Prepaid “debit” cards are marketed as safe and convenient ways for consumers to manage their money. These cards can be used at ATMs, to make purchases at stores and online, and can be reloaded with more money—much like debit cards linked to bank accounts. Yet, they may leave you empty-handed due to fees and the lack of guaranteed consumer protections.
Prepaid cards are the newest plastic payment cards. They look like debit cards with a logo from a major card network. Consumers are likely to purchase these cards for a fee, and often pay additional fees to use the prepaid funds loaded onto the card to make purchases or pay bills. These cards function much like a debit card linked to a bank account, but do not have the same guaranteed consumer protections. Gift cards issued by a retailer have different laws. Click here to learn more.
We support reforms to the financial marketplace to curb bad practices by banks and lenders.