Prepaid Debit Card Reviews, Complaints, Etc

Tag: prepaid debit card fees

  • What is A Prepaid Debit Card? Glossary & Common Terms

    What is A Prepaid Debit Card? Glossary & Common Terms

    Welcome to our site! Our editors have been covering the credit and debit card space for a total of 30+ years and we are proud to have been featured by the Wall Street Journal, CNN, etc. Your input is invaluable and we’d love to have your comments on What is a Prepaid Debit Card? (see below) – this site is powered by you!

    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.

  • Prepaid Debit Card Fees Lower Than Checking Account Charges

    Prepaid Debit Card Fees Lower Than Checking Account Charges

    A recent report by Bretton Woods, Inc. shows that most consumers using prepaid debit cards to manage finances do so for less than $7.50 per month.

    by Chris Warren

    It has long been an assumption that users of prepaid debit cards turn to them as something of a last resort. But a recent report entitled, “Analysis of General Purpose Reloadable Cards,” found that the majority of consumers using prepaid debit cards are actually faring better when it comes to fees than if they were utilizing more traditional checking accounts. In fact, the report produced by Bretton Woods, Inc. reveals that the majority of people using prepaid debit cards to manage their finances were able to do so for monthly fees totaling less than $7.50, a cost advantage over basic checking accounts.

    The report, which used data gathered from prepaid debit card issuers and program managers, underscores two trends driving the explosive growth of prepaid cards. An important force behind lower prepaid debit card fees is increased industry competition. As large financial services companies like Chase and American Express have introduced products with low fees, competitors have had to follow suit. At the same time, fees associated with checking accounts have been on the rise.

    “The three-year trend shows that the costs of basic checking accounts are increasing while the costs to use general purpose reloadable cards, also known as prepaid debit cards, are decreasing. The 2013 analysis is able to pinpoint with more accuracy what it costs the majority of consumers to use their cards and revealed the high fees incurred by consumers are from outlier cards only and are completely avoidable,” says the report’s author, Michael Flores, who is president of Bretton Woods, Inc.

    The report found that consumers using basic checking accounts pay between $263 and $473 each year in fees. By contrast, those who utilize reloadable prepaid cards with direct deposit pay between $58 and $263.95 each year. Prepaid debit card owners who don’t take advantage of direct deposit, which is typically a free way to load accounts with money, spend between $58 and $333.75 annually. Additionally, the report says that direct deposit checking accounts cost on average more than twice that of prepaid debit cards with direct deposit.

    Another finding of the study underlines the growing popularity of prepaid debit cards with banks. Indeed, almost 60 percent of all banks now offer them. Given the embrace of prepaid debit cards by younger consumers, it’s likely that even more banks will begin offering their own cards. “The trends are unmistakable. General purpose reloadable prepaid cards are serving the needs of Gen Y and the underbanked, and also gaining a foothold with traditionally banked customers,” says Kirsten Trusko, President and Executive Director of the Network Branded Prepaid Card Association.

  • Nine Tips for Avoiding Fees on Prepaid Cards

    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.”

     

  • Celebrity Prepaid Debit Card Smackdown 2013

    Celebrity Prepaid Debit Card Smackdown 2013

    Nobody would argue that hip-hop impresario Russell Simmons is anything but cool. After all, the guy was one of the forces behind Def Jam, the record label that brought us the Beastie Boys and LL Cool J. These days, Simmons is a business magnate whose net worth is estimated to be north of $300 million. And Simmons is looking to add to that sizable fortune by lending his name to a celebrity prepaid debit card called the RushCard. In doing so, Simmons joins personal finance guru Suze Orman and the increasingly notorious singer Justin Bieber in endorsing and promoting celebrity prepaid cards.

    An examination of the fees associated with these three celebrity prepaid cards by BestPrepaidDebitCards.com reveals that it can be a pricey proposition to use star-powered plastic, albeit not always more expensive than average prepaid debit card fees. For instance, while Orman and Bieber charge $3.00 and $3.95, respectively, in standard monthly fees, the tab for Simmons’ celebrity prepaid card is $9.95 – an amount that is more than $5.00 higher than the average monthly fee. To be fair, there are other Rush card offerings with lower monthly fees and may be found in free monthly fees for the Pay As You Go Plan to $5.95 or $7.95 on the Rush Unlimited Plan depending on your direct deposit status.

    In other areas, the fees charged on the celeb-backed cards are comparable, including similar charges for ATM transactions or for putting money into the account (known as loading fees). Consumers should note, however, that although an issuer may not charge a fee to load cash on their card, they may have to utilize third party services which do charge, such as Green Dot MoneyPak or MoneyGram, and fees can range from $3.74 to $4.95.

    An alternative product is Bluebird by American Express, which does not offer star-power, but it does offer great features and very low fees. Still, there’s no getting around the fact that there’s a premium to be paid for associating yourself with a celebrity card. In a hypothetical tally of fees from a month of modest usage of our sample RushCard plan, BestPrepaidDebitCards.com calculated that it would cost a cardholder around $12 per month. Is using a celebrity prepaid card really that cool?

    For More Information:

    For prepaid card and personal finance news, reviews, commentary and more – check out the Prepaid Debit Cards main page.

    For the latest unbiased ratings and reviews – check out our Prepaid Debit Cards reviews.

    An Alternative to Traditional Checking Accounts: Bluebird by American Express

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    Celebrity Prepaid Debit Cards Infographic 2013

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  • Approved Card From Suze Orman

    Approved Card From Suze Orman

    If you find yourself among the unbanked or under-banked a prepaid debit card may be the checking account alternative you are looking for. Suze Orman has recently launched her Approved Card – a prepaid debit card that is supposed to be better than the competition. But is it really? Does it have low or no fees?

    Suze Orman says about the Approved Card, “It's the single most important thing I've done in my whole career.”

    She says it's a better way to bank.

    It is safer than cash, comes with no credit checks, no check cashing fees, no bank account required, no overdraft fees, no interest charges and it is easy to load and use.

    The Appoved Card (http://www.theapprovedcard.com) also comes with free identity theft protection, free Transunion credit reports, credit scores and credit monitoring. These features are not seen on many of the best prepaid debit cards. You can expect to see services like this included because Suze Orman is a big proponent of keeping an eye on your credit report and score.

    So let's talk about getting this prepaid debit card's fees. You will have to pay $3 to purchase it. This fee is lower than most other prepaid debit cards. And then you have a $3 monthly account maintenance fee with the first month waived. Compare this to other cards which can run from no cost per month all the way to $9.95 a month.

    You can get free ATM withdrawals at over 35,000 Allpoint locations for the following 30 days you make a Direct Deposit of $20 or more. You can find these ATMs at places like 7-Eleven, CVS, Costco, Kroger, Target and Walgreens. Otherwise you will have to pay a $2.00 fee.

    You also get free online bill pay and a free additional card along with no activation fee.

    You do not have to pay a fee to purchase with a signature or PIN transaction.

    You also get one free live customer service agent call per month and $2.00 per call after that.

    If you like to receive a paper statement that will cost you $2.00 per statement.

    When you check out the fee chart you will see that most of the fees can be waived for a 30 day period after you Direct Deposit $20 or more.

    So who is the Approved Card by Suze Orman for? People who do not want to use a secured credit card, people who cannot get approved for a checking account due to bad credit, and people who will deposit less than $1,000 each month through Direct Deposit.

    It's not the best prepaid debit card but it is also not the worst prepaid debit card.

    For more from this author visit:  Tameka Riley's Author Page

Prepaid Debit Card Reviews, Complaints, Etc