Economic Study Finds Reloadable Prepaid Cards a Comparative Value in Environment of Rising Bank Fees

One continual debate around prepaid cards is whether or not they are a good value for consumers who do have or cannot get access to a bank account. A study by G. Michael Flores, an economist with research company Bretton Woods, Inc., found that prepaid cards offer a viable alternative to bank accounts and may even be a better value in some cases. This stands in stark contrast to studies by the Consumers Union which compared prepaid cards to free checking accounts and found that they were a bad alternative for consumers without bank accounts.


Flores found that consumers with prepaid cards paid less than those with bank accounts when they used direct deposit.

To gain an accurate comparison of the costs to consumers using reloadable prepaid cards versus bank accounts for similar usage patterns, Flores reviewed the pricing of basic FDIC-insured checking accounts from the top four banks (by asset size) in the United States and the prices from the largest providers of network branded prepaid cards. The analysis utilized the consumer transaction pattern suggested in a recent study by consumer advocacy group Consumers Union.

At the low end consumers paid $76.35 for prepaid cards, and $218.35 for a basic checking account according to Flores’s analysis.

Read the full press release here: http://www.nbpca.org/~/media/E73DA6F1D0AF46D78EBBFAC7EAE0C110.ashx

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