Prepaid Visa or Mastercard debit cards provide a great alternative to credit cards and carrying lots of cash around. Sounds great, load your card with a predetermined amount of money and you can’t get yourself into trouble.
But they don’t come without strings attached as many customers of the largest prepaid debit card company, GreenDot, complain about high fees and accuse the company of hiding them. Examples include a $6.95 activation fee that comes off their balance along with monthly fees for those with balances under $1000.
Customers even have had trouble with balances on their card. A GreenDot customer in Colorado recently made two deposits on his card just to find the second deposit didn’t even make it. He and the store where the transaction took place have had endless problems in trying to sort the issue out with GreenDot.
After researching the company online, the customer found out about a class action lawsuit he’s considering joining.
Read the fine print of these cards and be sure you understand all of the charges before signing up. Prepaid debit cards can certainly be very beneficial to individuals – providing a check on their spending. But since they’re so unregulated, it’s easy for them to hide charges and fees that will end up costing you a lot of money.