Friday, July 26, 2013

Prepaid Credit Card Fees - a Ripoff?

Fees Can Swallow Card Balance

An article in todays Vancouver Sun draws attention to what can clearly be described as a consumer ripoff when it comes to prepaid credit cards.

Fees such as a $20 activation fee and $7.50/mo. maintenance fees can empty a card before the unsuspecting consumer knows about it. Apparently there are no limits to the fees the card issuers can charge so it is still a matter of caveat emptor (buyer beware) when it comes to purchasing one of these cards, often bought for convenience or given as a gift.

 RBC for example charges a $3.95 activation fee for their prepaid credit cards. While the Titanium prepaid Visa offered by Money Mart has a $20 activation fee, $7.50 monthly maintenance fee, $2.50 reload money fee, 50 - cent transaction fee, a statment fee and a $10 fee to cancel the card. There was a time you might have called these kinds of rates usury.

So if you really think a prepaid credit card is something to use or give, be sure to make yourself aware of just what those fees might be. Instead of a $50 prepaid card, it might still be a good idea to go to the bank and get a nice new, crisp $50 bill to include with your greeting card.


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