Enter the prepaid credit cardsTo avoid fees and keep spending in check, recent reports suggest more Americans may be turning to prepaid credit cards and debit cards instead of traditional checking accounts. Prepaid cards offer the opportunity to load a preset amount of money onto a card which can then be used anyplace the sponsoring card issuer -- typically Visa, MasterCard or American Express -- is accepted. A recent study from the Federal Deposit Insurance Corporation found one in four households have used alternative financial services, such as prepaid debit cards and credit cards, in the past year. In addition, 10 percent of households have no checking account, which may indicate some consumers are skipping their local bank and exclusively using a reloadable card to manage their money.
Walmart hopes Bluebird will soarWhile the American Bankers Association reports nearly 60 percent of banks offer their customers prepaid cards, the game-changer for 2013 may be the introduction of American Express's Bluebird 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.