Getting a prepaid debit card is easy, there is no question to that. However, despite the convenience of getting a debit card, consumers must still spend time comparing and shopping around before making a choice. Why? Although you don’t have to worry about interest rate fees and late penalty fees, there are other costs that you need to be aware of.
Basic Fees Associated with Prepaid Cards
Activation Fee. Activation fees can range from $9 to as much as $100, depending on the issuer and the type of prepaid card.
Negative Balance Fees. Normally, debit cardholders are not allowed to overdraw. However, there are cases when your bill can exceed your available balance, and you will be charged with a negative balance fee.
Decline Fees. Since overdraw is not allowed, your transaction will be declined if you try to use your debit card for payment without sufficient balance in your account. However, you can get penalized with decline charges.
Daily Limit Fees. Some issuers impose a daily limit or a maximum amount of charge per day. Thus, once you reached that limit, your transaction can still be declined even if you have existing funds in your account.
Cash Advance Charges. You can withdraw cash from your debit account using an ATM. However, you can also incur cash advance charges.
Reloading Fees. If you reload your debit card by making a direct deposit, no extra fees shall be charged. However, if you try to reload using other services, you may incur an additional reloading charge.
Additional Charges. Some gas stations, restaurants, hotels and car rental service who accept debit card payment may impose a “hold” or extra charge on your bills.
ATM Balance inquiry. There can be a minimal fee of $1 or less each time you check your balance from the ATM.
Maintenance Fees. Some prepaid card issuers charge a monthly maintenance cost, aside from the yearly activation fee.
Inactivity Charge. You may also get penalized if you fail to use your debit card on any transaction for more than 60 days.
Customer service Fee. Before calling your debit card’s Helpline, make sure that you understand the possible fees you can incur. Not all issuer provide a free helpline.
Transaction Charges. Most prepaid debit card issuers will charge you an additional cost for each transaction you make- be it offline or online.
Account termination fee. If you want to close out the account, you can be charged with a termination cost as well.
Card replacement. In case of lost, you must pay a fee if you request for a replacement.
Card renewal. Your prepaid card will expire after a certain period (usually three years or longer). After that period, you will pay an extra fee for requesting a new card.
About the Author
Tara Tiemann is a credit analyst for Go-prepaid.com which has been a resource site for people who want to live debt free. If you are on a budget using prepaid debit cards,prepaid credit cards and prepaid cell phone service can save you big money!