Home > Credit Cards > Prepaid Cards: How to Become a Fine Print Warrior

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Direct deposit: As just mentioned, this can be your ticket to avoiding a maintenance fee. But read the details because there’s often a dollar amount that’s required. For instance, you might have to deposit at least $1,500 per month to avoid the maintenance fee. If you’re able to use direct deposit, you can find a prepaid card that won’t charge a monthly maintenance fee.

Loading fees: If you’re new to all this, “loading” simply means putting money on your card. Prepaid cards do vary in the way they allow you to load money.

If you don’t have access to direct deposit or you choose a card that doesn’t offer direct deposit, you might end up having to pay loading fees. If you use a Green Dot MoneyPak, it will cost you around $4.50 per load. There might also be loading fees for transfers from a bank account, PayPal transfers and writing checks.

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Domestic ATM withdrawal: Usually ranges from $2 to $3; note that with some cards, ATM withdrawals might be free if you use an in-network ATM. You can usually find information about “in-network ATMs” on the card issuer’s website.

Foreign ATM transaction fee: These range from $3 to $4.95. A few cards do charge $4.95 so be aware of this fee if you travel overseas.

Foreign transaction fee: 2 percent to 3 percent

Balance inquiry: 50 cents to $3

Cancellation fee: From zero to $15. Yes, you can be charged for asking for your money back.

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Inactivity fee: Also called a “conditional” monthly fee. So far, I’ve seen fees ranging from $2 to $4.95 per month. The terms vary by card. I’ve seen card agreements that start charging you $4.95 per month if you don’t use your card for 60 days. I’ve also seen terms that don’t charge you until your card is inactive for 13 months. This is a relatively new “gotcha,” so watch out for it.

Think about this for a minute. This isn’t a credit card. So this issuer will charge you if you don’t spend your own money. I think it takes a lot of chutzpah (and not in a good way) to charge consumers for not spending their own money.

Other fees to look for in the fine print: Replacement cost for a lost/stolen card, second card fee, bank teller cash advance, ATM withdrawal decline, live customer service, paper statements, research and documentation fees (I’ve seen this as high as $50), expedited deposits, mobile text alerts, using an automated phone service (at least it’s usually cheaper than talking to a live person), express delivery charge, payment by check, and Bill Pay stop payment.

Okay, you get the idea, right? There could be anything in that fine print. I’ve found the ones that scream “No Hidden Fees!” are frequently the worst culprits.

In the false claims department…

Credit building feature: This isn’t a fee; it’s just an outrageous lie. Your own money is loaded onto your prepaid card. You’re not buying anything on credit. So even if a prepaid issuer claims it can raise your credit score, don’t believe it. I really, really hate it when issuers lie to consumers and give them false hope.

If you want to rebuild your credit, please check out secured credit cards. In most circumstances, you’ll get approved and if you use it responsibly, you’re on your way to a new and improved credit history. Again, the fine print is important. Be sure you confirm that the issuer reports to the major credit bureaus before you apply for a secured card. If they don’t report your payment to the major bureaus, you won’t get any benefit at all.

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