Avoiding debt from prepaid cards may be easier
As many Americans continue to struggle with credit card debt and other economic troubles, more consumers are turning to alternative forms of payment, such as cash, checks and prepaid cards.
On January 31, consumers looking to find out which prepaid card will be most affordable will likely be easier for consumers due to a new disclosure law.
The new regulations, passed over the summer by Congress, now mandate that credit card companies, restaurants and retailers provide notice of expiration dates, fee restrictions and other details about their prepaid cards and gift certificates, The Las Vegas Business Journal reports. In addition, the legislation now requires these cards to be honored for up to five years from the time of purchase.
While the companies are not required to dispose of outdated cards, the new laws require that consumers are informed of their costs with alternative sources, such as an in-store sign, the report said.
Proponents of the new regulations say this could help consumers make more informed decisions and avoid incurring high fees without their knowledge.