Bankrate.com recently took at look at 18 of the most widely issued prepaid debit cards and found that all of them come with fees, some more than $20 a month.
Greg McBride is a senior financial analyst at Bankrate.com.
“Some were higher, some were lower, some had more fees, some had fewer fees. But, the one common theme throughout was in fact that they all had a fee of some kind. So it’s important for consumers to shop around and make sure that the card they’re getting is the one that’s going to present the lowest total cost for how they plan to use the card. And for most people, a low-cost or free checking account is still going to be your better alternative.”
McBride says prepaid debit cards are typically used by people who don’t have or can’t get a checking account or for parents sending kids off to college. He says as many as a third of U.S. households are currently unbanked or under-banked, making the prepaid cards an attractive option.