After restructuring my finances last year, I no longer have any credit cards, which is a blessing in terms of debt, but a pain in the neck in terms of convenience. My bank gives me a Visa check card, but I am loath to do much online shopping with it, lest some miscreant find a way to tap the whole of my checking account while I’m not looking. Then again, for all I know, they might be using skimmers down at the gas station.
There are always prepaid cards, but they tend to come with a metric buttload of fees:
First up: an activation fee to secure a card. Such fees average $5 but at least one provider, Millennium Advantage, has charged $99.95 according to the nonprofit group Consumers Union. After that, customers typically pay $3 to $10 each time they load the card with cash. Monthly maintenance fees average about $5, but can be double that amount. ATM withdrawals can cost $2.50. Printing an account summary can cost up to $5.95. And some cards even charge to close the account.
From stage right comes the white knight, and it wasn’t whom you expected. American Express (!), not known for its solicitousness toward unbanked folks, has a new prepaid card with exactly two fees:
- If you refill it with cash, you go through GreenDot, which costs $4.95;
- Second ATM withdrawal of the month costs $2 (not including any fees imposed by the owner of the ATM).
However, you can refill the card from a bank account or (yeah, right) from an existing Amex account, for which they charge you zip. So it’s not like they’re doing poor folks a favor. Still, many of the same bennies that go with the high-zoot Amex cards also apply to the prepaid.
The ways of Amex, I have learned through personal experience, can be inscrutable. On the other hand, they’re more of a known quantity than the competition in this market, and I’d rather deal with them than with someone who would have the temerity to charge $100 as an activation fee. (If you order from the Amex web site, the fee is $0, right in my price range.)