Consumer Reports Dubs Prepaid ‘A Smart Way to Pay,’ Rates Top Products
As prepaid providers eagerly await the release of the CFPB’s long-gestating final rule on prepaid accounts, Consumer Reports is lauding the industry for reducing or eliminating fees and instituting consumer protections akin to those of a debit card. The improvements in prepaid products at large have led the magazine to dub prepaid cards “a smart way to pay with plastic,” in a new report and prepaid card buying guide. It’s quite a change from just six years ago, when Consumer Reports didn’t recommend prepaid cards, citing what it called high fees and inadequate consumer protections.
Advances since 2010 have transformed prepaid products into “a money tool that combines the ease and versatility of plastic with the freedom from fees of cash,” the magazine said. Along with lower fees and consumers protections, Consumer Reports cited several advantages of prepaid, including widespread acceptance at POS and ATM locations, budgeting, spending controls for teens, debt avoidance and security—especially for seniors, who often are targeted by scammers. The magazine also singled out several specific prepaid products in its latest prepaid ratings, which included separate rankings for prepaid cards as an alternative to a traditional checking account and as a supplement to a bank account. The same five prepaid programs were named tops on both lists, albeit in different order.
The top five cards in the bank account substitute category were:
- Chase Liquid Visa
- Green Dot Prepaid Visa
- Halogen Reloadable Prepaid Mastercard from Kmart
- Bluebird by American Express and Walmart
- American Express Serve
In the checking account supplement ratings, the order was:
- Bluebird
- Chase Liquid
- Green Dot Prepaid Visa
- Halogen
- Serve
Bluebird, Chase Liquid and Serve were also included in Consumer Reports’ previous prepaid card rankings, which were released in November 2014.
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