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12:16 am - Sunday September 25, 2016

Prepaid Debit Cards’ Hidden Costs

| Credit Cards | Rating: 4.5
by Numan

Prepaid debit cards are just like regular debit cards in the way payments are made. The main difference is that prepaid cards are reloadable.

But prepaid debit cards come with high fees and fail to protect as strongly as traditional credit or debit cards. Most prepaid cards have an activation fee. This fee can go as high as $39.95! Many also have a monthly fee, going from $2.95 to $9.95. All of them charge a fee to withdraw cash from an ATM and another fee to check the balance on the card at an ATM.

If you lose a prepaid card, you don’t get as much protection as with a regular credit or debit card. You may not even be able to recover any of your money. Once you lose a prepaid debit card, you have to report it within two business days to limit your loses to $50. Otherwise, your liability goes up to $500.

Make sure your prepaid card is also FDIC insured. If not, you may lose all your money in the event of a bank failure.

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