Consumer Reports: Tips for Using Prepaid Cards

 

When choosing a prepaid card, shop around.

Before you buy a prepaid card, compare what it costs to buy and use it by looking out for these specific fees:

  • Fees for withdrawing money. Look for prepaid cards that have free access to ATMs, sometimes called “in-network” ATMs.
  • Fees for loading money onto the prepaid card. Look for prepaid cards that have no- or low-fee load options at places that are convenient for you.
  • Fees for not using the card often enough. These can be called “dormancy” or “inactivity” fees. If you don’t plan to use your prepaid card much, these can eat up a balance, so look for prepaid cards that do not charge them or plan to close your account before these fees eat up any money left on your card.
  • Fees for calling customer service. Some prepaid cards charge a fee for automated or live customer service. Look for prepaid cards that make account information and help available at no fee.
  • Ask if there are any other fees or hidden fees.

If it’s not easy to find out about fees for a prepaid card, don’t buy it.

 

Compare what the prepaid card can do.

Each prepaid card has different features, so you want to make sure that the prepaid card you choose can do what you need it to do. Some things that might be important include:

  • Bill pay, especially with the ability to have a paper check sent.
  • Apps where you can locate in-network ATMs, manage your account, and even deposit checks via your mobile phone.
  • Linked savings accounts or the ability to create sub-accounts.

As with fee information, if you can’t easily find a card’s features and clear explanations of how they work, think twice before buying it.

 

Once you have a prepaid card, take these steps.

Register your prepaid card. Registering your prepaid card by providing personal information is usually necessary to ensure that you are eligible for the protections against loss and fraud that some prepaid cards voluntarily offer.

Avoid using a prepaid card where the merchant is likely to put a hold on your money. Try not to use prepaid cards to buy gas at the pump or to pay for hotels or rental cars. These types of companies can put extra holds on your card for a certain amount of time. During this time, you won’t be able to use all of your money.

 

Prepaid card problem? Report it.

Contact the Consumer Financial Protection Bureau (CFPB) if you have a prepaid card complaint.

Go online: www.consumerfinance.gov/Complaint

Call: 1-855-411-2372 (TTY/TDD: 1-855-729-2372)