Prepaid Cards are Convenient But Can Come at a High price

HARTFORD, Conn. - July 1, 2013 - PRLog -- Connecticut BBB Offers Tips for Selecting and Protecting Your Plastic Cash

Connecticut Better Business Bureau cautions consumers to thoroughly research and compare products when considering purchasing a prepaid debit card.

These products are sold by banks and a growing number of retailers.  Consumers load a pre-determined amount of money, and then re-load them as needed.  

They are also very popular.  Mercator Advisory Group estimates consumers loaded $77 billion onto prepaid debit cards in 2012 and forecasts that amount will more than double by 2015.  However, the anonymity and convenience they offer must be balanced against the cost of using or not using them.

Prepaid cards are popular among consumers who have a poor credit history or no bank account, and to control spending, for online payments, anonymity, travel and gifts.  They can help young people establish a credit history and are safer than carrying cash, and are a very attractive alternative to store-specific gift cards inasmuch as they are less risky in case a company or store goes out of business.

The list of fees associated with prepaid cards is lengthy, and includes activation, monthly maintenance, transaction fees, reloading, ATM charges and foreign transaction fees.  The types and costs of these fees vary widely, so BBB urges consumers to compare several prepaid card vendors before purchasing one.

Connecticut Better Business Bureau advises consumers to also protect their cards as if they were cash.

Don’t send by mail - They are used by scammers and can be emptied.

Keep the PIN private - Don’t write your Personal Identification Number (PIN) on the card.  It may be convenient, but it’s risky if the card is lost or stolen.

Be careful online - If you are buying from an online merchant you don’t know, classified or auction site, don’t give the seller your card’s PIN.

Don’t overload your card - You wouldn’t carry $5000 in your wallet.  Don’t put that much on a prepaid card if you don’t have to.

Keep customer service number with you - Take note of the card number and customer service number in case it is lost or stolen and immediately report any suspicious activity.