You can only spend what you "load" onto the card, so no credit check is needed. But Consumer Reports' investigation of 26 prepaid debit cards found that some carry hefty charges. You can be charged an activation fee, a "swipe fee" every time the card is used, a monthly maintenance fee, and even a "dormancy" fee for not using the card often enough.
Consumer Reports says some of the highest fees are on the AccountNow Gold Visa Prepaid Card. It charges $9.95 per month, as much as $4.95 to load money onto the card, and $2.50 for every ATM withdrawal.
And with the NetSpend Prepaid Visa Pay as You Go card, you're charged every time you use the card. For a daily user of the NetSpend Pay as You Go card, the "swipe" fees could add up to hundreds of dollars a year.
The worst prepaid card in Consumer Reports' ratings is the American Express for Target. If you don't have a bank account or direct deposit, you can only reload it at a Target store. You almost always have to pay a fee to get cash from an ATM, and the card isn't FDIC insured.
But Consumer Reports did find some cards that offer good value and convenience. They include the Emerald card from H&R Block and the Bluebird card with direct deposit. The Green Dot Card is another good choice. Almost all fees can be avoided if you use it 30 times a month and reload it with direct deposit.
With most prepaid debit cards, figuring out the fees can be tough. You have to search the fine print. Also be aware that prepaid cards are not protected by law against loss or theft, though most issuers have voluntary protections in place.
