Good-bye Checking Account, Hello Prepaid Card
Launched as a partnership with Walmart, the Bluebird prepaid card is being marketed to the mega-retailer's millions of customers. The hope is to cash in on disgruntled consumers who may be feeling used and abused by fees at the big banks. While Walmart and American Express are keeping hush on the details of how each will profit from Bluebird, it isn't hard to see how the arrangement will be a win-win should the cards take off with the public.
Not all prepaid cards are created equal
Although prepaid cards such as the Bluebird promise lower fees than checking accounts, consumers still need to shop around for the best deal. The Pew Charitable Trusts studied the issue of using prepaid cards as an alternative to checking accounts and found the cards can come with a mish-mash of confusing fees and fee disclosures.
The 52 general purpose reloadable cards examined in the study had anywhere from 7 to 15 individual fees that could range from 50 cents to $9.95. What's more, fee disclosures for the cards could be confusing at best for some products.
While the federal Consumer Financial Protection Bureau is considering recommendations regarding how to standardize fees and disclosures for prepaid debit cards and credit cards, right now, it is up to consumers to do their homework.If you are one of the consumers feeling smitten with prepaid cards, be diligent about selecting the right card. Make sure you can conveniently access your money and that you aren't trading your high-fee checking account for a high-fee prepaid card.
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