Fees and prepaid cards go together like bread and butter. But how high is too high?
In the US, the fastest growing payment method is the prepaid debit card. According to Businessweek, over 7 million were in circulation as of 2012.
That number seems somewhat low to me (relative to the 300+ million Americans) but regardless, one thing I’m confident of… there are a lot of people using them and that number just keeps getting bigger.
Lately the big banks have been hopping on the bandwagon, coming out with their own prepaid cards. The US Bank Convenient Cash Card is one of the latest entrants into the field, but how do the fees compare?
How much does it cost in 2013?
Here’s a review of the fee schedule. Starting with the most common fees which you will almost certainly encounter…
- $3.00 – Enrollment Fee
- $3.00 – Monthly Service Fee
Next, here are the fees which are avoidable, but you will encounter them if you’re not careful…
- $2.00 – Non U.S. Bank ATM Withdrawal
- $1.00 – Non U.S. Bank ATM Balance Inquiry/Decline
- $3.00 – Monthly Paper Statements (avoid by enrolling in online statements)
- $3.00 – Teller Withdrawal
- $2.00 – Per Call For Live Customer Service (first 2 calls each month are free)
- $15.00 – Card Replacement Fee
Lastly, here are the remaining fees which you are less likely to encounter, especially if you don’t travel internationally…
- $3.00 – International ATM Withdrawal
- $1.50 – International ATM Inquiry/Decline
- Up to 3% – Surcharge on Foreign Transactions
- $30 – Expedited Card Replacement
Even though there are a lot of fees, I think it’s safe to assume most won’t be applicable to you. There are no fees for non-PIN based transactions and purchases (like how you would pay with a credit card at a store). The only time you start getting in trouble with fees is when you are doing PIN-based transactions at non US Bank ATMs and the like.
So in a nutshell, if you use the Convenient Cash Card strategically and conduct all of your ATM transactions at US Bank locations, the minimum amount you pay will be $39 for the first year and $36 per year thereafter.
How does it compare?
When compared to the popular Rush Card and Mango Prepaid, the US Bank Convenient Cash Card fees are a bargain! However, the American Express Prepaid still beats it hands down:
So as you see, the American Express still reigns king of the prepaid world. But for those seeking a Visa or MasterCard, then this US Bank card offers one of the lowest fee structures around. It’s comparable to the Walmart Money Card and remains significantly cheaper than Chase’s Liquid, PNC’s SmartAccess, and Region’s Now Card.
The biggest drawback is…
…that the Convenient Cash Card won’t help you build/rebuild credit. It’s just a prepaid card; not reported to the credit bureaus and therefore won’t show up on your credit report.
So that brings us to the question… do you really want to be stuck in the prepaid rut for the rest of your life? Or would you rather be on track to rebuilding your credit?
No matter how crappy your credit score may be, you can still get approved for a secured credit card. Why? Because you are guaranteeing the risk with your own collateral (cash). It operates in a somewhat similar manner as prepaid, but has distinct differences:
- Security Deposit: With a secured credit card you put up a refundable deposit as collateral. This amount becomes your credit limit. For example if you add $700 to your account, your credit line will be $700.
- Monthly Bill: Unlike a prepaid card, you will have a monthly bill to pay. It operates like a normal credit card in that you can either pay your bill in full (to avoid interest) or over time (and be charged interest).
- Credit Bureau Reporting: Unlike a prepaid card, a secured card is reported to the credit bureaus each month. It shows up on your credit report just like any other credit card.
And don’t forget your security deposit is refundable. You will receive the money back whenever you choose to close out the account.
With some secured cards, the total fees you will pay per year are actually less than the US Bank Convenient Cash Card. So the obvious choice is that it makes sense to
Review written or last updated in 2013