Prepaid, but not prepared for debit card fees
The costs decrease
Industry officials say the fees have come down, especially after Wal-Mart this year cut fees on the prepaid no credit check it sells, prompting several other issuers to cut prices as well. They add that consumer complaints are rare and that surveys indicate that the vast majority of customers appreciate the cards.
An industry-sponsored study by Bretton Woods, a banking consultancy firm, said cards like Green Dot, Wal-Mart and NetSpend are cheaper than a checking account, which can cost as much as $ 353 annually, in assuming six overdraft fees, compared to $ 207 for a prepaid direct deposit card.
Yet in many cases, even the cheapest prepaid cards can cost more if consumers are able to avoid bank overdraft fees. It should be easier after several major banks recently announced that they will let their customers refuse overdraft protection.
While most major banks charge $ 10 or less per month for a low-balance checking account, a survey of two dozen prepaid cards released in August by Consumers Union, the publisher of Consumer Reports, found the cheapest , the Wal-Mart Money Card, costs $ 16.59 the first month and $ 21.54 the second.
In contrast, the more expensive card, the Millennium Advantage Card, cost $ 115.05 in the first month, due to a $ 99 application fee, and $ 27.95 in the second month, the survey showed, compiled. by Michelle Jun, lawyer for Consumers Union.
And the fees charged can be confusing. A spokesperson for the Millennium Advantage card said that although it lists the fee of $ 99, the company only charges $ 30. A spokesperson for the Silver Card said it doesn’t actually charge the $ 25 shortage fee shown in its fine print and is working to remove it from company documents.
“How are consumers supposed to keep costs down if businesses can’t?” said Michael McCauley, a spokesperson for the Union des consommateurs.