The bombardment of fees from traditional banks may drive some consumers toward the financials services of a major retailer, which will likely end up being a costly move.

Many Americans have found new homes for their money ranging from online banks, community banks, and credit unions, following the consumer movement sparked by Bank Transfer Day.

But, a small part of that group may have opted to join the underbanked population by conducting their finances through major retailers such as Walmart.

Walmart offers a host of financial services that would make it a formidable competitor to banks, especially since the retailer receives such immense traffic. Most Walmart shoppers visit the store more than they visit their banks.

Walmart’s Price Tag on Traditional Banking Services

For a typical consumer who wants to replace their pricey checking accounts, Walmart’s MoneyCard — a prepaid Visa or MasterCard debit card with a monthly service fee of $3 — fills that role.

Reloading the card with direct deposit or an online bank transfer is free. Deposits of cash will incur a $3 reload fee. Cashing pre-printed payroll and government checks will not trigger a reload fee but a check-cashing fee of $3 is applied.

The MoneyCard acts as any other regular debit card, which can be used to swipe for purchases and withdraw cash at ATMs. Every ATM cash transaction will cost $2.

For Better

A major selling point for the MoneyCard is no overdraft fees since customers cannot spend what they don’t have. Furthermore, prepaid debit cards require no credit check or banking history check — negative marks may result in denied applications for financial accounts.

The card has a zero liability policy that protects against unauthorized purchases, fraud and theft of the card if it is lost or stolen.

If it can be considered a benefit of “banking” with Walmart, it is a way to send a message to profit-hungry financial institutions — mistreated consumers can and will move their money.

For Worse

Unfortunately, the MoneyCard account does not offer online bill pay, which many consumers have relied on to automate their bill payments.

Other shortcomings include the lack of comprehensive online and mobile banking. Walmart offers limited options on that front. MoneyCard users can budget and track spending online and set email and mobile alerts.

It is a far cry from the advanced personal financial management tools and mobile applications available from banks.

Down to the Money

Given the choice of a big bank or Walmart’s MoneyCard, the bank would probably win out from a strictly penny-pinching perspective.

The average monthly fee (that can be waived with a minimum balance) for a non-interest checking account at the 10 largest U.S. banks is $10.44, according to a recent study by

A MoneyCard user who cashes one check and makes one ATM cash withdrawal per month is already forking over $8 per month in fees. For a few more dollars, this user could enjoy many other benefits offered by a bank.

Community banks, online banks, and credit unions often have free checking with products and services that expand beyond the reach of Walmart.

So, Walmart’s MoneyCard remains a viable alternative to those with bad histories with banks, but it’s not the smartest choice (financially) to anyone who can qualify for an account at a financial institution.

Follow Simon in the Community and on Twitter: @simonzhen.

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  • Sunk818

    I guess I’m not understanding why you couldn’t get a checking account with no overdraft “protection”. Either that consumer is ignorant or ran up some bad debt they didn’t pay for.

    • Anonymous

      Banks do not offer accounts with a complete ‘opt out’ from overdraft. The ‘opt out’ only applies to ATM transactions and debit transactions.

      • Sunk818

        That’s not been my experience. Whether pin or signature, if I don’t have the amount available the transaction is denied.

        • Simon Zhen

          As AnalyzeThis said, the Federal Reserve does not enforce overdraft opt-in rules for written checks and recurring bill payments.

          They do apply to everyday debit card transactions (regardless of PIN or signature) and ATM transactions. So, if you don’t opt in, debit card purchases and ATM withdrawals will be denied if they sent your account into a negative balance.

          • Sun W. Kim

            Oh, I see. So, there is no way for me to bounce a check vs overdraft “protection” for that check? The only remedy would be to close the checking account before hand?

            I also did not think we were talking about paper checks earlier because the whole article was about debit cards.

            • Anonymous

              Banks also do not offer 100% overdraft protection for debit signature transactions. Several banks have told me that merchants can ‘force’ a transaction through causing overdraft.

              • Sun W. Kim

                Interesting… Whenever I try to buy something via debit signature and my account does not have enough, I have either received a decline, or a partial approval (for whatever amount I do have) and have to pay the rest a different way.

