Concerns are rising about the potential dangers of prepaid cards by individuals. A recent report by Jun,“Prepaid Cards: Second-Tier Bank Account Substitutes,” faults the cards for poorly disclosed, high, and widely varying fees, arguing the total monthly cost for usage should be capped. Among 18 reloadable cards examined, the report found activation fees ranging from $3 to $99.95; monthly fees from $2.95 to $10; and dormancy fees (levied by eight of the 18) from $1.95 to $9.95 per month. These and other fees, it says, should be laid out on card carriers in a standardized fashion not unlike the so-called Schumer boxes used by credit card issuers. The report further argues that charges for overdrafts should be eliminated. The report found 10 cards charging overdraft fees ranging from $24.90 to $29.
Should prepaid companies work with consumer advocacy groups to enhance the benefits of prepaid cards?
As Reloadable Cards Increase, Concerns Grow About Fees, Protection
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