Trends: What’s New With Prepaid Debit Cards?
With new government regulations coming, I thought it was time to provide an update on this fast growing financial product which is fast becoming a substitute for checking accounts (I provided a prepaid debit card primer in August). So, what’s new?
- Consumer Reports ranks the best prepaid debit cards based on the following factors: value, convenience, safety and transparency of fee disclosure. The winner: Bluebird Card from American Express and Wal-Mart:
“Topping the list is the Bluebird card (by American Express and Walmart), which comes without a monthly fee, no inactivity fees or fees for calling customer service, along with a bill paying feature and no-overdraft paper checks. “
- The CFPB is expected to keep a closer eye on the industry (WSJ). What are they focusing on?
U.S. officials plan to unveil this week a comprehensive slate of consumer protections for prepaid debit cards, according to people familiar with the matter, a move that could further broaden the customer base for the fast-growing product.
The Consumer Financial Protection Bureau’s proposed rules, expected Thursday, will include standards for how prepaid-card companies disclose fees and make it harder for borrowers to spend more money than they have loaded onto the card, the people said.
- Here’s a chart showing the dramatic growth in the industry:
Check out the NGPF lesson on Picking a Payment Method.
About the Author
Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.