About 62 percent of prepaid cards do not meet the needs of the average consumer, according to CardHub's latest Prepaid Report. Choosing the wrong prepaid card can cost a consumer $350 per year, writes Odysseas Papadimitriou, CEO of CardHub and WalletHub.
Some cards can make personal finance easier for consumers who know what they are looking for and are willing to read the fine print. A prepaid card -- a debit card that is not tied to checking account -- is usually used in one of three ways: as a replacement to a checking account, as an alternative check-cashing tool, and as a way of providing a child's allowance. For a replacement checking account, consumers should look for prepaid cards that offer free direct deposit, online bill pay, and ATM withdrawals. Those who want a card as an alternative check-cashing tool should focus on products that offer the ability to load checks directly and free withdrawals at in-network ATMs. Parents who want a prepaid debit card for their child's allowance, meanwhile, should look at cards that offer free deposits from a bank account and free in-network ATM withdrawals. Consumers should scrutinize each card's costs in terms of their intended monthly use and compare the card's total cost with alternatives such as a traditional checking account.