Discount retailer Target and American Express are partnering up in time for the holiday shopping season in order to offer co-branded prepaid card. The American Express prepaid card, which will be offered exclusively at over 1,000 Target stores county-wide, is AMEX`s first venture onto the prepaid card landscape.
“We`re excited to partner with Target to provide consumers with a safe and secure everyday payment tool,” said Stefan Happ, the Senior Vice President and General Manager of the Global Payment Options division at American Express, according to Market Watch.
Prepaid cards work much in the same way debit cards do, in that the cardholder does not draw upon a line of credit when making purchases. They are traditionally marketed to lower-income individuals who are unable to qualify for credit cards or checking accounts. They can be reloaded with cash when funds run low and the corresponding fees vary according to the issuer.
The AMEX prepaid card being sold at Target comes bearing only two fees: a $3 charge each time money is loaded onto the card and $3 per withdrawal made at an ATM if more than one withdrawal per month is made. There is no charge first time money is withdrawn from the card at an ATM each month. If the cardholder opts to reload the card with funds via the telephone or online, there is no charge.
More and more consumers are expected to take advantage of prepaid cards in the near future as many struggle to control their spending and cut down on their personal debt load in the wake of the recession.
American Express has cultivated a reputation for providing affluent consumers with elite payment products, but over the summer they made the decision to make a foray into the expanding prepaid card industry by creating a card that come attached with a fee structure that is simpler fee structure than some of the other prepaid options on the market. That particular card is available for purchase online and is set to become available in retail and drug stores within a few months.