Many are turning to prepaid debit cards as bank fees escalate
As bank fees escalate, many are now turning to prepaid debit cards to stay away from the hiked up fees. Now prepaid debit cards have become the most preferred mode of payment, especially since the last few years. Earlier this week, AmEx became the first major financial company to offer the prepaid debit card.
But the complex fee schedules are another stumbling block for most cards. The other problems are related to the consumer protections to credit card customers and the building of credit history.
Now the prepaid card issuers are being investigated at least in one state. There is also rising concerns among consumer advocates who want more oversight. When the Consumer Financial Protection Bureau is launched in July, it will step up the oversight of this industry.
Suzanne Martindale who is the staff attorney at Consumers Union states that prepaid cards are currently being used by people as checking accounts. Hence the government should ideally regulate it accordingly. The non-profit group has always been concerned about the fees on these prepaid cards which are quite unfair.
According to the recent data that is available from the Fed Reserve, Americans have paid close to $140 billion for using their prepaid cards during 2009. This is a 21.5% hike every year since the last four years. As per reports from Mercator Advisory Group, the amount of cash that is loaded onto the prepaid cards is likely to increase to $552 billion by 2012, while it was only $330 million about three years ago.