Thursday, October 08, 2009
Pre-paid debit cards are proving to be an expensive way for Americans who don’t have checking accounts to conduct their banking, making them an especially lucrative new business for banks. It is estimated that 80 million consumers, more than 25% of the U.S. population, rely on pre-paid debit cards to pay bills or cover purchases. Many of those who use the cards, though, are unaware of the numerous fees involved.
For instance, the MiCash Prepaid MasterCard costs $9.95 just to activate it, plus there are charges for ATM withdrawals ($1.75), ATM balance inquiries ($1), purchases ($.50), monthly maintenance ($4), inactivity after 60 days ($2) and calling customer service ($1).
Those who use the pre-paid cards are mostly low-income people, immigrants and college students.
-Noel Brinkerhoff
Prepaid, but Not Prepared for Debit Card Fees (by Andrew Martin, New York Times)
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