The Salt Lake Tribune reports that Prepaid card usage is up among Americans. Consumers typically buy them from a retailer, load them with money -- sometimes from directly deposited paychecks -- and use them at checkout counters or to pay bills online. And the cards are advertised with a phrase rarely used by financial institutions since the beginning of the credit crisis: no credit check necessary.
In 2008 consumers loaded $8.7 billion, up from about $4 billion the year before, on prepaid cards that carry Visa, MasterCard, American Express and Discover logos and can be used anywhere, according to Mercator Advisory Group, a research firm that focuses on the payments industry.
Consumer advocates warn that the cards can carry an assortment of fees. Nevertheless, prepaid cards have become popular among those who cannot get traditional bank accounts, many of them immigrants who rely heavily on more expensive check-cashing institutions.
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