Your Pre-Paid Debit Card May Be Riddled With Fees

A leading financial rate aggregator says consumers should know all the facts before they sign-up for a pre-paid debit card.

Bankrate.com recently took at look at 18 of the most widely issued prepaid debit cards and found that all of them come with fees, some more than $20 a month.

Greg McBride is a senior financial analyst at Bankrate.com.

"Some were higher, some were lower, some had more fees, some had fewer fees. But, the one common theme throughout was in fact that they all had a fee of some kind. So it's important for consumers to shop around and make sure that the card they're getting is the one that's going to present the lowest total cost for how they plan to use the card. And for most people, a low-cost or free checking account is still going to be your better alternative."

McBride says prepaid debit cards are typically used by people who don't have or can't get a checking account or for parents sending kids off to college. He says as many as a third of U.S. households are currently unbanked or under-banked, making the prepaid cards an attractive option.

Bio photo of Jack Williams

Jack Williams

Director of News Programming

News Director Jack Williams has been with Houston Public Radio since August of 2000. He's also a reporter and anchor for Houston Public Radio's local All Things Considered segments...