More notably, the results from the survey continue to show that members are saving by using their RushCard. Of those surveyed, 75 percent report they are saving between $300-$900 a year by using the money management pages, where members set their spending levels in 14 categories – including auto, dining, health and fitness, and utilities. There, they can review their recent spending data regularly in each category, track their spending and monitor their deposit and balance trends to achieve their financial goals.
The prepaid card industry has to make its case against criticisms that prepaid cards are an expensive form of financial services. The Consumers Union referred to prepaid cards as “Second-Tier Bank Account Substitutes” in a report in September 2010.
Prepaid cards are certainly less expensive than check cashers and money orders for most consumers. How prepaid cards stack up against bank accounts remains to be seen, as free checking accounts start to become harder to find in the wake of the Durbin Amendment.
Still, the RushCard survey raises the question of whether consumers are saving money because they are using the card, or because they are adhering to a budget. In other words, the results may be due more to good budgeting tools rather than any inherent value in prepaid cards themselves.