Almost everyone has a tale of woe when it comes to fees charged by bank cards and credit cards, but what about prepaid debit cards—the new kid on the block?
Reportedly, some 80 million Americans are using these cards in lieu of having a bank account— and it’s proving exhaustively expensive. Why? These types of cards automatically deduct a laundry list of fees, information on which may not be easily found, and which can result in a “Surprise!” zero balance. You know—you put $200 on the card, spend $150 and then go to make a $20 purchase sometime later only to have it declined due to insufficient funds. Where’d the remaining $50 go? To the card company—in fees.
Take Green Dot . for example. Green Dot is among the largest providers of prepaid debit cards in the US. Here’s a list of their fees that are not put front and center on their marketing materials:
Who is Green Dot’s largest market? People who can least afford these kinds of fees, and likely may not be able to understand the fine print—immigrants and people on low incomes who do not have access to bank accounts—a much less expensive means of handling purchases, paying bills and other things these cards are often used for.
Recently, Frontline and the New York Times did an investigative piece (above) on the “industry”—which has grown at an alarmingly rapid rate. So much so in fact that congress has instructed federal regulators to have a little looky-loo into the “industry.”
And, what about the term “prepaid”? It seems to be a bit of a misnomer here. As far as I can tell it’s really only the institutions that issue these cards that are prepaid—you prepay their fees.
The whole thing smacks of the excessive bank overdraft fees situation which the federal government is looking at regulating. Interestingly, some people aren’t waiting for the government to enact legislation on overdraft fees, and have filed lawsuits. And the prepaid debit card industry is following suit—no pun intended.
I sent my son money through Walmart green dot. I had to pay I believe $4. to send the money. When he went to get it they charged him close to the same amount to receive the money. This was probably 3 or 4 years ago, I just don't remember now. My son was disabled from the Metronic device that the doctor put in his neck which had not been approved so he had to have a MRI with the contrast dye and then when the surgon saw it he could not do surgery as he knew nothing about the implant. This continued on for 7 MRI"S and that ended up with failed kidneys, gangreened gall bladder surgery, a ballooned artery too close to his heart and could not have surgery done on it and his toes were turning black just before he died last September 10. [2011] Green Dot taking advantage of poor people that live on disability. I have nothing to show for this as it has been too long ago and he is deceased.