U.S. consumers loaded more than $64 billion onto general-purpose reloadable prepaid cards in 2012, up from $56.8 billion in 2011, according to the Mercator Advisory Group.
But a Pew Charitable Trusts report released in February titled “Consumers Continue to Load Up on Prepaid Cards” says the cards’ increased use is good for people seeking an alternative to traditional checking accounts or credit accounts.
Pew says more cards are charging monthly prepaid card fees but not charging transaction-based fees, such as point-of-sale or customer service fees.
But while many prepaid cards have become more affordable, no federal laws or regulations exist that protect consumers from hidden fees. Companies that back the cards don’t have to disclose fees, terms, conditions or dispute-resolution practices.
Savvy consumers can avoid, decrease or control many prepaid card fees by being diligent when choosing a prepaid debit card and by using the following tips.
Find the best credit card rates at Bankrate.com.