A prepaid debit card is not the same as a credit card. With a prepaid debit card, you buy a card with money on it or you deposit money on the card. Prepaid debit cards can be "reloaded", which means that if the balance is used up, you can choose to add more money to the card.
Watch. Prepaid debit cards can carry high fees. Some consumers say they were not adequately warned about those fees. Consumers were often charged an activation fee that was taken off the value of the card, without the consumer's knowledge of the fee.
Often, prepaid debit card users are low-income earners, or immigrants, who can not open a typical bank account or get approved for a credit card. Prepaid debit card companies target these groups of people.
The industry often says they operate with small profit margins. The criticism is often that they have many small charges which add up costing more than the consumer realizes. This has usually meant that prepaid cards are more expensive way to bank.
"Green Dot" is a big provider of prepaid debit cards. It states that consumers "can count on us to be there for you". Customers have complained of poor customer service and that there were hidden fees.
As listed on the Green Dot website fee schedule:
Initial Purchase: Varies, from $4.95 to $6.95, depending on where it is purchased.
Monthly Charge: Waived when you load at least $1,000 to your card or make 30 purchase transactions, otherwise, it is $5.95 per month.
ATM Withdrawal: free at participating ATM's only, otherwise it's $2.50 per withdrawal.
Teller Cash Advance: $2.50
ATM Declined Withdrawal: $0.50
ATM Balance Inquiry: $0.50
Lost/Stolen Card Replacement: $6.00
Other Prepaid Debit Card Companies
According to The New York Times (October 6, 2009), consumers who used cards by other companies also felt they were not adequately warned about the fees.
Other large providers of prepaid cards:
MiCash Prepaid MasterCard
Millennium Advantage Prepaid MasterCard
Silver Prepaid MasterCard
Only 1 Visa prepaid card
Wal-Mart Money Card
Vision Premier Prepaid Visa Card
Congress has asked federal regulators to investigate pre-paid cards. To date, this industry, which is a newcomer to the personal finance provider field, has not had regulatory oversight that would give added protection to customers.
If you would like more information, feel free to contact me.
David E. Schreiber
Of Counsel
Law Offices of Thomas Wolpert, PC
610-792-3304
Injured? We work for your case. 610-792-3304
www.PAinjurycase.com
About Me
- David Schreiber
- I have been practicing law since 1994. From 1994-1998, I was a State's Attorney with the "Governor's Law Firm", called the Office of General Counsel. I represented the Commonwealth of Pennsylvania in Civil Actions, including winning cases on appeal before the Commonwealth Court. In 1998, I joined a local firm. I became a shareholder. I am now a Partner at Wolpert Schreiber P.C., focusing on injury law and insurance disputes. I am one of the few lawyers handling injury cases who has worked exclusively both as a lawyer for injured people and in house for a large law group defending those claims when I was with the "Governor's Law Firm". My work also includes Insurance Disputes and Contracts. I have successfully handled hundreds and hundreds of cases, including cases to jury verdict, in State and Federal Court. I am honored to help people who come to us to solve their problems. Our goal is to seek truth and accountability, while working as hard as possible for our clients. I have obtained millions of dollars in recoveries for clients over the years. We work for your case.