Prepaid Debit Card Reviews, Complaints, Etc

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What is A Prepaid Debit Card? Glossary & Common Terms

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Courtesy of Linda Sherry, Director of National Priorities for Consumer Action, here is a comprehensive list of fees associated with prepaid debit cards.

by Lucy Lazarony

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What is a Prepaid Debit Card? Glossary and Common Prepaid Debit Card Terms.

Purchase fee. This is a one-time charge for buying the card, generally in a retail location.

Activation fee. A one-time charge that is also known as an opening fee, initial load fee or set-up fee, can range from free to $30 or more. This is a fee that must be checked carefully, particularly if you also have to pay to buy the card (see purchase fee above).

Monthly “maintenance” fee. This is a common fee that can vary widely, up to $10 per month; may be reduced or waived if monthly reload minimum is met or you set up direct deposit; some cards may also charge an annual fee.

Reloading fee. This fee is charged for adding funds to the card, which can vary by type or source of funds (cash, for example); third-party fees for cash loads made at agents (such as a participating chain of stores) also may apply.

Funds transfer fee. This kind of fee may be charged on certain funds transfers, such as from one card to another or from a bank account to the card.

Purchase transaction fee. This fee may be waived with a minimum number of transactions in the month or with direct deposit; may be charged on debit (personal identification number, or PIN) transactions and not on credit (signature) transactions, or vice versa.

Click HERE for our current ratings of the Best Prepaid Cards including the Best Overall No Fee Visa Card and see how this card compares to others.

Denied transaction fee. This fee may be charged if you try to make a purchase or an ATM withdrawal that exceeds your account balance.

Overdraft (or shortage) fee. This type of fee is charged by the relatively few cards that will allow you to spend more than you have loaded on the card; typically ranges from $10 to $25 or more.

Cashier withdrawal fee. This fee may be charged when cash is withdrawn at a bank or an agent location.

ATM withdrawal fee. A fee charged for withdrawing money from an ATM (unless the card offers free withdrawals at participating ATM locations or a certain number of free ATM withdrawals per month); another, separate fee of $1 to $3 is taken by most ATM owners/operators.

Balance inquiry fee. This fee may be charged for getting your balance statement at an ATM.

Foreign currency conversion fee. This type of fee is charged if you use your card outside the U.S. (typical for credit and debit cards, too).

Inactivity fee. This fee may be assessed if you don’t make at least one transaction in a certain period (typically 60 or 90 days).

Card replacement/reissue fee. This fee may be charged if your card is lost or stolen.

Paper statement fee. A type of fee charged for requesting a paper statement rather than viewing your statement online.

Customer service fee. Some card issuers charge this fee when you contact a live customer service representative (as opposed to using the automated help system); some cards may even charge a small fee for using the automated phone system.

Closure fee. This type of fee is charged when you close the card.

Other Related Reviews and Resources That Might be Helpful:

Click HERE for our current ratings of the Best Prepaid Cards including the Best Overall No Fee Visa Card and see how this card compares to others.

April 20, 2020
Hispanic Consumers Propel Prepaid Card Growth
Hispanic consumers account for a growing segment of prepaid debit card users.

by Lucy Lazarony

Hispanic consumers have embraced prepaid debit cards. According to an August 2012 research study, “Consumer Payments in the U.S.: The Latino Market” by Packaged Facts:
- There are 4.6 million Latinos who used a prepaid debit card in the last 12 months.
- They make up 15 percent of all consumers using prepaid debit cards.
- Between 2011 and 2012, the number of Latinos using prepaid debit cards increased by 7.2 percent from 4.3 million to 4.6 million.
- It is projected that by 2017 the percentage of Latinos using prepaid cards will increase from 13.8 percent to 16.0 percent and the number of Latinos depending on prepaid debit cards will grow from 4.6 million to 6.3 million for cumulative growth of 35.8 percent.
The principal source of primary data for the study is the Winter 2012 Experian Simmons National Consumer Study, which was fielded between February 2011 and March 2012.

Prepaid debit cards targeting Hispanic consumers include the Univision MasterCard prepaid card and The Coopera Card, available through credit unions.

Miriam De Dios, Chief Executive Officer of Coopera, says prepaid debit cards are good payment options for Hispanic consumers for several reasons.

“A prepaid reloadable card provides safety, access to new payment methods, can serve as an alternative to check-cashing, buying money orders and using money transfers for the financially excluded and it can be a way to reduce payroll costs for small businesses,” De Dios explains. “However, this product needs to be culturally relevant to Hispanic cardholders and it needs to be a stepping stone into other financial products and services that can help consumers achieve their financial goals. Therefore, credit unions are well suited to offer this product as well as financial education, loans, etc. to help the consumer with more.”

Likes and dislikes

According to De Dios, the features of prepaid debit cards that Hispanics like most include being able to open the card without needing a credit history, being able to use the card internationally, and being able to obtain secondary cards for family abroad, and having cardholder support available and accessible in English and Spanish.

Text message alerts, convenient loading options, and low fees are also popular with Hispanic consumers, De Dios says.

Turnoffs for Hispanic prepaid debit card users include inconsistent Spanish availability of services and features and too many restrictions to open and obtain a card, De Dios explains.

Des Moines Metro Credit Union has been offering The Coopera Card since January 2012. The bilingual support (phone and website) is great for our members,” says Traci Stiles, business development manager at Des Moines Metro Credit Union. “They also like the ability to load money from their account over the phone or in person at the credit union. They like to use the card for everyday purchases and online purchases. Also, they use it to pay bills.”

Forging bonds

Many Coopera Card users have other services at the credit union as well, Stiles says. “I think most of our members who have a Coopera Card also have other services with us. We have a Credit Builder Loan that is very popular. Also, many people leave some money in their account for savings,” Stiles says.

One of the aims of The Coopera Card is to build new financial relationships with Hispanic consumers, De Dios says.

“We work with credit union issuers across the country and they are integrating this product with their overall product suite and promoting it locally through Spanish media, in an outreach capacity through financial educational opportunities and through partners. Credit unions are also including this in their toolkit as they build relationships with employers with a large number of Hispanic employees and Hispanic-owned businesses.”
November 19, 2013
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