10 Advantages of Pre-Paid Cards

Prepaid cards have come a long way in just the last six years. Today’s cards offer reliable consumer protection and charge little or no fees. They are available at modest cost in most supermarkets and many other retailers. Once pre-loaded they can be immediately used.

10 Advantages

1) Prepaid cards are now accepted everywhere:

---12 million retailers in the US accept cards with the Visa or Master-Card logo.

---3.4 million retailers take American Express prepaid cards.

---24,000 MoneyPass ATM’s accept Green Dot and Bluebird cards.

---15,500 Chase ATM’s accept Liquid brand cards.

2) Prepaid cards helps you stick to your budget. Separate cards can be purchased for different expenses, such as groceries, back to school, gifts, etc.

3) Spending is easily monitored with the card’s mobile app or your account on their web site.

4) It is difficult to impulsively spend your way into debt when your card won’t give you any credit. With most cards you can’t spend past the amount loaded in. If you do, most of the top cards will not charge an overdraft fee, provided the amount is modest.

5) Parents are falling in love with these cards. Many are giving their teens or off-to-college kids prepaid cards so they can’t spend a fortune.

6) When someone loses their card or it is stolen, damage is minimized because the card is not attached to any personal bank account.

7) Many seniors are vulnerable to credit card scams. Prepaid cards offer the seniors the freedom to spend their own money while another family member is monitoring their purchases online. Some of the better cards give options like limits on single purchases, prevent internet purchases, or block all transactions from any merchant outside the US. The True Link Prepaid Visa has a $10 monthly fee and contains several such features to protect seniors from fraud.

8) Many prepaid cards allow the consumer to add more money to the card for free by direct deposit and give access to thousands fee-free ATMs across the country.

9) Ditch those exclusive store gift cards. Special occasion gifting is much smarter with a prepaid card because they can be used anywhere any regular credit card is accepted. In other words, millions of possible retailers instead of one chain.

10) According to the Federal Deposit Insurance Corporation, 1 in 13 American households are “unbanked”. This represents almost 10 million households. (See link below) Consumers without a bank account can have their government checks and work paychecks directly loaded onto the card for better access and security.

3 Mini-Disadvantages

---No interest can be earned on the money in your prepaid card, even if the amount is large.

---A good credit history cannot be accrued.

---Most car rental companies and hotels will not accept prepaid cards as security.

Final Advice from Consumer’s Reports:

“New regulations expected later this year from the Consumer Financial Protection Bureau are likely to extend consumer protections to all prepaid cards. But until those rules are in place, stick with the top-rated cards on our list. They all provide FDIC (Federal Deposit Insurance Corporation) insurance and don’t hold customers liable for errors such as inaccurate debit entries and unauthorized charges due to fraud.”

Consumer’s Reports Top 5 Recommended Prepaid Cards (used in addition to a bank account)

1) Bluebird (American Express and Walmart)

2) Chase Liquid (Visa)

3) Green Dot Prepaid Visa (issued by Green Dot Bank)

4) Halogen Reloadable Prepaid Card (MasterCard, Kmart, issued by Green Dot Bank)

5) American Express Serve

http://www.consumerreports.org/content/dam/cro/news_articles/money/CR-Money-Inline-Prepaid-Ratings-Checking-Adjunct-04-16.png

Consumer’s Reports Top 5 Recommended Prepaid Cards (used as a bank account substitute)

1) Chase Liquid (Visa)

2) Green Dot Prepaid Visa (issued by Green Dot Bank)

3) Halogen Reloadable Prepaid Card (MasterCard, Kmart, issued by Green Dot Bank)

4) Bluebird (American Express and Walmart)

5) American Express Serve

http://www.consumerreports.org/content/dam/cro/news_articles/money/CR-Money-Inline-Prepaid-Ratings-Checking-Substitute-04-16.png

Prepaid Cards Are a Smart Way to Pay With Plastic http://www.consumerreports.org/prepaid-cards/prepaid-cards-smart-way-to-pay-with-plastic/

Six page prepaid card comparison http://www.cardhub.com/prepaid-cards/#picking-a-card

2013 FDIC National Survey of Unbanked and Underbanked US Households https://www.fdic.gov/householdsurvey/

Prepaid cards in Canada http://www.fcac-acfc.gc.ca/eng/resources/publications/paymentOptions/Pages/PrepaidC-Lescarte.aspx

Photo: http://d187qskirji7ti.cloudfront.net/news/wp-content/uploads/2012/01/photo-5.jpg

Jerry De Luca is a Christian freelance writer who loves perusing dozens of interesting and informative publications. When he finds any useful info he summarizes it, taking the main points, and creates a (hopefully) helpful blog post.