Prepaid card fees coming down, CardHub says

Financial services product comparison site CardHub.com issued annual research into the prepaid card industry that concludes card usage fees are down overall, but up in some categories. In its 2013 review, the Evolution Finance Inc.-owned site compared its findings to 2012 and found that fees on cards used primarily as alternative checking accounts had decreased by 46 percent, while cards employed principally as a check cashing alternative increased by 9 percent.

CardHub noted that the average number of fees per card is 10, with the highest being 18 for a NetSpend Holdings Co. managed card and 1 being the lowest for two American Express Co. products. The cost of prepaid cards for consumers varies greatly based on card usage rates, with annual costs ranging from $0 to $360, the site said.

CardHub also said cards linked to celebrities, such as Justin Bieber, Suze Orman and Russell Simmons, are 17 percent to 36 percent more expensive to use than other cards. For its research, CardHub categorized prepaid cards by four primary usage patterns:

• Checking account alternative
• Allowance tool for parents and children
• Check cashing alternative
• Debit/credit card alternative (electronic access)

Based on those categories, CardHub evaluated 26 prepaid cards based on fees and features. In the alternative checking account category, the cards of Green Dot. Corp. and AmEx were judged the best with the lowest fees, while the Visa Inc.-branded, general purpose reloadable card operated by Kaiku Finance LLC was rated the best card to handle childrens' allowances.

In the alternative checking account category, the Chase Liquid Card and the PNC Smart Access Prepaid Card were deemed the best. And in the electronic access category, the AmEx and Wal-Mart Stores Inc. Bluebird program, as well as the Chase Liquid card, were rated the best, with both card programs being fee free in that category, CardHub said.

According to the site, the worst cards per category were:

• Checking account alternative: AccountNow Visa Classic
• Allowance tool for parents and children: NetSpend Prepaid MasterCard (Pay As You Go Plan) and the ACE Elite Prepaid Visa (Pay As You Go Plan)
• Check cashing alternative: AccountNow Gold Visa Classic
• Debit/credit card alternative (electronic access): Green Dot Gold Visa Prepaid Card

Editorial Note:

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