Prepaid Debit Card Reviews, Complaints, Etc

Tag: prepaid cards

Prepaid Cards Are Not Just For Gifts Anymore

A new report issued by Mercator Advisory Group finds that more consumers want prepaid cards for themselves, not just friends and family.

by Chris Warren

For years now, prepaid cards have been a handy fallback for the unimaginative or too busy gift giver. Don’t know what to get grandpa for his birthday? No problem. Just grab a gift card from Target or Wal-Mart and let him decide.

While there’s little doubt that gift cards will remain a popular form of prepaid cards, a recent report from Mercator Advisory Group suggests that consumer tastes are changing. For its report, “Prepaid 2013: U.S. Consumers Buying More Prepaid Cards for Own Use,” the Boston-based payment and banking industry consultancy surveyed 3,000 adult American consumers in order to gain deeper insights into changing prepaid card usage.

On the most basic level, Mercator’s results confirmed what other research has been repeatedly saying about prepaid cards: More people are getting them. In fact, Mercator found that 53 percent of adults surveyed had purchased prepaid cards during the preceding year, an increase of six percent from 2012.

While it remains true that the majority of prepaid cards purchased by survey respondents were for gifts, Mercator says that the percentage bought for a consumer’s own use is rising. This is particularly true among consumers who buy so-called “virtual cards,” which are prepaid cards delivered via text or through a mobile app. Among those surveyed by Mercator, half bought virtual cards for their own use while the other half purchased them as gifts for others.

According to Karen Augustine, manager of the CustomerMonitor Survey Series at Mercator and the report’s author, financial institutions are eager to understand just how much prepaid cards will be accepted among consumers. “As new banking regulations force many banks to raise fees on checking accounts and debit card rules continue to be challenged, many in the banking and payments industry are looking to prepaid cards to gauge their use as a preferred payment tool,” she says.

If the results of the Mercator study are any guide, expect an even bigger embrace of prepaid cards in the future. “Prepaid buyers are more likely to be younger, mobile-enabled, and buy cards for their own use. Prepaid cards are becoming more of a primary payment method and not relegated only for gifts,” she says.

November 12, 2013
Does Your Grandmother Need a Bluebird?

A well-chosen prepaid debit or checking alternative card offers freedom, flexibility and peace of mind to the elderly and their children.

by Bev O’Shea

Prepaid debit cards, once the province of the non-creditworthy and desperate, are finally becoming downright respectable (some of them anyway – you still have to be careful). Some cards now specialize; for example, allowance cards and cards for recovering addicts. So far, I haven’t seen suggestions that these should be used for elderly or disabled adults, but the idea seems workable.

Most are still aimed at what the industry calls “the unbanked.” My guess is that’s not your grandparents. But pair cognitive decline and access to a checking account or credit card, and, well, you can see the potential for disaster. You may not want to take away credit cards, but you don’t want to leave people you love vulnerable, either. The right prepaid debit card can offer a compromise.

Shop around and you can find a card that offers sub-accounts and a low (or no) monthly fee. You can both monitor and fund sub-accounts. Check and compare fees because differences can be huge.

Purchases for more than the amount in the account will not be approved, but the cardholder (say, your grandmother) could shop or buy a meal out. The account owner can opt for real-time text alerts as well. That way, if the card is stolen, unauthorized purchases can be detected right away. You can remove the indignity of constant, obvious monitoring; if monitoring is needed, it can be done discreetly.

Somehow these bring to mind my grandmother, who wisely put her own father on an allowance the same day he asked for money to buy a newspaper at the corner. He needed pocket change, his own. A prepaid debit card can work much the same way.

And, unlike a debit card (which can theoretically empty the owner’s checking account if stolen), a prepaid card can be loaded with only the amount you anticipate spending. This can also work as a budgeting tool to impose limits on spending. If self-control or good judgment falls short, the card can keep a budget on track. If the person with the subaccount needs to maintain good credit, there are other ways to do that. It’s worth noting that prepaid cards do not build credit.

One candidate for protecting loved ones would be the checking alternative, American Express Bluebird card, which is not technically a prepaid debit card but shares many of the same features. I’m using it now to help a teen learn about budgeting. Once I began using it, I realized that this has the potential to both protect older adults from spending recklessly while also freeing them to use plastic.

You can buy a kit at Wal-Mart for $5 if you want to load it and use it right away. If you apply online, signup is free. The card can be used anywhere American Express is accepted.

And no, they didn’t pay me. I just happen to love some people who might need a little protection now and then.

October 16, 2013
A True Wall Street Occupation?

How the Occupy Card Doesn’t Live up to its Promise

by Shane Tripcony

The terms and conditions of credit, debit and prepaid cards are not what anyone would call scintillating reading. Layered with legalese and hard to decipher jargon, these documents have traditionally (and understandably) been ignored by consumers. Which is too bad because they contain the sort of vital information people need to make smart financial decisions.

