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Beware hidden fees on prepaid debit cards

Credit and debit cards seen on April 25,

Credit and debit cards seen on April 25, 2013. Prepaid cards are handy, but card fees can be complex. Credit: AP / Patrick Semansky

Prepaid debit cards can be a convenience, but at what cost? New research from found that 70 percent of the cards are hiding fees.

American Express Bluebird, American Express Serve and Green Dot Visa Gold were the only cards analyzed that met the proposed disclosure guidelines set forth by the Consumer Financial Protection Bureau. The CFPB says prepaid debit cards should list 13 fees on their packaging.

Prepaid cards are handy, but card fees can be complex. You expect the “monthly” fee, but how about these: ATM withdrawal non-network fee, cash reload fee, ATM balance inquiry fee, inactivity fee, additional card or lost card fee, foreign transaction fee, and paper statement fee? The list goes on.

“Ever heard of death by a thousand cuts? Some prepaid cards kill you with a long list of fees. Each by itself might be small, but add them up and they can kill you,” says Howard Dvorkin, founder of “Before you know it you’re out of $50.”

Read the fine print. Knowing the details of a card’s fee structure can make a big difference. According to, a user with Green Dot Visa Gold making 20 purchases a month, four ATM withdrawals and four cash reloads could pay as much as $35.75 in fees. But knowing how the fees work, the same user could cut the cost to $5.95, the amount of the monthly service fee. Even that fee could disappear with direct deposit of a paycheck, bringing the monthly cost to zero.

Reading the fine print is tedious, but says Dvorkin, “If it takes 30 minutes, you earned more than a dollar a minute.”

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