In addition to consumers, many governmental benefits are shifting towards payment via prepaid cards and some employers now offer prepaid cards instead of traditional payroll checks.
“Prepaid credit cards can provide convenience and safety, but these advantages can be quickly eroded by high fees. Many prepaid cards come with significant charges—fees to sign up, deposit money, check a balance, use an ATM, and cancel the account,” the report said. “Because the disclosure of fees varies from card to card—many are hidden altogether—consumers have difficulty knowing what their costs will be, let alone comparison shopping”, the report said.
CRL urges continued state and federal enforcements and strong defense of both the CFPB and the Credit CARD Act. For prepaid cards, CRL will analyze credit features, mandatory arbitration and the effect of overdraft fees.
(Charlene Crowell is a communications manager with the Center for Responsible Lending. She can be reached at: Charlene.email@example.com.)