Pre-Paid Cards — The Priciest Plastic of All!

Pre-Paid Card Fee Survey Summary
Pre-Paid Card Fees	Activation Fee	Annual Participation Fee	POS Transaction Fee	ATM Transaction Fee	Load Fee (22)
Percentage of Cards that Assess the Fee	87%	87%	70%	100%	53%
Average Fee Assessed in Each Fee Category	$50.12	$69.70	86¢	$1.64	$1.44

Alternatives available to consumers, who find it difficult to pay the high fees associated with maintaining a bank account as documented in this report, are often very costly. This is particularly disturbing in New York City's predominantly non-white, low-income neighborhoods where bank-owned ATMs and full-service bank branches are scarcer than in higher-income, predominantly white New York City neighborhoods. ( 23)

Un-banked consumers often pay enormous fees to obtain snazzy-looking products like pre-paid Visa and MasterCards, which are often aggressively marketed to low-income consumers. ( 24) Our April 2004 survey showed that these products typically charge hefty activation fees, annual participation fees and per transaction fees. These fees are in addition to ATM surcharge fees and, since the card sponsors typically do not own ATMs, these card holders almost always are charged twice for one electronic transaction. The outrageous fees associated with this financial product make it a poor choice for struggling low-income New Yorkers.

Introduction | ATMs-Always Taking Money | Debit Card Confusion | Pre-paid Cards-The Priciest Plastic of All | The Credit Card Trap
Bye-bye Paycheck-Payroll Cards | Don't Save that Gift Card for a Rainy Day | Recommendations | Methodology | Attachments | Credits