                • Anonymous

                  3 Banks have told me this in three separate conversations but according to them it’s the merchant who can ‘force’ the purchase.

                  Mind you that it’s run through my head that the bank can allow the transaction just to have the overdraft fee.  They have a tendency to lie ‘as directed’.

                  When Bank of America took 14 weekend signature transactions of mine and made them all bounce based on a payment the following Thursday when I was double ach’d by AT&T they told me they have NO control over the  order of the transactions and that they could not stop overdrafts. 15 x $35 = $525.

                  They lied.

  • Anonymous

    MoneyCard will have free ATM usage next year on the MoneyPass ATM network. GreenDot came out with that during their 3rd quarter call. The $3 monthly fee is waived when depositing $1,000 or more during the month.

    There are several prepaid options better than the MoneyCard and some of those are from Banks.

    The US Bank Convenient Cash Card, Regions Bank Now Card, the MoneyManager Card, etc.

    One overdraft is $35 with many banks and banks are charging people who cash their customers checks but do not have an account. Citizens charges $7 and I believe Bank of America charges $3. 

    • Simon Zhen

      Surely, banks are dipping their hands into the prepaid market now after the new debit swipe fee rules have left them looking for more revenue. I feel that the big banks will always have an edge over prepaid-only companies because they already have the infrastructure in place.

      However, those who prefer not to feed so-called “fat cat” bankers may continue to use options such as the MoneyCard – simply “voting with their money”.

      • Anonymous

        The Durbin rules will not apply to smaller banks nor prepaid cards. Banks that do not come out with prepaid cards as US Bank and Regions have done will face stiff competition as prepaid cards start rolling out rewards and cash back programs.

        The better prepaid cards will not only survive but will flourish.  Green Dot at some point will offer savings accounts and remote check deposit closing the gap between them and the banks. Geography is one advantage of the prepaid companies. Banks ignore some areas. They also block those that have been reported to Chex and EWS.

        Depositing cash at a branch is the one single positive that banks will continue to have now and in the future. The least expensive prepaid cash deposit cost I am aware of is $2 for a MoneyNetwork card at a 7-Eleven.

        Amazingly both Regions and BB&T (which has also has a new prepaid product) deny customers that have been reported to EWS even though there is no chance of overdraft with these products.

        • Sun W. Kim

          Once remote deposit with a smartphone is more widely deployed, having a local branch will not be as relevant. You also have banks like PerkStreet that utilize UPS Store for depositing checks Overnight for free, as well as money transmission services like MoneyGram for free. There are ways to be “local” without having a local branch.

          • Anonymous

            USAA ‘easydeposit’ where they use UPS Stores to scan customer checks is the most innovative right now.  There is no waiting period or exclusion because the UPS Store is performing the scan although I have heard that larger checks are held for the first couple so they can see it’s normal.

            Fraud is a possibility with RDC.

            UpSide and at least one other prepaid besides Green Dot are also looking into RDC.

            You are right. Banking as we know it is being changed right before our eyes with remote deposit. I don’t think people yet realize just how earth shaking this is. Some podunk credit union can become a banking Goliath in the course of a few years by skinning the cat better than the big boys and nary a dime spent on B&M.

            It’s safer than putting a check into an envelope less ATM because the ATM can and has eaten checks whereas you can cancel the RDC if it’s not accepted and go cash it or deposit it normally.  People who say their checks were eaten have also said they have to wait up til 10 business days to resolve it.  10 business days would just wipe me out.

            • Sunk818

              Banks purposefully clear transactions from highest to lowest. This way, if a transaction does not clear… they have the rest of the transactions that get dinged for overdraft. One time, my Starbucks Latte cost me $43. $39 for the overdraft fee and $4 for the latte.

              • Anonymous

                It’s called ‘stacking’ and the banks to this day will deny they do or say they can’t stop doing it.

                For someone that opts out with the intent of stopping overdrafts they should at least minimize overdrafts rather than optimize them.

                Banks are the most unfriendly business’s in existence. They tell you how you want it.