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Bankrate study compares prepaid card fees

April 15, 2013

All prepaids are not created equal. They might all come with fees attached, but these can vary dramatically, depending on the card and how it is used, according to the recent Bankrate.com "2013 Survey of Prepaid Debit Card Fees."

Bankrate, a publisher, aggregator and distributor of personal finance content on the Internet, compiled a survey from Feb. 12–19, 2013, of fees for 24 prepaid cards from prominent issuers.

"The biggest development in the prepaid card market over the past year was the entry of several large national and regional banks," said Greg McBride, CFA, senior financial analyst for Bankrate.com. "Many offer cards with low, fixed monthly costs. The ability to know the total monthly cost in advance is valuable to consumers, particularly with the decline in free checking accounts."

Activation fees

• Two-thirds of issuers charge no activation fee if the card is purchased online. Fifty-four percent offer in-person purchase without an activation fee.
• Activation fees range from $2.99 to $14.95.

Monthly service fees

• Fifteen of the 24 cards (63 percent) charge a monthly service fee ranging from $3 to $9.95.
• Eight of the 15 cards that charge a monthly service fee offer a fee waiver or reduction, which is usually based upon how much money is automatically loaded onto the card.
• In total, two-thirds of the cards that Bankrate surveyed either have no monthly fee or offer a fee waiver.

ATM withdrawal fees

• All 24 cards charge a fee to withdraw money from another institution's ATM; the fee ranges from $1.50 to $2.75 per transaction.
• Fifteen of the 24 cards have their own ATM networks. Ten of the 15 (67 percent) charge an in-network withdrawal fee ranging from $1.50 to $2.75.

ATM balance inquiry fees

• Thirteen of the 24 cards (54 percent) charge an ATM balance inquiry fee ranging from 45 cents to $1, regardless of network used.
• Of the remaining 11 cards, five charge balance inquiry fees only at some ATMs, four do not charge at all and two do not permit ATM balance inquiries.

PIN/signature point-of-sale fees

• Seventy-one percent (17 of 24 cards) do not charge for PIN-based point-of-sale transactions. Two cards do not permit PIN-based POS transactions. Five cards that charge a fee that ranges from 49 cents to $2.
• Eighty-three percent (20 of 24) do not charge a signature-based fee for POS transactions. Among the four cards that do charge, the fee is either 95 cents or $1.

Monthly statement fees

Fourteen of the 24 cards (58 percent) charge a monthly fee ranging from $1 to $5.95 for a mailed statement. Thirty-three percent do not charge a fee, and 8 percent do not offer statements by mail. None offers a statement that can be printed at an ATM.

Bill payment fees

Ninety-two percent (22 of 24) charge no fee for bill payments. One card charges a 99 cent fee for each bill payment, and one charges a $1 fee for bills paid via paper checks.

Customer service fees

Only 17 percent of the cards charge for all customer service calls, with $2 the most common fee. Eighty-three percent provide at least one free call per month; two-thirds never charge for telephone customer service.

Declined transaction fees

Fifteen of 24 cards (63 percent) do not charge for declined transactions. Five cards (21 percent) charge between 25 cents and $1.95 for a declined transaction. Four charge only for transactions declined at an ATM, with fees of either $1 or $2.

Inactivity fees

Only 29 percent of the 24 cards charge a monthly inactivity fee ranges. Fees range from $1.95 to $5.95 and typically are not charged until the card has been inactive for at least 90 days. The remaining 71 percent of cards do not charge an inactivity fee but may close the card after three to six months of inactivity.

Reload fees

None of the issuers that Bankrate surveyed charge reload fees.

Read more about trends and statistics.