Since you can pay for most anything with a card these days, the idea of prepaid cards has become popular with consumers trying to manage a budget, those who can't get credit and even as an alternative to banks.
But in a survey released today by the state Office of Consumer Affairs and Business Regulation, the agency found a host of fees and other charges that might not immediately be apparent to users.
"Our office understands the emergence of prepaid cards as alternative banking products, but consumers should not be charged just to access their own money," said Barbara Anthony, who heads Consumer Affairs.
She noted that Massachusetts banks offer basic checking accounts that are guaranteed to have limited fees. You can find out more about them here.
"Community banks and credit unions offer many low or no cost options to meet consumer banking needs," state Banks Commissioner David Cotney said. "Consumers who choose to use a prepaid card should review the product disclosures before purchasing it since there may be a wide range of fees associated with using the card."
Consumer Affairs looked at 16 different fees associated with the purchase and use of 11 different prepaid cards. What they found was a confusing array of fees could sometimes be avoided by incurring other fees.
Here are some of the findings of the survey:
- All but two charged monthly fees (as much as $9.95), fees to make a withdrawal at an ATM (up to $2.50) and fees to check the card's balance (up to $1.50).
- One card, the Wire Plastic Visa Prepaid Card, had 14 fees.
- Six of the 11 cards assessed a fee for each transaction.
Other fees include using the PIN (up to $2), replacing the card ($10) and even one for not using the card ($5.95 after 90 days).
A link to the full survey is in the Consumer Affairs news release.
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About the author
Mitch Lipka is one of America's leading consumer journalists and advocates. He is an expert in product safety, recalls, scams, and helping consumers get out of jams. He is a nationally known consumer columnist and runs TheConsumerChronicle.com. He lives in Worcester. You can find him on Facebook or reach him at ConsumerNews@Aol.com