Hidden Dangers of Prepaid Cards
Prepaid cards are reloadable cards which have become popular among consumers with poor credit or no bank account. These cards may carry a network logo such as Visa or Mastercard and often have the word "debit" printed on the front. However they don't offer the same protection that a regular debit card provides. They also have lots of fees tacked on as listed below.
Sample charges
Sample charges
- Activation fees can range from $3 to $99.95.
- Monthly fees can range from $2.95 to $9.95.
- ATM fees can range from $1.50 to $2.50 per ATM withdrawal.
- Balance inquiry and statement fees can range from .50 to $1. The ATM owner may charge an additional fee.
- Customer service fees can vary. One card issuer charges $1 per minute while another charges a flat $3 per call.
- Overdraft fees are comparable to normal bank fees ranging from $24.90 to $29.
- Some card issuers even charge a fee for inactivity if the card is not used within a certain period of time. These can range from $1.95 to $9.95 per month.
Needless to say these fees can add up making a prepaid card pretty expensive. To add insult to injury these card issuers are not legally required to offer protection against theft or loss. They also may not be insured by the Federal Deposit Insurance Corporation (FDIC).
Check the source link to read the full report on ConsumersUnion.org. Source
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