loans that they may be forced to take while waiting for a check from the U.S. Treasury.

The governments themselves also insist that prepaid debit cards are a boon to all taxpayers. The crux of the argument is that cash-strapped governments can garner big savings by delivering refunds electronically with prepaid cards instead of printing and mailing physical checks. At least one study reported that it cost nearly $1 more to mail a check than to deliver an electronic payment.

In this era of belt-tightening austerity, that sort of taxpayer-saving government efficiency is to be cheered, right? Not exactly. Persuasive new research by John Friedman, an assistant professor of public policy at the Harvard Kennedy School, dismantles the deceptively alluring argument that tax refunds delivered on prepaid debit cards are good for everyone. In an article at Bloomberg Law, Friedman concedes that state governments can trim their own costs by switching from paper checks to prepaid debit cards. But the problem is that many of the hefty fees associated with prepaid debit cards – such as an account set-up charge and fees for taking money out of an ATM – are pushed off on to the taxpayers receiving the refunds. In his research, Friedman cites data from the now discontinued federal tax refund program in which taxpayers received money on a MyAccountCard. Recipients of refunds on that particular prepaid debit card paid an average of $19 during the first six months of use, an amount far and above the $1 governments save.

What is particularly troubling about this rush towards offering – and sometimes actually mandating – those who don’t have bank accounts receive their refunds on prepaid debit cards is who is being impacted. Unbanked Americans are typically poor. Forcing the poorest among us to shoulder what amounts to a minimal government cost savings sounds too bad to be true. Unfortunately, it increasingly is.

September 20, 2013
The Occupy Prepaid Debit Card Announces Fees

In an announcement that was equal parts press release, fundraiser and call to arms, the Occupy Money Cooperative unveiled fees for its new prepaid debit card.

by Chris Warren

The Occupy Movement marked the second anniversary of its Wall Street occupation in a way that few would have expected when thousands took to the streets of New York to express their unhappiness with what they declared to be a rigged financial system: by asking members of the 99% for money and releasing proposed fees for its very own prepaid debit card. On Sept. 16 the so-called Occupy Money Cooperative, an entity formed last July to offer financial products and services, officially launched a fundraising campaign to raise enough capital to become an actual player in the financial services industry so many Occupy supporters loathe.

“It’s finally time!” declared a mass email to Occupy supporters on Sept. 13. “We are launching a crowd-funding campaign to kick-start an innovative, democratic, transparent and cooperatively-run company to provide access to low-cost, high-quality financial services to everyone.” Raising sufficient start-up capital to actually be able to issue a prepaid debit card, let alone any other products and services, is just the first of many hurdles the Occupy Money Cooperative will face – an issue we examined in detail earlier.

Challenges aside, Occupy’s foray into the prepaid debit card space – with the group’s avowed commitment to not maximize revenues and profits – has the potential to shake-up the industry. That possibility was buttressed when details about the Occupy Card, which will be covered by Federal Deposit Insurance Corporation (FDIC) insurance, and its fees were released just days before the group began its fundraising efforts.

To get a sense of just how different the Occupy Card’s approach to business is from other prepaid card issuers all one has to do is note the inclusion of a box called “How To Avoid” on its proposed fee schedule. If that’s not enough, take a look at the proposed rock-bottom fees themselves. For instance, there is no initial purchase charge for the card, a fee that usually runs an average of $1.15. More importantly, the monthly fee for the Occupy Card is just $0.99 – and there’s no charge if you load enough money onto the card to become a No Monthly Charge Member – compared to the average monthly fee of $4.88.

It’s also free to load money onto the card via direct deposit – which is standard among the more consumer-friendly prepaid cards – although adding cash using MoneyPak or Swipe Reload at 7-Eleven and CVS stores costs $4.95, (a fee charged by the stores and not the Occupy Money Cooperative). To get around this charge, the fee schedule offers up this tip. “If you can, use Direct Deposit, or deposit checks and wait – these methods are FREE. When using MoneyPaks remember 3 $100 deposits will cost $14.85. A single deposit of $300 will cost $4.95.” And so it goes with the other fees. Getting cash from an ATM will run $1.95 due to network and third party fees (“Instead, use cash back from stores,” advise the Occupy Card issuers).

Not all fees can be avoided. For instance, a card replacement runs $9.95 because it requires printing a new one (advice: “don’t lose your card”). Still, if the Occupy Card gains traction, it very well could change the financial services industry in a way that sit-ins and marches never could.

September 19, 2013