Debit Card FEE-For-All

Based on recent conversations in Las Vegas at a bank executives’ retreat, it sounds like the jury is going to be out for some time deciding the future of how traditional banks are going to make up lost profit from the recent Durbin Interchange Fee legislation. With the implementation of the new law, it has been estimated that over $6 billion in revenues will be lost by the big banking industry. The prepaid debit card industry is currently exempt from the hammer put down on the big banks (for now). With all of the change occurring in the financial markets, we have to wonder if these changes will help the prepaid debit card industry and will the players make their own fee structures simple and transparent?

At this point, not all prepaid cards are equal and not all fees are transparent. What consumers can do is peruse through several prepaid cards and made comparisons. There are several ways to avoid fees depending on card holder’s needs. Online and merchant shoppers should look for cards with little or no POS (Point of Sale) PIN or signature transaction fees. Some cards have activation fees, but many do not. By choosing to direct deposit your paycheck, you might avoid a pesky monthly maintenance fee with several different cards. For cash hounds that like to visit the ATM machine, prepaid companies usually charge around $2.00-2.50+ for each withdrawal. To avoid this charge, find a card that allows “cash over” when shopping at a merchant.

While the above are the most prevalent fees to look out for, here is a broad list of fees that might be encountered when comparing prepaid debit cards:

  • Activation or Setup Fee
  • Monthly Maintenance Fee
  • ATM Withdrawal Fee
  • ATM Balance Fee
  • ATM Decline Fee
  • Bill Pay Fee
  • Load or Reload Fee
  • Money Transfer Fee
  • PIN POS or Signature POS Fee
  • PIN POS or Signature POS Decline Fee
  • Live Customer Service Phone Fee
  • IVR (Interactive Voice Response) Fee
  • Secondary Card Fee
  • Teller Cash Advance Fee
  • Expedited Card Delivery Fee
  • Replacement Card Fee
  • Stop Payment Fee
  • Paper Statement Fee
  • Direct Deposit Fee
  • Charge Back Processing Fee
  • Wire Fee
  • Return Check Fee
  • Negative Balance Fee
  • Account Closure Fee
  • Inactivity Fee
  • ATM Decline Fee
  • Currency Conversion Fee
  • International ATM Withdrawal Fee
  • International ATM Decline Fee

While there are certainly other fees that might be encountered in the prepaid universe, these fees crop up in several prepaid cards. Not all cards are created equal and many have simplistic fee structures. Remember, the more power and flexibility a prepaid card has, the more fees are probably associated with that card.

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