Prepaid cards levy a variety of fees
As more consumers consider alternatives to traditional checking accounts, prepaid debit cards have been soaring in popularity.
Data from The Pew Charitable Trusts, a Washington D.C.-based public policy advocacy group, show that prepaid cardholders are putting more money on their cards each year, loading more than $64 billion on those pieces of plastic in 2012, more than double the amount in 2009. With more cards coming on the market, that trend is likely to continue.
The bad news? Cardholders may not get to spend all their money. Instead, many of them must hand over some of their funds as a result of a wide range of fees. If you are thinking of using a prepaid card for your spending needs, it's important to remember that all prepaid cards are not created equal, says Greg McBride, CFA, chief financial analyst for Bankrate.com.
"You have to shop around," McBride says. "There is tremendous variation in what fees are charged among prepaid cards."
However, consumers are failing to do the research. A 2014 Pew survey revealed that only 32 percent of consumers compare terms before choosing a prepaid card.
It's easy to avoid some of those add-on costs. Here are three prepaid fees you should never pay.
Review checking account rates at Bankrate.com to find the best account for you.