Six In Ten Adults Don’t Know Prepaid Debit Cards Have Fees

Even while prepaid debit cards grow in popularity, many U.S. adults admit they aren't familiar with the fees associated with using them.

According to a survey conducted by Harris Interactive, nearly six in ten (58%) of U.S. adults said they are not aware of fees associated with prepaid debit card use. Nevertheless, more than one-quarter (27%) of U.S. adults say they are more likely to use a prepaid debit card now than before the recession.

Prepaid debit card use is common, as more than four-in-ten (42%) U.S. adults have purchased or received a prepaid debit card for personal use.

Why do consumers want prepaid cards?

When asked how they have used their prepaid debit cards, U.S. adults who have purchased or received one said the following:

  • For everyday purchases – 69%
  • To make purchases online – 36%
  • To use instead of cash or credit when I travel – 19%
  • To take out money from an ATM – 10%
  • Other – 10%

“More consumers are using prepaid debit cards these days, but like with any financial decision, users need to be aware of the pros and cons,” said Jackie Warrick, President and Chief Savings Officer at, who commissioned the Harris study. “Even as new consumer protections are sought, users need to do their homework to ensure that prepaid debit cards are a good fit for their personal budget and lifestyle.”

Public opinion split

When it comes to opinions on prepaid debit cards, U.S. adults are evenly split. 44% have a negative opinion of the cards, while 43% view the cards positively.

Of those who have a positive opinion, they report they like prepaid debit cards because:

  • 23% – Safer than cash
  • 19% – Help me budget and not overspend since they are pre-loaded with a specific amount
  • 19% – Don’t make me worry about overdraft fees
  • 18% – Help me to not accumulate credit card debt
  • 10% – Cheaper than a high-fee checking account

On the flip side, of the 44% of U.S. adults who have a negative opinion of prepaid debit cards, the following reasons were cited:

  • 25% – Don’t help me build a strong credit score
  • 24% – There are too many fees
  • 17% – Don’t have the security protection of a bank-issued debit card
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What should consumers do?

Warrick at CouponCabin offers the following tips to consumers interested in using prepaid debit cards:

Do research. Before you select a prepaid debit card, look into all the fees, deadlines, contracts and more before you sign up. The fees and fee schedule can vary greatly from card to card, so make sure to pick one that best fits your lifestyle and budget.

Keep your credit cards active. Even if you’re using a prepaid debit card for almost all your expenses, don’t cancel your credit card accounts. Prepaid debit cards don’t build credit, so you’ll still need an open credit account to maintain your credit score.

Stay on track. Overages on prepaid debit cards can be costly. Check to see if there is an online account that you can use to track your purchases, or keep a detailed spreadsheet on your own.

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