Let's review how much it costs to bank with a prepaid debit card.
I've estimated the expenses paid by a person who relies on a prepaid debit card as a primary transaction account. Consistent with that goal, the costs reflect full-time usage by a person earning the minimum wage.
- Fifteen signature point-of-sale purchases and 8 PIN point-of-sale purchases, for a total spend of $1,000.
- One ATM withdrawal.
- One cash reload
- $1,440 in monthly direct deposits. Our account holder works at a full-time job making $9 per hour.
- Remote photo deposit of a $50 check.
If the card has a free ATM network, then we work from the assumption that the cardholder made use of the free ATM. If there is no free ATM network, then we sum the cost of two out-of-network ATM transactions plus two more $2.50 host ATM fees. Additionally, we input the cost of one “cash load.” Unless otherwise stated, we use a cash load cost of $5.95 on the logic that most people will use the Green Dot MoneyPak. However, we assume that WalMart MoneyCard account holders make use of the store’s free cash loading.
We add the monthly fee, but since our hypothetical customer makes a direct deposit of $1,440 to the account every month, we factor for monthly maintenance fee discounts. For example, while the monthly fee for a NetSpend card is $9.95, it falls to only $5.00 if the account holder made deposits at least $500 to the account in the previous month.
Our customer received a check for $50 from a friend and would prefer to deposit it with a smartphone. Many card companies partner with Ingo Money to facilitate the deposit of checks remotely. Ingo Money charges 1 percent of the face value of payroll and government checks (with preprinted signatures) and 5 percent for other checks. The minimum cost is $5.00. Ingo Money does not deposit checks with a face value of less than twenty dollars. In instances when the card did not offer photo deposit, the customer went to a check casher and paid a 4 percent fee ($2.00).
Account Now, $28.90. Account Now (so named because anyone can get an Account Now account right now) is probably the most expensive nationally-known prepaid card in today’s market. You will pay $9.95 to have an account now card – even if you have established a recurring direct deposit. Account Now does not offer a discounted plan. As well, Account Now does not include access to a surcharge-free ATM network. As a result, you will pay $3 to Account Now to withdraw cash and then another fee to the owner of the host ATM. Account Now even charges $1.50 to check your balance (before the host ATM fee). Our customer had to use the check casher.
Akimbo, $21.86. Akimbo doesn’t charge a monthly maintenance fee, but cardholders must pay $0.99 for each of the first five PIN debit purchases each month. Akimbo’s representatives do make the point that consumers can always ask the cashier to run the sale as credit and avoid the fee, and thus, a savvy consumer could still use the Akimbo card and only pay a fraction of these fees. One potential vulnerability is that Akimbo does not participate in a surcharge-free ATM network either. Our hypothetical customer paid $3.96 ($1.98 per withdrawal) in ATM fees twice plus another $5.00 in out-of-network host ATM fees. Our customer used the check casher.
NetSpend Prepaid Mastercard, $20.95: With direct deposits of $1,440, our customer qualified for the NetSpend Reduced Monthly Plan. The RMP has a five dollar monthly maintenance fee. Card purchases are free. NetSpend does not offer a surcharge-free ATM network. Our customer paid NetSpend's $2.50 ATM withdrawal fee twice and another two $2.50 withdrawal fees to the host ATM owner. NetSpend uses Ingo Money, so rather than pay the $5 minimum fee, our customer visited the local check casher. Cash reloads cost $3.95.
Brinks Prepaid Mastercard, $20.95. Brinks is one of a number of partner-branded cards that operate on the NetSpend system. Others include the Ace Elite Prepaid and Major League Baseball prepaid cards. All NetSpend cards offer optional PayBack Rewards, but tI cannot estimate them because NetSpend only makes them known to existing cardholders. The company does indicate that the offers change from time to time.
Rush Card Monthly: $13.90: Any account receiving a direct deposit of wages or government benefits qualifies for Rush’s reduced monthly fee of $5.95. Rush belongs to a surcharge-free ATM network, so our customer saved a lot of money by using Rush instead of one of the NetSpend cards. Still, as Rush relies on MoneyPak for cash reloads, our customer had to pay $5.95 to load cash on to the account. Our customer used the check casher.
Rush Card or Green Dot Unlimited Cash Back Bank Account by Green Dot, $7.35. Any account receiving a direct deposit of $1,000 gets the $7.95 monthly fee waived. Green Dot belongs to a surcharge-free ATM network, so our customer saved a lot of money by using Green Dot instead of the card’s biggest rival, NetSpend. Still, our customer had to pay $5.95 to load cash on to the account. Our customer used the check casher. The Unlimited Plan rebates all in-app and online purchases for three percent of the purchase price. Just a guess – we estimated that our account holder spent $200 online during the month, and as a result, received $0.60 in cashback. The consumer will accrue that benefit but not receive it until the account has been open for twelve months.
Green Dot (standard), $7.95. Most people will get stung by Green Dot’s hefty monthly fee. Green Dot used to charge $5.95 per month for its card, but now that it has grown in stature at the same time that many of its medium-sized competitors have withered away, the company now charges $7.95. Our customer avoided the monthly fee by receiving the $1,000 direct deposit. Green Dot cancels the charge for anyone who direct deposits at least $1,000 in the prior month, or if the person makes 30 debit card purchases. Our customer spent $5.95 to purchase a MoneyPak to deposit cash. Our customer used the check casher.
Walmart Money Card, 6.10: If you shop at Walmart, then the company’s MoneyCard account could be a good value. Walmart raised the price of its card recently, and as a result, it now costs $5.00 per month to have an account. Our customer avoids that cost, however, because Walmart voids the fee for anyone who deposits at least $1,000 to an account in the prior month. While you can buy a load to deposit cash to your card, our customer took advantage of free loads at Walmart to avoid this fee. Walmart does not offer a surcharge-free ATM network, but again, a customer can access cash for free at Walmart. We estimated that our customer used Walmart for cash once but went out-of-network for the other withdrawal. Our customer could have paid four dollars (minimum for checks of less than $1,000) to cash a check at Walmart but opted to go to the independent check cashing service where the cost was two dollars.
Our customer spent $300 at Walmart and received $0.90 in cashback rewards as a result.
Wells Fargo Easy Pay, $5.00: The only fee most people will pay to use an EasyPay card is the five dollar monthly fee. Outside of that expense, adding and withdrawing cash can be done by utilizing Wells Fargo’s branch network. Easypay does not have transaction fees. All cardholders can use Wells’ mobile deposit service for free.
Regions Now VISA, $5: Regions charges the same $5.00 monthly fee. Regions waives monthly fees when customers make more than $500 in deposits. Regions let account holders use its branches and its ATMs, so reloading and ATM fees are not recorded. Regions also offers Ingo Money, but our customer elected to deposit the check in a branch for free.
Amex Bluebird, $2.95 to $8.95: Bluebird does not charge a monthly fee or a transaction fee. A person can get the card for free online but will pay $5 to open the account at a retail store. Bluebird provides access to the MoneyPass network, so our account holder avoided ATM withdrawal fees. A savvy consumer might go to Walmart to use their free cash loading alternative. Alternatively, it costs $3.95 to load cash at a Duane Read, Walgreens, 7-Eleven, or Dollar General. Amex uses the Ingo Money service.