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Prepaid debit cards costing consumers more

[Tuesday, November 9th, 2010]

The Consumers Union recently revealed that the use of prepaid cards is making consumers face more fees and other expenses. This report was based on the union`s analysis of 19 dissimilar prepaid cards.

According to the Consumers Union consumers are made to pay multiple fees by prepaid cards which include an activation fee. Just to have their prepaid cards be activated consumers need to provide an amount ranging from $3 to as high as $ 39.95 dollars. Also there is the monthly fee; this can cost consumers some $ 2.95 up to $ 9.95. According to the Consumer Union`s review this fee can be waived as most cases revealed once the consumer set up some automatic direct type of deposit. Another fee that consumers pay when they use prepaid credit cards is the ones associated with withdrawal. When consumers take money out of their cards they are usually charged with one dollar or $2.50. Some prepaid card issuers also charge consumers when they call the customer service. There are providers who have this service for free however for some this costs a dollar to $3.95. Inquiring about the remaining money left in the prepaid card also is charged with a dollar and less. Unused prepaid credit cards are also charged with some dollars. If 90 days passed from the time the consumer activated his/her card some card providers will charge the card to as high as $9.95.

These are just some of the fees consumers pay when they opt to use prepaid cards. The Network Branded Prepaid Card Association reported that this year it is estimated that $36 billion will be loaded to prepaid cards. This figure is significantly higher than $18.3 billion which was loaded in 2009. According to Network Branded Prepaid Association the figure estimated this year is expected to be doubled for the 2011.

More and more people are reported to be using prepaid cards due to several reasons. One of the major reasons is the fact that availing prepaid cards do not require credit check. Also prepaid car use also has no set minimum balance requirement. Consumers also need no bank account to get the service of prepaid credit cards. Moreover prepaid cards can be used anywhere so long as the store is accepting transactions for the major credit cards. These are the primary edges of the prepaid card use that are leading more consumers to rely on them however people must also consider how much does prepaid use really cost them.

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