Prepaid debit cards are an increasingly popular form of plastic, used in about 1.3 billion transactions last year for a total of $77 billion in spending.
Norma Garcia from the Consumers Union says there are plenty of reasons people might find these cards attractive beyond the celebrity endorsement that may be attached.
"A prepaid debit card is an option for someone who doesn't want to have a bank account or who doesn’t want to deal with banks," Garcia said. "It's an option for someone who wants flexibility, or sometimes people give their children prepaid debit cards to control their spending, or for people who want to budget their spending. "
The fact that these cards are not tied to a bank account, however, can be problematic.
Use a bank-associated credit or debit card, and there are protections against fraud, theft or a disputable charge. Prepaid cards, on the other hand, while claiming to offer similar protections, are not legally obligated to.
"There is no legal obligation to do so, and since it's voluntary, we feel that consumers are at risk because that protection can be withdrawn at any time by the card provider," Garcia said.
The other concern with prepaid cards are the long list of fees.
"To activate the card, to load money onto the card, to make purchases with the card, to withdraw money from an ATM, to get advice from customer service," Garcia said.
The fee range depends on the issuer, but it can be startlingly high in the worst cases.
How about $19.95 to activate the card before you've even made a single purchase? Or $5 just to speak to a customer service representative?
In many cases, the fees are not stated on the packaging and may be hard to locate even online.
"In some cases, we were able to find the fees fairly easily and in other cases, the fee information was buried way deep into the disclosures and made it very difficult to ascertain how much this was going to cost, so there is a certain amount of homework that should be done in advance," Garcia said.
Consumer reports recently rated 26 prepaid debit cards, and while Garcia says some are better than others, she advises consumers to consider other options, such as opening an account with a bank or credit union.