CardHub Research Indicates There’s a Right Prepaid Card for the Right Scenario (June 17, 2015)
A growing number of consumers are eschewing traditional checking accounts in favor of GPR prepaid cards in large numbers, according to a report by CardHub, a search tool owned and operated by Evolution Finance that assists consumers in searching for, comparing and applying for payment cards. U.S. consumers are expected to load $337.8 billion onto GPR prepaid cards by 2017, according to the report.
Part of prepaid’s growth in popularity can be attributed to the average decrease in fees; and the number of fees now are a fraction of what a consumer can incur with a checking account, according to the report. The average prepaid card charges nine different fees, compared with 30 fee types for the average checking account, CardHub found.
“Prepaid cards can be a great tool for many different types of people, as they’re safer than cash … They also offer guaranteed approval and provide all of the same functionality as a checking account-debit card combo—just without the physical checkbook,” according the CardHub report.
The study examined four scenarios for prepaid use and determined the average annual cost, including: as a checking account replacement, for children to manage their allowances, an alternative to check cashing stores, and consumers seeking access to e-commerce. For example, the research determined that the average cost to the consumer in 2015 for a prepaid card that replaces a checking account is $132, $103 for a child’s allowance, $99 as a check-cashing tool, and $125 as access to electronic transactions. All of these costs are lower than 2014 totals: $174 for checking account, $112 for child’s allowance, $164 for check cashing and $127 for electronic transactions.
The study also named the best prepaid cards for each of the scenarios. For example, as a checking replacement, CardHub named the top prepaid cards as Green Dot Gold Prepaid Visa and Paybefore Award winners KAIKU Visa, American Express Serve and American Express Bluebird.
Click here for the full report.
Click here for CardHub’s cost comparison tool.