Majority of US consumers pay less than $7.50 per month to use a prepaid debit card, highlighting cost advantage over basic current accounts, according to the fourth annual ‘Analysis of General Purpose Reloadable Cards’ released by Bretton Woods.
Based on data gathered from programme managers and bank issuers, the report found that on an average, the direct deposit basic current accounts cost more than twice than that of direct deposit general purpose reloadable cards (GPR) cards. The non-direct deposit current accounts are 1.5 times more expensive.
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The report also found that nearly 60% of banks are now offering GPR cards and the cost of a cash-based lifestyle has reduced due to retailers such as Walmart has started offering check cashing services.
Most of the consumers who use basic current account currently pay around $263-473 per annum, where consumers who use reloadable prepaid card with and without direct deposit spend in between $58-33.75 and $58-263.95 per annum respectively.
Bretton Woods president G Michael Flores said the three-year trend shows that the costs of basic current accounts are increasing while the costs to use GPR cards, also known as prepaid debit cards, are decreasing.
"The 2013 analysis is able to pinpoint with more accuracy what it costs the majority of consumers to use their cards and revealed that high fees incurred by consumers are from outlier cards only and are completely avoidable," Flores added.
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By GlobalDataNetwork Branded Prepaid Card Association (NBPCA) president and executive director Kirsten Trusko said while similar to current accounts, prepaid cards fill a critical financial services need for a new generation that prefers the consumer friendly technology, as well as consumers with limited access to current accounts.
"Prepaid cards allow users to safely, securely and conveniently manage their money," Trusko added.
"General purpose reloadable prepaid cards are serving the needs of Gen Y and the underbanked, and also gaining a foothold with traditionally banked consumers – fueled by the number of banks and credit unions now offering GPR cards."
