Prepaid Cards More Affordable Than Checking Accounts - Other News

Advertising Disclosure is an independent, advertising-supported web site. receives compensation from many credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. has not reviewed all available credit card offers in the marketplace.

Credit Card Applications » News » Other » Prepaid Cards More Affordable Than Checking Accounts

Prepaid Cards More Affordable Than Checking Accounts

Add to Favorites:

Prepaid is increasingly the way to go for many consumers today. General purpose reloadable (GPR) prepaid cards are growing in popularity because they are increasingly accessible and in many cases more economical than basic checking accounts, according to a new report by the Pew Charitable Trusts.

GPR prepaid cards are a relatively new consumer financial product that can be used to get cash at ATMs and to shop online and in stores. Five percent of adults or about 12 million people now use prepaid cards at least once a month. In 2012 consumers in the U.S. loaded more than $64 billion onto the cards, more than double the amount loaded in 2009.

Prepaid cards a better deal

The study found that the growing use of GPR prepaid cards is positive for consumers. When comparing the cost of prepaid cards and checking accounts offered at the same large financial institutions, prepaid cards are often a better deal, the study concluded.

The primary motivation cited for using prepaid cards was gaining control over finances. “More consumers are turning to prepaid cards as a convenient tool to control spending and fees,” said Susan Weinstock, who directs Pew’s safe checking research.

Since 42 percent of card users in the study had no emergency savings, the primary reasons for preferring prepaid cards were to purchase online, as well as to avoid credit card debt, spending beyond their means and overdrafts.

Savings features desired

Prepaid cards have proven so helpful to the ability to control finances that two out of three card users in the study expressed interest in features that would make it easier for them to save money. Many of the survey respondents opposed adding features that would allow them to overspend what is on the card, such as credit or overdraft capabilities.

The study notes that although prepaid cards offer many benefits to consumers, protections lag far behind other banking products, including no federal laws or regulations to protect consumers from hidden fees, unauthorized transactions, or loss of funds.

The fee structures of many cards are also changing, with more charging monthly fees but not other transaction-based fees, such as point-of-sale or customer service fees. This fee structure is coming more in line with traditional checking accounts.

All credit cards terms, fees and rates mentioned in this article/post are actual on the posting date. See the current products’ Terms & Conditions on the issuing banks' websites.
Add to Favorites:

Related News:

Free Toolkit Aims to Help Seniors Understand Prepaid Cards
Free Toolkit Aims to Help Seniors Understand Prepaid Cards

Posted: January 20, 2014

If your grandparents have trouble figuring out how to use a prepaid card or gift card, they’re not alone. Many seniors struggle to manage their various cards, and they are carrying more of them than ever. Continue reading
Consumers Remain Wary of Retail Fraud
Consumers Remain Wary of Retail Fraud

Posted: July 30, 2014

After a year in which several massive data breaches made headlines, shoppers around the globe are wary when it comes to trusting retailers with their payment information. Continue reading
Millennials Money Attitudes Different from Mom and Dad
Millennials Money Attitudes Different from Mom and Dad

Posted: February 06, 2015

When it comes to money, members of the Millennial generation think differently from their parents. The credit counseling firm Consolidated Credit looked at opinion polls touching on the topic of Millennials and finances to compile some... Continue reading
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.
We'll match all the Miles you've earned at the end of your first year. For example, if you earn 30,000 Miles, you get 60,000 Miles.
For Excellent, Good Credit
You could turn $150 into $300 with Cashback Match™. Get a dollar-for-dollar match of all the cash back you've earned at the end of your first year, automatically.
For Excellent, Good Credit
No Annual Fee. See WebBank/Fingerhut Credit Account Terms.
For Bad Credit