Bankrate.com took an updated look at the prepaid debit card landscape, surveying 24 prepaid cards from prominent issuers.
Like last year, the cards surveyed showed a variation in the fees charged, with some cards charging more fees or higher fees, but all of those 24 cards involving a fee of some kind.
What's new this year is that some large national and regional banks are recent entrants to the prepaid card market, many of these offering cards with a low, fixed monthly cost. The ability to know the total monthly cost going in offers value to consumers, particularly with the decline in free checking accounts.
With all of the cards in the survey, the funds you've deposited onto the card are federally insured. But its where the fees come in that you have to pay attention because in most cases the fee is avoidable.
Take for example the monthly service fee. Two-thirds of the cards either have no monthly fee or will waive it completely based on the amount loaded onto the card. Same goes with activation fees, where if purchased online, two-thirds of the cards don't charge to activate the card.
How about getting cash from the ATM? Just as with a checking account, if you go outside the network you can expect to pay a fee. But even for those affiliated with an ATM network, two-thirds of the cards charge a fee ranging from $1.50 to $2.75, and just over half of the cards will charge a fee to check the balance at an ATM, regardless of the ATM used.
Only a small portion of the cards surveyed charge a fee for using the card at a point-of-sale, to call customer service or when a transaction is declined due to an insufficient balance.
Consumers with a tendency to overdraw their checking accounts or those unable to obtain checking accounts may find a prepaid card to be a suitable alternative, but it's important to shop around to find the card that will produce the lowest fees for the cardholder's particular financial tendencies. To see the breakout of fees for each card, so you can assess the best card for your circumstances, see the 2013 Prepaid Debit Card Survey at Bankrate.com.