Prepaid cards may not help budgeting
Consumers looking to avoid costly bank fees with over-the-counter prepaid cards, may find these could do more harm to their budgeting than they realize.
“Some of them are really nickel-and-diming you worse than the banks,” Gail Hillebrand, a senior attorney at Consumers Union told MSNBC, “[The fees] aren’t all listed on the packaging. And they vary quite widely from card to card.”
Some cards may charge an additional dollar per purchase, while others may tack on $1.50 for PIN number transactions, and $1.99 for receiving cash-back, according to a study by MSNBC.
The study found some of the cards had activations fees as high as $20, monthly fees topping $10 and ATM withdrawal surcharges of $2.50. Over time, this money could add up to large amounts. The prepaid cards also offered less protection for lost or stolen cards than debit or credit options, reports the news provider.
Network Branded Prepaid Card Association reports that $18.3 billion was loaded onto prepaid cards in 2009. The figure is on pace to top $30 billion in 2010.