Credit Cards

Review: The American Express Prepaid Card

Comments 9 Comments

The American Express Prepaid Card card launched last summer to much fanfare. And on the surface it looks pretty good, especially for young professionals without access to traditional credit.

But you know how I love to dig deep below the surface, so let’s take a close look at this prepaid card and see what’s there. First, the good news.

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What’s good

The only official fee is $2 per month for each ATM withdrawal. You even get the first withdrawal per month free. You don’t have direct deposit, though, so the one-fee-only claim does need an asterisk because you might have to pay a load fee if you use a Green Dot MoneyPak. I’ll get into details about that in the “What’s Missing” section below.

Still, it’s good that there’s no monthly maintenance fee, inactivity fee, activation fee, or other fees to eat into your funds.

You get benefits you don’t normally get with a prepaid card and this is one way American Express is setting its card apart from the rest. You get purchase protection, fraud protection, and access to discounts and special offers. You also get roadside assistance, but the cardholder is responsible for paying all the expenses associated with the emergency assistance. But you do get assistance tracking down help and that’s useful.

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In fact, you get 24-hour customer service. This is a good perk for a prepaid card. You’d be amazed at how many cards require you to pay each time you speak with a customer service representative.

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What’s interesting

American Express is promoting Make Your Move in association with the prepaid card. If you use your prepaid card responsibly, you might be invited to apply for an AmEx charge card. I’m not really sure how you use a prepaid card irresponsibly since you can only spend the money you have. I guess if you keep a balance so low that you can’t pay your fees, that’s a problem.

Clearly, AmEx is appealing to the young professional with limited credit. But if this is your situation, I suggest you get a secured credit card that reports to the major credit bureaus and use it for 12 to 18 months. This is the most efficient way to build credit.

But I do like the attempt to move people into the mainstream banking system. I’ll give AmEx props for being honest about this program. You may or may not be invited to apply for a charge card. And even if you are, you might get turned down. If you’re just hankering for an American Express charge card, though, this is one path to explore.

[Related Article: What are the pros and cons of prepaid debit cards?]

What’s missing

There are two things this card lacks. The first one is direct deposit. Without direct deposit, you’ll have to use a Green Dot MoneyPak to load your money. Now, your other option is to add funds to your card via another AmEx credit or charge card or via your bank account. But why are you using a prepaid card if you have an AmEx card or a bank account?

The second problem is the lack of a bill pay feature. People who use prepaid cards as a substitute bank account are generally looking for both direct deposit and a bill pay feature.

What’s the bottom line?

If you’re unbanked, this is one of the few prepaid cards that I’d recommend because of the minimum amount of fees. If you can work around the lack of direct deposit or bill pay, this is a low-cost prepaid option. Just remember that if you use a Green Dot MoneyPak, you’ll pay $4.95 per load. The single load maximum for the card is $500. Make the most of your $4.95 and load up to the limit if you can.

But if you try to use this card as a substitute checking account and have to load money every week, that’s almost $20 a month. Plus, the maximum allowed on the account at any one time is $2,500.

There’s another use for this card, though. I think this card is a decent option for giving allowances to kids up to around age 15. You can transfer funds from your bank account to their prepaid card. The only fees would be if your teen went crazy at the ATM machine. It might be a good way to get them used to plastic. Once they get a checking account, you can transition them to a debit card that’s linked to their account.

Disclaimer: This content is not provided or commissioned by American Express. Opinions expressed here are author’s alone, not those of American Express, and have not been reviewed, approved or otherwise endorsed by American Express. At publishing time, the American Express Prepaid Card is offered on Credit.com product pages and Credit.com may be compensated if our users apply for and ultimately sign up for these cards through the American Express Affiliate Program. However, this relationship does not result in any preferential editorial treatment. 

Disclaimer: This content is not provided or commissioned by American Express. Opinions expressed here are author’s alone, not those of American Express, and have not been reviewed, approved or otherwise endorsed by American Express. This site may be compensated through American Express Affiliate Program.

