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Prepaid Debit Card Fees

Prepaid debit cards are debit cards that can be purchased online or through local merchants and "pre-loaded" with a set amount of money. However, some consumers have complained about hidden prepaid debit card fees. They say they were not adequately warned that they would be charged high debit card fees. Such fees include an activation fee and monthly debit card fees.

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Green Dot Visa And Prepaid Debit Card Fees

A prepaid debit card differs from a credit card: with a prepaid debit card, the consumer deposits, or loads, money on the card when the card is purchased. Prepaid debit cards can be reloadable, meaning that if their balance is depleted, the cardholder has the option to add more money to the value of the card and keep the same prepaid debit card number.

Prepaid Debit CardHowever, prepaid debit cards can carry high fees and consumers say they were not adequately warned about those fees. For example, consumers were often charged an activation fee that was taken off the value of the card as soon as the card was activated, without the consumer's knowledge of the fee.

Many prepaid debit card users are low-income earners or new immigrants who are unable to open a bank account or be approved for a credit card. About 80 million Americans have little or no interaction with a bank and the prepaid debit card industry is targeting these consumers.

The industry says they operate on small margins and make it up in volume, but in so doing, they "nickel and dime" the consumer. Unfortunately for most frustrated customers, the prepaid card has proven to be a more expensive way to bank.

Green Dot Visa

Green Dot is one of the biggest providers of prepaid debit cards. It claims that consumers "can count on us to be there for you" but many of its customers complain of poor customer service and Green Dot fees they didn't realize they would be incurring.5

Although financial industry officials say their prepaid card user fees are declining, they cost substantially more than bank charges. Green Dot fees, including point-of-sale transactions, can cost upwards of $30 per month. Some customers have complained that they have deposited funds into their account but can't access their money. Meanwhile, monthly fees continue to be withdrawn from their account.

Green Dot Fees

As listed on the Green Dot website fee schedule:
  • Initial Purchase: Varies by retailer, from $4.95 to $6.95
  • Monthly Charge: Waived in any monthly billing cycle when you load at least $1,000 to your card or make 30 purchase transactions, otherwise, $5.95.
  • ATM Withdrawal: free at participating ATM's, otherwise $2.50 per withdrawal.
  • Teller Cash Advance: $2.50
  • ATM Declined Withdrawal: $0.50
  • ATM Balance Inquiry: $0.50
  • Lost/Stolen Card Replacement: $6.00
Other Prepaid Debit Card Companies

Green Dot is not the only company alleged to have not adequately warned consumers about the fees associated with the prepaid debit cards. The New York Times (October 6, 2009) conducted an investigation into high fees that consumers may or may not have been aware of that were charged by prepaid debit companies. The following prepaid debit cards were mentioned in that article:
  • Green Dot Visa Prepaid Card
  • MiCash Prepaid MasterCard
  • Millennium Advantage Prepaid MasterCard
  • Silver Prepaid MasterCard
  • Only 1 Visa prepaid card
  • Wal-Mart Money Card
  • Vision Premier Prepaid Visa Card
There may be consumers who used cards by other companies not mentioned in this list who feel they were not adequately warned about the fees associated with their cards. Consumers who used prepaid debit cards from any company may be able to file a complaint if they were not adequately warned about fees they would be charged for using those debit cards.

As part of the credit card legislation, which was enacted in spring, 2008, Congress has asked federal regulators to investigate pre-paid cards and report back by next February. So far this relatively new industry has avoided regulatory oversight that could give added protection to customers. Until that time, consumers may want to seek legal help.

Prepaid Debit Card Fees Legal Help

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PREPAID DEBIT CARD LEGAL ARTICLES AND INTERVIEWS

Students Get a Break, But Prepaid Debit Card Fees Still an Aggravation
Students Get a Break, But Prepaid Debit Card Fees Still an Aggravation Atlanta, GA The world of consumer credit finance has exploded in recent years with the advent of prepaid debit cards such as the Green Dot Visa—a market segment known as "the underbanked" that is being courted more and more. Amy Errett, a partner with the venture capital and private equity firm Maveron LLC, writes in the 5/5/10 issue of VentureBeat, "The notion of focusing on underbanked consumers through prepaid debit cards and college students as interesting demographics for massive growth is innovative. The idea didn't come from traditional bankers, but rather from entrepreneurs who identified massive consumer opportunities. There will be more of that and it will happen quickly. [READ MORE]

Idaho Convenience Stores Claim Debit Card Fees Are Stealing Their Business
Idaho Convenience Stores Claim Debit Card Fees Are Stealing Their Business Boise, ID After a meeting with several convenience store owners, Idaho Senator Mike Crapo vowed to look into problems related to fees and charges from the usage of regular and prepaid debit cards [READ MORE]

New Government Crackdown on Credit Cards Won't Help Debit Card Fees
New Government Crackdown on Credit Cards Won't Help Debit Card Fees New York, NY In May Congress passed new legislation that comes into effect this weekend, aimed at ending unfair rate increases and hidden fees associated with prepaid debit cards. "It's still going to be important to watch your statement as closely as possible," says Joe Ridout, spokesman for Consumer Action, an advocacy group, in comments published in the 2/14/10 edition of the Oregonian. But "there will be changes. [READ MORE]



READER COMMENTS

Posted by
paul
on
Green Dot fees are outrageous. I was given the GreenDot Visa debit card as a gift with $50 on it. Not only was the purchaser charged $5 but the fee to use the card is $10. Why would anyone use a card like this unless they dont have a bank account. Additionally, to use the money on the card it has to be registered online and there is an ongoing monthly $10 fee unless you put $1000 in the account.

Posted by
Christina greely
on
How much does green dot take out momthly

Posted by
Crystal. Williams
on
I cant activate card sent through the mail but my paycheck has been deposited to this account the numbers on my card are invalid almost like a scam its asking for ssn and i didn't need it to order card every number require a valid card number to contact customer support need my paycheck this is ridiculous

Posted by
Jillian young
on
I have a question about the card. I received a monthly charge of $9.95 dollars. I'm not sure why? When I first signed up for the card it said no fees , why is this happening and how do I get rid of it?

Posted by
pg
on
Can you help answer a question for me. I have a Green Dot prepaid Visa card that was given to me as a gift. I misplaced the card several years ago and contacted the company. The card was blocked or inaccessible when I tried to look it up online. When I finally reached someone I was told the money had been turned over to the state of California and I needed to fill out an assheetment form to get the funds back. I was told by several agents for the bank that I would be sent the form - which never came. I kept calling and calling and everyone told me the same thing but I never received anything. I then found an email address and sent a message. i received an email that said fees had been applied over the period of time and now the balance was 0 and that was the reason i never received the form to send in -- she said the funds were not sent to the state of california. i do not understand this kind of customer service from a bank and from Walmart. this is totally wrong. i thought this is against the law to access fees like this to the prepaid cards. Can I get any help on this? Please answer. Thanks very much.

Posted by
Rodney Mims
on
My card it blocked and Iv not been able to talk to a live person

Posted by
California
on
I got 2 prepaid debit cards for $10 each from Citibank for enrolling in their Credit protector program. The expiry date printed on the card is 12/09. But when I tried to use it I was told there is no balance. I called the customer service and was told there is no balance because it was reduced by the service fees. Bottom line is I lost $20. Isn't there a law in California that restricts such fees?

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