Report says prepaid replacing checking

A report from CreditCardMenu.com said consumers are turning away from traditional bank accounts and toward prepaid card accounts as a way to avoid fees. In Are Prepaid Cards Replacing Checking Accounts? New Cards Have No Fees and Offer Online Bill Payment, the banking product comparison site said the newest repaid card offerings are "virtually fee-free and a practical option for many people who once used checking accounts and credit cards to manage their finances."

CreditCardMenu.com compared four prepaid schemes – Bluebird (American Express Co. and Wal-Mart Stores Inc.), My Vanilla (InComm), Serve (AmEx) and Discover Cashback Checking (Discover Financial Services) – and concluded that they can do "just about anything a bank account can do, but for less:"

By eliminating most fees and expenses, the use of prepaid cards is primed for growth, according to CreditCardMenu.com. The site quoted a Javelin Strategy and Research study that said, by 2017, total prepaid card purchasing dollar volume should reach $139 million, a nearly 37 percent increase from 2011, while volume growth was expected to reach 3.5 percent, up 30 percent from 2011.

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