Call 11 For Action: Prepaid debit cards can come with extra fees - News, Weather, Sports, Toledo, OH

Call 11 For Action: Prepaid debit cards can come with additional fees

(WTOL) – Prepaid debit cards are becoming more popular as people shop more online. Before buying, be careful of paying extra fees.

Prepaid debit cards are aimed at Americans who do not have a bank account, cannot get a bank account, or do not want a bank account.

Users load money onto the card and pay transactions online or in stores, similar to a regular debit or credit card. However, some of the cards have drawn criticism for associated fees that can decrease balances.

"The primary downside of prepaid cards are the fees and while the fees themselves are very modest, in isolation, it's the fact that they can mount quickly, in the course of just traditional financial transactions," explained Greg McBride, Chartered Financial Analyst of Bank Rate.

This can include fees for opening the card, loading funds on the card, making ATM withdrawals, or even monthly and yearly fees for just holding the card. These fees make it critical for consumers to understand the terms of the card.

"The smaller the print, the more important the words. That's where you're really going to find if this is really a fit for you. You really have to be dialed into what the fees are, what's going to trigger those fees, and what you need to do to avoid them," McBride said.

Consumers are advised to consider the services needed in a prepaid card, whether it is being able to call customer service or receive a monthly paper statement. Make sure there are no extra costs attached.

Copyright 2012 WTOL. All Rights Reserved.

Powered by Frankly