Richmond’s Prepaid Card: Consumers May Do Better Elsewhere

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By Consumers Union on Thursday, October 9th, 2014

Last week, the city of Richmond, California, launched an identification card that comes with an optional prepaid card feature. It’s run by the same company behind the Oakland City ID-prepaid card hybrid that launched last year.

We were critical of the original Oakland ID-prepaid card because the prepaid card was loaded with fees, making it a bad deal for consumers. That’s why we’re taking a close look at the prepaid card on offer from Richmond.

 

Screenshot of the Richmond, California City ID Prepaid Card website

Screenshot of the Richmond, California City ID Prepaid Card website

 

The Richmond ID Prepaid MasterCard fees look a lot better that the original Oakland prepaid card. For example, unlike the original Oakland proposal, Richmond’s prepaid card has no point of sale fees, including no fee for making purchases out of the country. (Point of sale fees are what you get charged for spending your own money at a store.) That’s a big improvement.

The new Richmond ID-prepaid card has relatively low monthly fees, ranging from zero to $3.99, depending on how much you load on the card or if you swipe your card enough. We are in favor of low, clearly disclosed fees, and the Richmond prepaid card’s fees are in line with what the better prepaid cards are charging.

The Richmond City ID Prepaid MasterCard comes with free text alerts and mobile banking features, which – research shows – are important to helping consumers manage their accounts. So this is a positive for consumers. And the Richmond ID-prepaid card is free from harmful features like overdraft, features we’d like to see banned from all prepaid cards.

But it’s not all sunshine and roses.

While the Richmond ID-prepaid card has free automated customer service and one free live customer service call – and is therefore a better deal than the $1.75 per call the original Oakland ID-prepaid card – there is a $1 fee per live service call after that first no-fee one. With things like data breaches and other problems outside of consumers’ control, we think all calls to customer service should be no charge. The better prepaid cards on the market make these services available at no fee.

The Richmond ID-prepaid card also apparently offers two no-fee in-network ATM withdrawals a month, per this news article. We had some trouble understanding how the fees for ATM withdrawals work, since the fee display on the website says this:

MoneyPass Network ATM Withdrawal domestic
(2 ATM withdrawals/month included)
$1.00

 

What does “included” mean exactly? We will assume that here ‘included’ means two free in-network ATM withdrawals per month. In-network is good for consumers, as usually having in-network ATMs allows consumers to avoid hefty fees for getting cash. But the Richmond ID-prepaid card would be better if all in-network ATM withdrawals were free. Consumers, after all, may need cash more often than once a pay period, and the better prepaid cards on the market make all in-network ATM withdrawals no fee.

Another problem: we had a hard time finding all the fees. For example, a local newspaper reports that you can use the Richmond ID-prepaid card to send money overseas for $5, but we didn’t see that in the fee display on the website for the prepaid card.

Worse, we found a number of listings online for the Richmond ID-prepaid cards’ fees – see here and here – but presumably only one is true since the fees vary a lot between the two.  Consumers need accurate information in order to compare fees and features, and the city and the prepaid card program manager should make sure that all information online is up-to-date and accurate.

Prepaid cards can be useful tools for consumers, but they can vary a lot. The Richmond ID-prepaid card looks much better than the first round of the Oakland ID-prepaid card, but – for the reasons cited above – we still have doubts that it’s a better prepaid card than what’s available on the open market. Our advice: shop around.

Have you used a prepaid card? We want to hear from you. Click here to share your story.

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