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
See Cramer's multi-million dollar portfolio for FREE and get his new book Get Rich Carefully! Learn More

Prepaid Cards Lose Fees, Gain Users

NEW YORK (Credit-land.com) -- Prepaid cards are no longer for subprime customers. New, largely fee-free structures make them the choice for those looking for an alternative to a traditional bank account, as well as those who don't want to risk running up a balance on a credit card.

What was once a relatively simple business model in which banks took deposits and used those deposits to generate income is mostly gone. The friendly community bank where you knew the tellers by name aren't the same institutions anymore.

A study on prepaid cards by creditcardmenu.com highlights the fee-for-everything banking model that consumers hate, as well as their battle with debt where banks are doing little to help.

The new role of prepaid cards
Prepaid cards are taking on a new role as more consumers look for alternatives to the traditional bank account. These cards, the fastest-growing payment type, no longer serve only consumers with damaged credit. Because that was once the target market, these cards often charged high fees and came with terms that made them unpopular with consumer finance experts.

That has changed. To attract customers who would log a larger number of transactions, these cards now come with few or no fees and features that rival the best of debit and credit cards.

Prepaid cards introduced in the past year look and feel a lot like credit cards without the risk of amassing debt. Some even have bill-pay features and direct deposit so they can easily take the place of a savings account and debit card.

Who can benefit?
The report highlights three types of people who can benefit from prepaid cards:

  • Those who tend to build up large monthly bank fees from ATM withdrawals, service fees and over-the- limit fees.
  • Consumers who don't want to risk overspending with a credit card.
  • Parents who want to teach their children basic financial literacy while providing an alternative to cash.

Business owners can also use prepaid cards for employees who need to make company purchases without the unlimited spending power of a credit card.

How to pick a prepaid card
Like any credit card product, do a side-by-side comparison of the numerous cards on the market. Since the interest rate isn't a consideration, review the fee structure. Because the best cards have few or no fees, don't consider any card that is fee-laden. The report lists four cards that have no monthly fee and numerous benefits.

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.
DOW 16,501.65 -12.72 -0.08%
S&P 500 1,875.39 -4.16 -0.22%
NASDAQ 4,126.9670 -34.4910 -0.83%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

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