Light Fees Lift Bluebird to Top Spot in Prepaid Cards Study
The high-flying Bluebird card from American Express and Walmart claimed the top spot in Consumer Reports’s first ranking of prepaid cards today. Another American Express venture with a retail giant, Target, finished last among the 26 cards surveyed.
Bluebird is still a new product, having launched in October 2012.
Consumer Reports puts prepaid transaction volume at $77 billion for 2012. The space, while largely unregulated, is due to come under scrutiny from the Consumer Finance Protection Bureau, as the Bureau itself said in May 2012.
The top five cards according to Consumer Reports are:
• Bluebird with direct deposit (American Express)
• H&R Block Emerald Prepaid MasterCard
• Green Dot Card (Green Dot Bank)
• Approved Prepaid MasterCard (Suze Orman) with direct deposit
• Approved Prepaid MasterCard (Suze Orman) without direct deposit
All of the top five cards provide FDIC insurance on funds deposited.
Cards were evaluated on the amount and transparency of fees. Bluebird’s simple fee structure carried it to the top of the list.
Several bank cards were included in the study, such as Chase Liquid from JPMorgan Chase, BB&T Prepaid Debit card, Access 360 Reloadable Prepaid card from Fifth Third Bank, US Bank Convenient Cash card, and the Regions Now card.
The report placed the banks in the middle of the bank, stating, “Bank prepaid cards are not necessarily cheaper than other prepaid cards. Furthermore, because they typically lack the option to use ‘bill pay,’ they may be less attractive than other prepaid cards.”
It’s ironic that a big sticky feature of online banking is being offered by nonbank prepaid cards and not by the banks’ own prepaid offerings.
The full report is available here (PDF). Consumer Reports is published by Consumers Union.
