Prepaid cards have never been more popular, it seems, with new ones popping up every week. The latest entry is from American Express, which is partnering with Barnes & Noble College Campus Bookstores to debut The American Express Campus Edition Personalized Card, designed for college students.
Students will be able to buy the card at Barnes & Noble college bookstores across the country for $4.95 and load it at the register with any amount from $25 to $500. Cards purchases at Barnes & Noble locations will be temporary cards; customers can order permanent, personalized cards online at no charge. In order to get the full benefits of the card, customers must order the permanent card at some point – they can trade in their temporary card and any money on it will be transferred over once the permanent card is activated.
The card carries no fees for many actions that other prepaid cards charge for, such as card activation, reloading, monthly fees, and purchase fees. With the American Express Campus Edition card, the following are free:
- No fee for purchases
- No monthly use fee
- No overdraft fee
- No card activation fee
- No annual fee
There is a fee for ATM withdrawals after the first one every month. One ATM withdrawal per month is provided for free, and after that a fee of two dollars per withdrawal will apply, in addition to any fee charged by the owner of the ATM.
How Much Money on Prepaid Cards?
If it seems that prepaid cards are everywhere these days, that`s because they are. In 2009, customers in the United States spent $28.6 billion on reloadable prepaid cards. By 2013, it`s projected that US consumers will spend more than six times that amount – a whopping $201.9 billion.
The market for prepaid cards just keeps growing, as people get fed up with high fees for checking accounts and banks look for new ways to draw disgruntled consumers back.
Why So Many Prepaid Cards?
With so many prepaid cards on the market now, people may wonder why there is such a proliferation of them, and what their benefits are. One of the main uses of prepaid cards is for students or other young people without a lot of credit history, or without income of their own. A parent who wants to provide an older child with allowance can give a prepaid card loaded with a set amount of money, knowing the child can use the card without fear of getting into debt or overdrawing an account.
Regarding the student population and the prepaid phenomenon, Michael Germanovsky, editor-in-chief of Credit-Land.com, gives his take: “The great thing about using a prepaid card is that students cannot become overdrawn or in debt to a bank. There are no overdrafts and no credit line attached to prepaid card, so students can only spend what is loaded on the card. Once its gone, it`s gone. Students have enough to worry about – from room and board to studying and buying books, not to mention an active social life – so it can be easy to lose track of finances. Prepaid cards are a great budgeting tool for students.”
Excellent American Express Benefits
The temporary prepaid cards will be able to be used anywhere in the US where American Express is accepted, and the permanent ones can be used globally wherever American Express is accepted. Funds will not expire, and with the permanent card, customers also get these great American Express benefits:
- Purchase protection against theft of damage for 90 days, up to $1,000 per item or $50,000 per year
- Roadside assistance such as battery jumps and flat tire changes
- Trip planning services
- 24/7 card member assistance
- Access to special events and advance tickets
- Email and text alerts to track personalized spending limits
- Automatically schedule reloading of funds