By contrast, the recently announced fee structure for the Occupy Card is a legitimately fascinating read. The Occupy Card is a prepaid debit card that an offshoot of the Occupy Wall Street Movement is hoping to soon introduce to the marketplace, the first of what the so-called Occupy Money Cooperative would like to be an array of financial products and services. And while the proposed fees are not the fully-fledged terms one would wade through with an already available prepaid card, there’s one section you probably won’t find with many other cards: how to avoid the fees. (To be fair, Account Now generously offers tips to save money on their fees page as well, so kudos to Account Now, as well.)

For instance, the issuers of the Occupy Card dutifully note that it will cost users $1.95 to take money out of an ATM, the result of network and other third party charges (ie. not Occupy’s fault). But to dodge that fee, the Occupy Money Cooperative urges people to get cash back while shopping. It goes on and on like this, with the designers of the Occupy Card offering tips on how to get around fees whenever possible.

Arguably, in a financial services industry that many believe seeks out revenue generating fees the way a shark hones in on blood, the mere existence of a card-provider tip sheet about avoiding them is incredible. Of course, it’s not a huge surprise, given the Occupy Movement’s loathing of the way it believes Wall Street mistreats its customers and harms society.

Now, don’t expect other issuers of prepaid debit cards to suddenly follow Occupy’s lead and highlight ways to sidestep their fees. (It sure would be nice, though!) But the sad truth is that they won’t need to because the non-profit, stick-it-to-the-man Occupy Card is far less consumer-friendly than many of the prepaid cards offered by the big banks. That’s right, the greedy capitalists from Wall Street have many, many prepaid debit cards that would cost consumers far less than the offering from the former residents of Zuccotti Park.

While the Occupy Card has a low monthly account fee of $0.99, the $1.95 charge to take money out of an ATM is painful for anyone – no matter whether it’s the fault of Occupy or not. Also costly are fees for getting basic account information. The Occupy Card charges $2 to speak with a customer service representative and $0.99 to get automated help. As with most consumer-friendly prepaid debit cards, there’s no charge to load the Occupy Card using direct deposit. But any other method to load the card will set people back as much as $5 per transaction. That’s not exactly the kind of help the 99% need.

It’s also not going to help the Occupy Card gain much traction in the marketplace. Based on our calculations, the average annual fees for the Occupy Card would cost the average consumer $259.40 per year. Truth be told, that lands the Occupy Card squarely in the middle of the pack. There are alternatives, such as Bluebird by American Express, which cost the consumer nothing, based on our standard formula. There are quite a few other cards that average out with lower fees as well. Cards from banking behemoths like Chase and U.S. Bank and American Express offer free ATM withdrawals and cash loads and are, overall, a far better deal for consumers. Even with the fee differences, the Occupy Card does send a message, and many consumers may find the importance of sending that message to be worth those higher fees. Bottom line, here’s the question for everybody: Are you up for occupying the Occupy Card?

October 14, 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
Prepaid Debit Card Scams Proliferate

Prepaid debit cards are becoming an increasingly popular tool for criminals.

By Shane Tripcony

Over the summer utility customers from Virginia to Pennsylvania to California have been targeted in a scam that closely resembles one that was reported on recently by The Beach Reporter in Manhattan Beach, California. In an article titled, “Edison warns its customers of utility bill scam,” the paper told its readers that Southern California Edison customers have been receiving phone calls from people claiming to be from the utility demanding payment for past-due electricity bills.

The paper reports that the callers threaten Edison customers with having their electricity cut off if they don’t make an immediate payment using a prepaid debit card. As of September, Edison says that about 150 businesses and residents had been victimized at an average cost between $800 and $1000.

While popular, the utility scam is not the only type that relies on the use of prepaid debit cards. According to a story in the Arizona Republic, two citizens of Surprise, Arizona were indicted in a $2.5 million income-tax scheme involving prepaid debit cards. According to the charges brought by the U.S. Department of Justice, the alleged perpetrators told victims that they could receive “Obama stimulus money” or “government funding” via a prepaid debit card. In return for that promised government money, victims handed over personal information that was used by the alleged criminals to file false federal income-tax returns. In total, the 18-count indictment by the federal government says that the perpetrators received over $2.5 million in refunds.

A similar scheme also resulted in prison time for a Cincinnati man. According to a report on Cincinnati.com, Dione Howard was sentenced to 12 months and one day in prison and ordered to pay $30,129 to the Internal Revenue Service for his involvement in a crime involving prepaid debit cards. Citing court documents, the report says that Howard purchased 18 names, social security numbers and dates of birth and used them to file false income-tax forms. Howard received a total of $30,129 in fraudulent refunds.

“This unscrupulous defendant thought he had figured out a clever scheme to thwart the IRS and steal from the American taxpayers,” the story quoted Kathy Enstrom, special agent in charge, IRS Criminal Investigation in the Cincinnati Field Office as saying. “The IRS has made investigating refund fraud and identity theft a top priority and we will vigorously pursue those who undermine the integrity of the U.S. tax system.”

September 16, 2013