nearly 10 million U.S. households "unbanked"
— meaning they have no checking or savings accounts
— prepaid cards have become a relatively safe
alternative to help consumers manage their money. The
amount of money loaded onto prepaid cards grew from less
than $1 billion in 2003 to nearly $65 billion in 2012,
the U.S. Consumer Financial Protection Bureau has
their attractive features, some cards come with high and
unexpected fees. The bureau is expected soon to finalize
a rule ensuring that prepaid card users have
error-correction and dispute-resolution rights
comparable to protections given to consumers who have
a report issued last month, Consumer Reports reviewed 20
prepaid cards on four different factors: how much they
cost to use; the availability of in-network ATMs and how
widely the card network brand is accepted; whether funds
are protected by the Federal Deposit Insurance Corp.;
and how well fees are disclosed.
the best prepaid cards have fewer fees and make it easy
to avoid them; are insured by the FDIC; offer features
comparable to traditional checking accounts; and do a
better job of disclosing fees.
prepaid card landscape that used to be characterized by
high fees has improved dramatically as more low-fee,
consumer friendly options have come to market,"
said Greg McBride, chief financial analyst for
Bankrate.com. "The high-fee cards of years past
have been marginalized by lower-fee cards that have very
of the most competitive prepaid cards are offered by
national and regional banks, with more transparent fee
structures and free access to cash via banks’ ATMs and
branches, McBride said.
traditional debit and credit cards, prepaid cards don’t
enjoy the same legal protections that limit the
financial liability consumers face in the event of fraud
or merchant mistakes, although most card issuers provide
these safeguards voluntarily, Consumer Reports said.
top five cards to be used as a substitute for a bank
account, as reviewed by Consumer Reports, were:
Express-Walmart Bluebird card.
Dot Prepaid Visa.
Reloadable Prepaid MasterCard.
cards that were reviewed that received the lowest
Prepaid Visa Card.
Prepaid Visa, Premier FeeAdvantage Plan.
MasterCard Prepaid Card.
Gold Visa Prepaid Card.
Prepaid Visa, Pay-as-you-go-plan.