Bankrate.com Surveys Prepaid Debit Cards, Finds Fees Galore All 18 Cards in the Survey Incorporate Fees; Two-Thirds Charge a Monthly Fee
NEW YORK, May 7, 2012 /PRNewswire/ -- Bankrate.com (NYSE: RATE) recently surveyed 18 widely issued prepaid debit cards and found that all 18 incorporate fees of some kind. "For the majority of consumers, a low-cost or free checking account remains the better option," said Greg McBride, CFA, senior financial analyst for Bankrate.com.
"Consumers with a tendency to overdraw their checking accounts or those unable to obtain checking accounts may find a prepaid card to be a suitable alternative, but it is important to shop around to find the card that will produce the lowest fees for the cardholder's particular financial tendencies," McBride added.
For a consumer making 10 purchases per month, four bill payments, one customer service call, one out-of-network ATM withdrawal and a balance inquiry at the ATM, the range of monthly costs is more than $20, highlighting the importance of shopping around.
Two-thirds of the cards that Bankrate surveyed (12 of 18) have a monthly fee ranging from $2.50-$9.95. Four of these will waive the fee with direct deposit or by loading $1,000-$2,500 onto the card.
Seven of 18 (39%) have no activation fee under any circumstances. Of the 11 cards with activation fees, the range is $3.00-$14.95. Two of the cards do not charge an activation fee if issued online.
None of the issuers charge a reload fee, but fees to reload at retailers are common.
Twelve of 18 (67%) do not charge for point-of-sale transactions. Of the five cards that do charge, the range is $0.49-$2.00. One card does not permit debit point-of-sale transactions. Fifteen of 18 (83%) do not charge for signature-based purchases, and the range of fees among the three cards that do is a narrow $0.95-$1.00.
Sixty-one percent (11 of 18) charge for using the issuer's own ATMs (ranging from $1.50-$2.50). Three cards are not affiliated with a specific ATM network.
All 18 cards charge a fee for withdrawals from another institution's ATM, though two cards will permit one such free withdrawal per month.
Fourteen of 18 (78%) charge a balance inquiry fee depending on the ATM used, and one card says balance inquiries are unavailable at the ATM. The range of fees is $0.45-$1.00 at the issuer's own ATM and as high as $2.50 at a non-issuer's ATM, comparable to a checking account.
Bill Payment Fees
Fourteen of 18 (78%) do not charge a bill payment fee. Of the four cards that charge, the range is $0.50-$1.50, and two of the cards provide three free bill payments per month before charging $1.50 for each thereafter.
Declined Transaction Fees
Two-thirds (12 of 18) do not charge when transactions are declined due to an insufficient balance. Of the six cards that do charge for some or all declined transactions, the range is $0.25-$2.00; two only charge a declined transaction fee at an ATM.
One-third (six of 18) charge an inactivity fee ranging from $1.95-$5.95 after three-to-12 months of inactivity. Forty-four percent (eight of 18) do not charge an inactivity fee, and four of 18 (22%) will simply close the card after three-to-five months of inactivity.
Customer Service Fees
Sixty-one percent (11 of 18) do not charge for live customer service. Of the cards that charge, the fees range from $0.50 for a balance inquiry to $4.95 for a cash transfer. The most common fee structure is $2.00 per customer service call, though three of the five cards charging it provide at least one free call each month.
Statement by Mail Fees
Sixty-one percent (11 of 18) charge a fee ranging from $1.00-$5.95 to receive a statement by mail. One-third (six of 18) do not charge for statements via mail, and one card does not offer paper statements.
Bankrate.com conducted the survey from March 19-23, 2012. It included 10 prominent issuers and 18 widely issued prepaid debit cards. Click here to view the full survey: http://www.bankrate.com/finance/banking/best-prepaid-debit-cards.aspx.
About Bankrate, Inc.
Bankrate is a leading publisher, aggregator and distributor of personal finance content on the Internet. Bankrate provides consumers with proprietary, fully researched, comprehensive, independent and objective personal finance editorial content across multiple vertical categories including mortgages, deposits, insurance, credit cards, and other categories, such as retirement, automobile loans, and taxes. The Bankrate network includes Bankrate.com, our flagship website, and other owned and operated personal finance websites, including CreditCards.com, Interest.com, Bankaholic.com, Mortgage-calc.com, CreditCardGuide.com, Nationwide Card Services, InsuranceQuotes.com, CarInsuranceQuotes.com, InsureMe, Bankrate.com.cn, CreditCards.ca, NetQuote.com, and CD.com. Bankrate aggregates rate information from over 4,800 institutions on more than 300 financial products. With coverage of nearly 600 local markets in all 50 U.S. states, Bankrate generates over 172,000 distinct rate tables capturing on average over three million pieces of information daily. Bankrate develops and provides web services to over 80 co-branded websites with online partners, including some of the most trusted and frequently visited personal finance sites on the Internet such as Yahoo!, AOL, CNBC and Bloomberg. In addition, Bankrate licenses editorial content to over 500 newspapers on a daily basis including The Wall Street Journal, USA Today, The New York Times, The Los Angeles Times and The Boston Globe.
Public Relations Manager
SOURCE Bankrate, Inc.