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  • Bob

    No research what so ever. I you bothered to read the terms & conditions before you wrote this rather than parrot some other blogs you would know they have added direct deposit.

    If you looked at the website you’d know they also have started their own reload network called ‘Feeder Paks’ it’s $1 to load $100.

    Commonsense should tell you that since they don’t own any ATMs and have no agreement with Allpoint or MoneyPass etc etc that every ATM withdrawal will have a surcharge.

    The terms also show a $2,500 28 day load limit whether by cash or direct deposit and the ATM withdrawal limit is $200 a WEEK.

    http://bit.ly/wfH3C0

    When they came out with their Bluebird card they merged the terms and conditions for both cards.

    https://bluebirdmoney.com/

    The American Express for Target prepaid card has a $5,000 load limit for 28 days but is only reloadable at Target. I believe up to $1,100 for $3. They are trying to compete somewhat with Walmarts Moneycard there.

    • Beverly Blair Harzog

      Hi Bob–Thanks for your comment. The card I’m reviewing here is the AmEx Prepaid Card, which is a separate card from the AmEx Bluebird. If you’ll check out the terms and conditions for the specific card I reviewed, you’ll see that the details I list are correct.

      I do like the Bluebird card, so thanks for bringing that to my attention. I’m putting that card on my review list. AmEx is really expanding their prepaid offerings.

  • Daniel

    I just had a conversation after getting (and receiving) the Prepaid card for someone about reloading from an AMEX. I didn’t fund it on purchase and went to fund it tonight and an AMEX card was not an option. I called and was told that there are 3 ways: 1) Direct Deposit, 2) ACH and 3) Money Pak. This information matches the website. They apparently took away the option to fund from an AMEX, though I’m not sure why.

    From all the forums and their site, I thought it could be funded from another card. I guess not, so I’ll be funding it out of cash.

    Do you have any other information?

    Thanks
    Daniel

    • Beverly Blair Harzog

      Hi Daniel–I asked AmEx about funding from another AmEx card and that option was just eliminated. Thanks for pointing that out. It’s a shame, too, because that made it easy–and cheap!–to fund the prepaid card.

      This particular AmEx prepaid card can’t be funded via direct deposit, which is a feature it needs. You can fund it via another bank account (checking, savings) or with cash using a MoneyPak. The AmEx Bluebird allows direct deposit, though. Check out the bluebird card here: https://bluebirdmoney.com/.

  • Marc

    Within the past few days Amex has added direct deposit feature to their prepaid card. I have the prepaid card and when I logged in a few days ago, I noticed the direct deposit feature. It seems like they’re beinning to merge the features of the Bluebird and prepaid card. I still have not yet seen any mention of the feeder pack for the prepaid card. I’m guessing that will be rolling out shortly. One new feature that was added that’s intriguing is “Make Your Move” in which you establish a history with Amex using your prepaid card with the possibility of being invited to apply for a charge card in the future. My only knock on the card is the 5 business days it takes for funds to get loaded on the card if the funding source is either a checking or savings account.

    • Marc

      Can anyone explain why it takes up 5 business (for me it always takes 5 business days) days for funds to get loaded to the card when funding via checking/savings acct? It seems like once funds are debited from the checking/savings acct they should post t the card the the next business day. Seems a little questionable.

  • Mary Wilson

    AMEX prepaid did NOT hold its promise – NOT A GOOD WAY TO KEEP CUSTOMER

  • Greg

    Over the last 2 months, I had to call their “customer service” call center 12 different times. Every time I called, I had to wait on hold more than 30 mins before a rep even answered my call, and everyone gave me a different “answer!” They would just tell me what they thought i wanted to hear and not what the real truth was.

    It has been over 2 months and I have yet to see a card!! WORST situation I have ever been in, by far!!

  • josh

    Can someone please let me know if the amex prepaid website is having a problem I have literally been trying to reach someone for almost 2 Weeks via internet and phone I just received this card and wanted to register it however the amex official site continues to give me an error message, I tried calling customer service and my wait time is always ten minutes but I end up waiting 3 hours with still no answer, its crazy, any help?

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