Trends: What’s New With Prepaid Debit Cards?

With new government regulations coming, I thought it was time to provide an update on this fast growing financial product which is fast becoming a substitute for checking accounts (I provided a prepaid debit card primer in August).  So, what’s new?

“Topping the list is the Bluebird card (by American Express and Walmart), which comes without a monthly fee, no inactivity fees or fees for calling customer service, along with a bill paying feature and no-overdraft paper checks. “

  • The CFPB is expected to keep a closer eye on the industry (WSJ).  What are they focusing on?

U.S. officials plan to unveil this week a comprehensive slate of consumer protections for prepaid debit cards, according to people familiar with the matter, a move that could further broaden the customer base for the fast-growing product.

The Consumer Financial Protection Bureau’s proposed rules, expected Thursday, will include standards for how prepaid-card companies disclose fees and make it harder for borrowers to spend more money than they have loaded onto the card, the people said.

  • Here’s a chart showing the dramatic growth in the industry:

MI-CG170_PREPAI_16U_20141110174205

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Check out the NGPF lesson on Picking a Payment Method.