Hidden Fees in Pre-Paid Cards - FOX 32 News Chicago

Hidden Fees in Pre-Paid Cards

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Pre-paid Cards are gaining popularity. They're easy to use, but there's often a catch. A new government survey finds too many hidden fees wrapped up in these pre-paid cards.

First, let's explain why so many folks are picking this kind of plastic. Not everyone has a bank account. With a pre-paid card you sign up, get the card, load it with money, then use it as a debit, credit or gift card. When it's out of money you toss it or reload it.

Also, people learning to budget often use them as a tool for staying on track. These are all good reasons, but there are pitfalls.

The Massachusetts Consumer Affairs Office conducted a survey. The Department looked at 11 pre-paid cards and their fees, and what stood out is how confusing it was to figure out how the fee structures worked.

One card had 14 different fees. One had a $25 cancellation fee. That was the most expensive one they found. And, six of the cards, according to the survey, charged the user a fee for every single transaction.

Check out the links below to the study and a press release. There is lots of interesting information there if you rely on pre-paid cards. For example: There is actually a card that charges you to use your own pin.

There is a place for pre-paid cards in the market, but you need to find one that is affordable and only charges you reasonable fees for using it. Don't get gouged. It's up to you to do your homework.

Read further: Office of Consumer Affairs Reports Prepaid Cards a Costly Alternative to Bank Accounts

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