Prepaid cards have entered the mainstream, many providing convenience and functionality that come close to that of checking accounts.
Consumer Reports has rated 26 prepaid in four categories: value, convenience, safety and fee accessibility, and clarity.
The best prepaid cards score well in each of these categories. They have few types of fees, and offer consumers opportunities to avoid fees. Each is safe to use, carrying FDIC insurance to the individual cardholder.
Here are the top five cards, according to Consumer Reports:
» Bluebird with direct deposit (American Express)
» H&R Block Emerald Prepaid MasterCard
» Green Dot Card (Green Dot Bank)
» Approved Prepaid MasterCard (Suze Orman) with direct deposit
» Approved Prepaid MasterCard (Suze Orman) without direct deposit
All of the worst cards have high, unavoidable fees, including activation and monthly fees. Consumers likely won’t be able to find or full understand what those fees are.
These are the bottom four cards:
- AccountNow Gold Visa Prepaid Card (MetaBank)
- Reach Visa Prepaid Card (Tom Joyner)
- Redpack Mi Promesa Prepaid MasterCard
- American Express for Target
Consumer Reports warns prepaid card shoppers to carefully review the fine print. While all prepaid cards in the CR survey claim to offer some form of loss or fraud and recredit policy, these protections are often vaguely defined.
“Consumer protections for prepaid cards are not yet on par with debit cards linked to bank accounts,” CR reports. “Without them, consumers, who rely on prepaid cards to purchase everyday necessities for important individual and household uses, are left vulnerable to losing these valuable funds.”
Here’s the full report.