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Prepaid Cards

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.

Publications

  • Group letter calls on FDIC to make safe template for prepaid cards

    To: Federal Deposit Insurance Corporation SafeAcctPilot@fdic.gov From: Calvert Asset Management, Inc. Consumer Action Consumer Federation of America Consumers Union National Consumer Law Center® (on behalf of its low-income clients) Sergeant Shriver National Center on Poverty Law Re: Safe Transaction Account Template for Prepaid Cards Date: November 24, 2010 Calvert Asset Management, Inc., Consumer Action, Consumer Continue Reading

  • Prepaid Cards: Second-Tier Bank Account Substitutes

    Prepaid Cards: Second-Tier Bank Account Substitutes Consumers Union, the nonprofit publisher of Consumer Reports ® By: Michelle Jun, Staff Attorney With Consumer Federation of America and National Consumer Law Center, on behalf of their low-income clients September 2010 Prepaid cards are widely marketed as more convenient, safe and cost effective, a straightforward way to manage Continue Reading

  • CU comment on “end of checks” proposed rule

    Comment on Treasury proposal to amend 31 CFR Part 208.

  • Group Comments to FDIC on Safe Transaction and Savings Accounts

    Consumer Action, Consumer Federation of America, Consumers Union, National Consumer Law Center (on behalf of its low income clients), and US PIRG welcome the opportunity to comment on the FDIC’s proposed templates for Safe Transaction and Savings Accounts to benefit low and moderate income consumers. Consumers currently in the ranks of the unbanked and under-banked Continue Reading

  • Consumers Union submits letter to the Federal Reserve Bank of San Francisco regarding Green Dot’s application to acquire Bonneville Bank

    March 25, 2010 Kenneth Binning, Vice President Federal Reserve Bank of San Francisco 101 Market Street San Francisco, CA 94105 RE: Green Dot Corporation Application to Acquire Bonneville Bancorp. Dear Mr. Binning: Consumers Union, the nonprofit publisher of <em>Consumer Reports</em>®, respectfully requests the Federal Reserve Bank of San Francisco to carefully consider the following concerns Continue Reading

  • Letter to Federal Reserve asking for same protections to prepaid cards as debit cards

    The change is essential to fully apply consumer protections to all prepaid cards and other similar devices which function as bank account substitutes

  • Prepaid Cards

    Have you run into fees and other problems with prepaid “debit” cards?

  • California Unemployment Insurance Card

    Government agencies are issuing payments on plastic cards that resemble and act like debit cards. Consumers should have access to their funds without bearing additional cost and have strong protections against fraud and loss.

  • Prepaid Cards

    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.

  • OCC response on prepaid cards and FDIC insurance coverage

    Per Consumers Union letter, Comptroller of the Currency responds regarding prepaid cards.

Press Releases

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Blog Posts

  • Consumers Shifting Away From Banks

    According to a recent Wall Street Journal article Middle-class Americans are spending less time in the bank lobbies their parents would recognize. Today, 8.2% of the nation’s households—nearly 12 million—are managing their finances without a bank, according to Census-based data the Federal Deposit Insurance Corp. will make public Wednesday. That is up from the 7.7% Continue Reading

  • What’s Behind the Magic Prepaid Card

      There’s another prepaid card on the market today, the Magic by Magic Johnson prepaid card., issued by OneWest Bank.   We found the fee schedule to be fairly straightforward.  Here’s a quick summary:  One-time set up fee:  $4.95 This fee is waived if at least $50 is initially loaded onto the card. Monthly fee: $4.95 Continue Reading

  • Campus Debit Card Trap Unveiled

    U.S. PIRG recently released an in-depth report, “The Campus Debit Card Trap,” on banks and companies who are in the business of disbursing federal student aid money on debit and prepaid cards.   They looked at nearly 900 card partnerships between colleges and banks and financial firms which impacts over 9 million students, or over Continue Reading

  • Suze Orman’s Prepaid Card: What is in the fine print

    There has been a lot of buzz around Suze Orman’s new prepaid card.  However, a prepaid card is still just a prepaid card and consumers should pay attention to the fine print. Here are some  take-aways after looking at the fine print of Suze Orman’s new prepaid card: Fee Summary: Monthly fee $3 (first month Continue Reading

  • College Students Raise Concerns About Higher One Card Fees

    A small group of students and parents at Western Washington University are taking their consumer rights seriously.

  • Great New Coverage On Our Prepaid Card Campaign

    Watch the video “ConsumerWatch: Prepaid Reloadable Cards May Come With Fees” featuring our own Michael McCauley

  • New “Club América” Prepaid Card Takes Aim at Soccer Fans

    A new prepaid card endorsed by the Club América soccer team is being marketed to soccer fans in the U.S. Goal…or foul?

  • The Kardashian Kard May Be a Goner – After Only 3 Weeks!

    The Kardashian sisters are backing out of their contract to promote their prepaid “kard,” after receiving massive criticism in the media and a warning from a state attorney general. Looks like not all publicity is good publicity!

  • Don’t Try “Keeping Up” with the Kardashians’ New Prepaid Card

    Consumers Union has looked at the new Kardashian Kard, and finds that the card comes with the same gotcha fees and weak consumer protections as other prepaid cards on the market.

  • Look Out for This One: The New, Expensive “Mi Promesa” Prepaid Card

    The new “Mi Promesa” prepaid card is being marketed to the Latino community as a new product that will serve their needs better than a traditional bank. But consumers need to know that this card comes with a hefty price tag and some outrageous fees.

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