Prepaid cards are a popular option for people without bank accounts or people who want to avoid overdraft fees. But a new study warns most cards have hidden fees that will zap your funds.
The study was done by Austin-based Creditcards.com. Their analysis found just three in 10 cards fully disclosed all their fees according to guidelines set by the Consumer Financial Protection Bureau (CFPB).
According to Creditcards.com, the only cards analyzed that fully met the CFPB guidelines were American Express Bluebird, American Express Serve and Green Dot Visa Gold. All three cards fully disclosed charging fees for actions like reloading the card with cash and withdrawing money from an ATM that is not in-network.
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The study found the worst cards are owned by payday lenders. The analysis found the ACE Elite Card by ACE Cash Express and the Opt + Card by Speedy Cash failed to disclose charging fees monthly and when you make a purchase, as well as a number of other consumer activities.
Bill Baker, COO of Speedy Cash's parent company, Curo Financial Technologies Corp., sent the following statement to NBC 5 Responds:
"We were really disappointed in the creditcards.com review. Our policy is to issue terms and conditions as well as an info pamphlet with every new card we issue.
"In addition, this review was based on just two mystery shops. Opt+ fees are not only included in the terms and conditions, but we have made the effort to create an intro pamphlet that explains the pricing options, features and functionality of the card. Pricing is also available on our website and mobile app.
"In the review there was no mention that we do not charge for issuing the card, rather it was listed as "sold." It was not mentioned that if customers direct deposit $1,500 or more per month there are no monthly or transaction fees.
"I take offense with how our product was portrayed. We make great efforts to educate our customers on the various pricing options and ensure they are on the plan that best fits their individual needs and offer for those plans to be changed as their needs change.
"We appreciate card comparisons, but only when they are accurate and fair, otherwise it's the comparison itself that is deceptive."
ACE Cash Express leaders did not return our calls and emails by our deadline.
See below how prepaid cards ranked: