While many are discussing the benefits of Prepaid Cards, this article plays devil's advocates and questions the usefulness of this latest in from the Credit Card Industry. Many tout the main benefit being to the underbanked, college students, and for those who wish to have a secure way to avoid racking up debt. As this author points out, however,
It's just like a regular debit card, except that it isn't hooked up to a checking account. You have to transfer money to it from a bank account, and there are hefty fees for activating the card, withdrawing money from ATMs and, get this, not using the card regularly. Fraud protection tends to be limited and, unlike a credit card, you can't establish a credit history to help qualify for better rates on student loans or a mortgage.
What are your thoughts? Do you see the prepaid card industry as a benefit to consumers, or not and why?
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