This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

5 Ways to Know a Prepaid Card Is a Good Deal

NEW YORK (TheStreet) -- Prepaid credit cards are on a roll these days as consumers looking to regain a financial foothold, stick to a budget and gain some everyday financial flexibility are turning to them in record numbers.

According to the Pew Charitable Trusts, prepaid cards are expected to account for $200 billion consumer assets, up a whopping 600% from 2009.

It's no accident that the rise in prepaid cards comes at a time when the economy is weak and consumers are fighting to stay afloat. As Pew notes, most consumers use prepaid cards to help meet a household budget when they can't get access to traditional credit cards.

But prepaid cards are largely unregulated and can sting consumers with heavy fees and complex rules on usage. So how do you really know you're getting the best deal on a prepaid card?

Read on to see if a card works in your favor using five straightforward measures:
¿ 1. Your prepaid card has the same fraud liability as the best bank debit card:
Not all prepaid cards are alike, and that's especially so in the sensitive area of consumer credit card fraud. Before you commit to a card, or even if you're looking to switch prepaid cards, check with your card provider and make sure the carrier's prepaid fraud liability protection is as strong as its debit card's protections.
¿ 2. Your card has minimal fees:
Many prepaid credit cards offer a conga line of fees and penalties including ATM fees, usage fees, overdraft fees, monthly fees and other charges. Expect to pay some card fees, such as for ATM withdrawals, but you don't want to pay much else. Also, it's a good deal if your card carrier is transparent about the fees it does charge. Make sure to ask for a list of fees before you sign on the dotted line. If it's a short list, you've got a good card. The American Express Prepaid Card offers a great deal on fees, essentially charging only for ATM transactions.
¿ 3. You get free ATM withdrawals:
There are some prepaid cards that don't charge for ATM withdrawals - if you have one, hang on to it. For instance, the Green Dot prepaid card offers free ATM access to more than 22,000 cash machines across the U.S.
¿ 4. Your card has ample balance limits:
Who needs a prepaid card holds only $200? In this day and age, consumers can burn through several hundred dollars in a few days. It's better to have a prepaid card that holds thousands of dollars, giving you more financial wiggle room and saving money on frequent "reload" fees, which can cost up to $5 per cash input transaction.
¿ 5. Your prepaid card offers benefits:
Some prepaid card carriers, including Visa and American Express offer prepaid cards with rewards benefits. As the industry grows more competitive, expect more rewards programs tied to prepaid cards. In the meantime, if you have a card that offers cash back rewards, you have a winner.

Prepaid cards have abandoned their training wheels and are growing up. As the industry grows hotter, card benefits should become more pervasive.

Until that happens, make sure to see if your card carries the benefits described above. If so, you're a step ahead of the prepaid crowd.

More on prepaid cards:

Prepaid cards for teens

Prepaid cards gaining in popularity

The right ways to use a prepaid card

--By Brian O'Connell

Follow TheStreet on Twitter and become a fan on Facebook.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,880.36 -31.75 -0.19%
S&P 500 1,970.07 +0.12 0.01%
NASDAQ 4,462.9020 +20.2040 0.45%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs