PrePaid Credit Cards

Posted on November 18, 2009
Filed Under Finances, budget, debt | 5 Comments

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I have to confess that not having a credit card is a MAJOR inconvenience. There are times when it is almost impossible to purchase something without it especially since I do so much business online. When I order bulk supplies, it is much less expensive to purchase online and many merchants do not accept Paypal. Over the last week, I have been researching prepaid credit cards.

My Dream Card

I have made up the following wish list for my dream card. I don’t expect to get it free but I would like it to be reasonable:

Reasonable activation fee of under $20
No dormancy fees
Pay some kind of interest on my money
No fees for purchases
Reasonable fees for atm withdrawals ($1 or less)
Free Online Balance Check
No monthly fees

Is this asking too much? There are a few cards that come close but none meet all of my requirements so I have been making comparisons. They are very confusing and the card that might be the best for my spending habits (occasional transactions) might not be best for everyone. If you plan on using the card several times per month, you might be better off choosing one that has a small monthly fee and free transactions.

Because Walmart has put their money card on sale I thought I would use it as an example. I honestly was somewhat skeptical about the monthly fees but after much research I have found that they are probably the best value. All transactions are free except atm transactions. The only way that I have found to get around atm transaction fees is to use your bank card at your own bank and that is not always free.

This is what is posted on Walmart’s cardholder agreement:

Standard Fees
One-time Temporary Card Issuance Fee at Walmart Store
- Standard Walmart MoneyCard	$3.00
- Student Edition Walmart MoneyCard	$6.00

Reload Personalized Card at Walmart (No Check Cashing)	$3.00

Reload Personalized Card at Walmart (Check Cashing)	$0.00

Reload Personalized Card at Green Dot	Varies by Retailer
Location (other than Walmart store)

Additional Personalized Card Fee
- Standard Walmart MoneyCard	$3.00
- Student Edition Walmart MoneyCard	$0.00

Standard Fees
- ATM Cash Transaction – Domestic	$2.00

ATM Cash Transaction – International	$2.00

ATM Balance Inquiry	$1.00

POS Cash Back	$0.00

Walmart POS Balance Inquiry	$0.00

IVR (Automatic Telephone System) Balance Inquiry	$0.00

Monthly Maintenance Fee	$3.00

Operator Assisted Call	$0.00

Teller Cash Transaction	$2.00

Standard Fees
Lost/Stolen Replacement Personalized Card	$3.00

PIN Debit Purchase	$0.00

Signature Debit Purchase	$0.00

Stop Payment Order Fee (see section 7)	$0.00

Negative Balance Fee	$0.00

Rush Delivery of Personalized Card	$20.00

Foreign Transactions (see section 19)	2%

In contrast, here are some of the fees from another highly advertised prepaid credit card:
This is the NetSpend Prepaid Card as shown on another website:

Pay-As-You-Go Customers
Signature Purchase Convenience Fee	$1.00
PIN Purchase Convenience Fee	$2.00
Card Fulfillment (Shipping & Handling)	$9.95
Fee Advantage Customers
Monthly Service Fee	$9.95, billed on cardholder’s cycle date
Signature Purchase Convenience Fee	FREE
PIN Purchase Convenience Fee	FREE
Card Fulfillment (Shipping & Handling)	$9.95
Other Fees
Adding or withdrawing funds to your account at local distributors	Convenience fee determined by distributor
Account-to-Account Transfer — Via Internet	FREE
Account-to-Account Transfer — Via Toll Free Number	$4.95
Non-Monetary Transactions — Via Internet	FREE
Non-Monetary Transactions — Via Toll Free Number	Up to $0.50
Non-Monetary Transactions — at ATM	Up to $0.50
Account Maintenance (waived if account has debit or credit transaction and/or balance inquiry within 90 days)	$5.95 per month
Check or Additional Statement Mailing Fee	$5.95
Domestic ATM Cash Withdrawal / Cash Withdrawal at Distributor	Up to $2.50 per withdrawal, plus ATM owner fees, if any
ATM Decline Fee	Up to $1.00 per declined withdrawal
International ATM Cash Withdrawal	$4.95 per withdrawal plus ATM owner fees, if any
Lost or Stolen Card Replacement Fee	Up to $9.95

Altogether though these fees may be considerably less than you are spending on your current credit card every month. These fees are subject to change so if you are considering a prepaid credit card make sure that you read the small print and search for the best deal.

If you have any better deals on prepaid cards, I’d love to hear from you. I am specifically searching for one that pays interest on the available balance.

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Comments

5 Responses to “PrePaid Credit Cards”

Jenn (2 comments.) on November 18th, 2009 11:11 am

Have you looked into getting the debit card from PayPal? You can use it to access your PayPal account anywhere Visa is accepted.
cindys on November 18th, 2009 11:17 am

Jenn, I used to have a Pay Pal debit card but it expired and I can’t renew it because they require a credit card to verify the account. I am caught in the middle.
Pev (1 comments.) on November 18th, 2009 9:10 pm

I know exactly how you feel. I mostly use my atm/debit card but I think it’s time to get a real credit card now. Please let us know which one you decide to get. It seems like you’ve analyzed everything in-depth! Good luck!
Mickey (1 comments.) on December 22nd, 2009 9:25 am

Well, this credit card could be useful but not in Poland where I live. We don’t have to pay anything to have credit cards.
I have one card to pay online only and a visa to buy stuff.
Charlie Gibson (1 comments.) on December 22nd, 2009 10:28 am

For cardholders is very important to know how to consolidate credit card debt. Consolidation is perfect for those who are looking to better their credit for the future. There are many advantages for cardholders that take advantage of credit card debt consolidation.