Youngsters Help Fast Increase in Prepaid Debit Cards Usage
It is reported that $201.9 billion could be expected to be loaded onto prepaid debit cards in 2010 and the question is being asked, whether this rapid growth, could be considered a good trend!
Research conducted shows that at least 13% of households in the United States have prepaid debit cards, and they are especially popular among the younger generation. They are accompanied in the user stakes by those people who cannot access, or do not want traditional banking products.
The demands for prepaid debit cards are influenced by features that equal of surpass those of many checking accounts. They are particularly useful and convenient for people on the move and provide the management facility from a mobile device or the social media account. In addition, users are able to build a financial credit related history, apply direct transfers, and operate in a market that is in many instances neglected by financial products providers.
This seemingly is a positive aspect and a recommendation for the use of prepaid debit cards. However, as with most aspects of finance related subjects, there is also a downside. Another report, this one from Consumer Action and included various warnings to the unaware.
In some instances, users of prepaid credit cards must pay for:-
- Calls to customer service
- Inactivity fees, for non-usage of card
- Loading money onto the card
- Using an ATM
- Declined transaction
There are reportedly other charges involved, which can add up to a significant sum of money. Another aspect to consider, relates to FDIC insurance. Should your funds not be held by an FDIC insured institution and the insurer of your card goes bankrupt, you only need one guess as to who will lose their money!
In the event of a dispute with your card insurer, there is not a recognized authority to help you. This is added to, by there being no legal obligation for an insurer to disclose any fees upfront. If you lose your card, or it is stolen, any help provided by the insurer is voluntary, but otherwise there is no statutory protection.
Those are basically the two sides of the coin, but fortunately, there are some well established and reputable providers offering good prepaid debt cards. Keep in mind that as with selecting any credit card, service or product, compare the various options offered to you and read the small print!