Pre-Paid Bank Cards: What they are; Fees; and Risks

Growing industry

[… because it is a great source of income for the prepaid bank card industry. Consumer’s are being told that it is good for them too. Many of us then give it a try. My personal experience was absolutely horrendous by using the METABANK prepaid card. It is for that reason that I created this blog. I wanted to prevent from happening to others from what happened to me.]

$57 billion:  estimated amount loaded onto prepaid cards in 2011
$167 billion:  projected total loaded onto prepaid cards by 2014
42 percent: growth rate per year of prepaid market in 2010-14

Source: U.S. Consumer Financial Protection Bureau

Facts about prepaid debit cards

What is a prepaid debit card?

A prepaid debit card works like a regular debit card, but it’s not tied to a checking account.

Consumers can load money onto the card repeatedly, even using direct deposit.[By using direct deposit, you, as the consumer, are giving the issuer of the prepaid bank card full access and control of your income source.]

The card can be used wherever its network brand (Visa, MasterCard, Discover and American Express) is accepted, including for online bill pay.

 

What are the fees?

    • Fees vary by card.
    • Common fees include a purchase fee for cards bought in a store;
    • a monthly fee that is sometimes waived depending on account balances and transaction frequency;
    • and a fee for out-of-network ATM use.
    • Some card issuers charge fees for reloading the card or for calling customer service.

[METABANK, like most banks, reserve the right to change the terms of their agreement with their customer base at any time and without notice…. In the case of META BANK, they chose to lie to me and to give me the run around. Their real purpose was to keep my cash money from me when I needed it the most.  If someone or some entity lies to you, they have something to cover up.]

 

What are the risks?

      • Not all prepaid cards are FDIC-insured, meaning customers are not protected for up to $250,000 if the financial institution backing the card fails.
      • And federal laws limiting consumers’ liability when unauthorized purchases are made on their debit and credit cards do not apply to prepaid cards.

Source: Consumer Financial Protection Bureau, and private research

Advertisements
Leave a comment

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: