The use of prepaid cards is on the rise as banks and prepaid-card companies target the under- and unbanked portion of the American population. But consumers should watch for fees. Prepaid cards can end up costing a fortune if you use them actively, says Alex Matjanec, co-founder of MyBankTracker in an interview with CBS News.
Prepaid cards have struck a chord with consumers who want a debit card, but cannot qualify for a traditional checking account at a bank. They function like a regular debit card, allowing cardholders to make purchases at retailers and withdrawals at ATMs, without having to go through the usual application process — just pick one off the rack at your local drug store or supermarket.
While prepaid cards fill a need, consumers should be alerted to the fees that come with these cards — fees for monthly maintenance, ATM access and fund reloads.
Watch the CBS snippet video below, which was broadcast across several local television stations:
(We won’t hold anything against WUSA9 for incorrectly referring us to MyBankTrader.com.)