A recent post from the Charlotte Observer highlights consumers are increasingly turning away from credit cards and bank accounts and moving to prepaid cards for their convenience of use, and that prepaid cards do not require credit checks. In 2008, consumers loaded $8.7 billion in prepaid cards, as opposed to $4 billion from the previous year. There is no doubt that the prepaid industry has grown significantly over the past couple of years.
College students make up a big percentage of prepaid card users. Industry experts only see this increasing even more since a new credit card law that will make it difficult for anyone under 21 to obtain a credit card without an adult co-signer will take effect in February. Congress is even taking a page from prepaid card's book by trying to pass legislation that would force banks to ask permission before overdrawing from their bank accounts.
Prepaid cards have recently come under federal scrutiny and many are arguing for more regulation in the prepaid industry. Do you agree that more regulation on prepaid cards will reduce fees?
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1 comment:
Currently, prepaid card fees vary greatly. As prepaid cards become mainstream we will continue to see increased governmental scrutiny and regulatory control. We will also see consolidation in the industry and major prepaid initiatives by the major banks and the associations. This will lead to more consistency in prices across the industry. Prices will ultimately level out at the mid range and continue to fall as prepaid becomes more of a commodity and embraced as a core offering of the major banks.
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