Until now, reloadable prepaid cards have been primarily used by people without bank accounts, and by states to deliver benefits. But Mercator Advisory Group predicts that $70.7 billion will be loaded onto these cards in 2011, a 68% increase over 2010.
Banks hope that the fees on prepaid cards will help them recoup revenue lost as a result of limits on fees charged to credit card users and, now, cuts in the fees paid every time someone swipes a debit card (for more on bank fees, see How to Get a Better Deal at Your Bank).
Plus, prepaid cards have started to appeal to more affluent customers. Issuers have a “great opportunity to go up-market,” says Brent Watters, a Mercator analyst. Higher-income consumers are using prepaids to avoid going into debt. Or they’re giving one to a child who is traveling abroad or going away to school.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The new American Express Prepaid card eliminates many of the fees (purchase, activation, maintenance and some reloading fees) that traditionally characterize these cards. However, you will pay $2 for ATM withdrawals after the first one each month. Reload at no charge via checking account transfers or direct deposit.
-
Amazon To Offer Students $25 Flights For The Holidays — But You Must Act FastAmazon Prime Student members will have a chance to score one of 3,000 tickets for a limited time, starting December 5.
-
Walt Disney's Dividend Is Back. Will DIS Stock Follow?
Disney reinstated its dividend after a three-year suspension as shares remain depressed.
-
Four Tips for Renting Out Your Home on Airbnb
real estate Here's what you should know before listing your home on Airbnb.
-
Five Ways to a Cheap Last-Minute Vacation
Travel Procrastinator? No matter. You can pull off a fun and memorable getaway on a moment's notice — without breaking the bank.
-
How Much Life Insurance Do You Need?
insurance Instead of relying on rules of thumb, you’re better off taking a systematic approach to figuring your life-insurance needs.
-
When Is Amazon Prime Day?
Amazon Prime In 2023 Amazon had two Prime Day events — one in July and another, called Big Deal Days, in October. We expect 2024 to follow the same schedule.
-
How to Shop for Life Insurance in 3 Easy Steps
insurance Shopping for life insurance? You may be able to estimate how much you need online, but that's just the start of your search.
-
5 Ways to Shop for a Low Mortgage Rate
Becoming a Homeowner Rates are high this year, but you can still find an affordable loan.
-
Retirees, It's Not Too Late to Buy Life Insurance
life insurance Improvements in underwriting have made it easier to qualify for life insurance, which can be a useful estate-planning tool.
-
How to Benefit From Rising Interest Rates
Financial Planning Savers will get the best rates from top-yielding savings and money market deposit accounts at online banks.
