In this era of rising bank fees, a new type of plastic is gaining ground! It’s prepaid debit cards and they do not require a bank account. You can buy them in stores and online. They bear familiar logos like MasterCard and Visa. And like a regular debit card, you can use them to make purchases and to get cash at ATMs.
But after examining the extensive terms and conditions of 16 prepaid debit cards, Consumer Reports says that’s where the similarity ends.
If your prepaid card is lost or stolen or there are errors on your account, you don’t have the same legal protections that you do with a traditional debit or credit card. And there can be lots of fees.
Take the AccountNow Gold Visa Prepaid card. Its fees include a monthly charge of $9.95 unless you’ve loaded $2,500 on the card that month. Using an ATM to withdraw cash costs $2.50. And if you want to close your account and get a check for the remaining balance that costs $15.95.