Tuesday, April 5, 2011
Report finds checking accounts better than prepaid cards
Nonprofit consumer watchdog Consumers Union released a report that claims most prepaid cards charge higher fees than what consumers can expect to pay for basic checking accounts offered by the top five banks in the United States.
In Adding It All Up: How Prepaid Card Fees Compare to Checking Account Fees, Consumers Union said that, while some banks are beginning to charge news fees, basic checking accounts still compare favorably to prepaid cards in terms of costs to consumers.
The nonprofit reportedly compared low-balance, no-interest checking accounts at Bank of America, JPMorgan Chase & Co., Citibank, US Bank, Wells Fargo, Alliant Credit Union and Golden 1 Credit Union to the following prepaid cards:
- Account Now Gold Prepaid Card
- Green Dot Prepaid Card
- H&R Block Emerald Card
- Insight Monthly Fee Card
- Insight Pay As You Go Card
- Joyner Reach Card
- NetSpend VISA Fee Advantage
- NetSpend VISA Pay As You Go
- Reach Card
- Rush Card Pay As You Go
- Rush Card Pay Monthly
- Wal-Mart Money Card
- Western Union prepaid card
Consumers Union found that banks' checking accounts were:
- Cheaper overall for consumers than 10 of the 12 prepaid card programs
- Cheaper in terms of fees than nine of the 12 prepaid card programs
- More affordable than the prepaid cards even if prepaid card customers take all necessary steps to avoid fees
- Less affordable than the checking accounts offered by credit unions, which makes credit union checking accounts more affordable than all 12 prepaid card programs
To access the report, go to www.defendyourdollars.org/pdf/Adding-It-All-Up.pdf .
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