Credit card comparison site NerdWallet launched a new tool today that makes it easy for you to choose the right prepaid debit card for your lifestyle.
The tool (NerdWallet.com/prepaid) offers free, side-by-side comparisons of 40 popular prepaid debit cards to help consumers make sense of the fees and terms buried in the fine print.
The tool is easy to use, and even kind of fun.
Users start by answering four questions to help the site gauge their spending habits, from how many purchases and ATM withdrawals they make per month, to how often they check their account balance, and whether they’re looking for a card that works like a checking account. (See the dangers of using prepaid cards.)
Once the information is in, the site offers a list of personalised recommendations for cards graded on a scale of A to F based on terms, fees and consumer friendliness.
Users also get a snapshot of total fees with descriptions of the cards’ perks and drawbacks. For example, the Western Union Gold Visa has no transaction, activation or monthly fees, but slaps users with a $1.95 ATM fee. “Possibly more than anything we’ve covered, (prepaid debit cards) are really hard to understand and are not really well-regulated,” said Anisha Sekar, NerdWallet’s vice president of credit and debit products. “Prepaid debit cards don’t necessarily do what we think they do, and we’re really hopeful that we can bring transparency and personalisation to a field that desperately needs it.”
The team, which conceived and launched the site just three weeks ago, test-drove a bunch of the prepaid cards to see how they work from a consumer’s perspective.
“They were kind of difficult to use and we kept getting hit with fees,” said Sekar, who found the cards difficult to compare with each other and checking accounts.
She also found they were rife with fees: An average prepaid card costs nearly $300 a year in basic fees, she said, and that’s before activation, cancellation, check deposits and other costs even come into play.
“The fees depend so much on the individual’s use,” said Sekar, “so we wanted to the site to pull together all those abstract concepts.”
NerdWallet’s prepaid card databse is growing day-by-day, and includes popular cards like the Western Union Gold Visa and Suze Orman’s Approved card, which has been in the news a lot lately.
“We wanted to go beyond a list of static terms and disclosures and show what you’ll pay for personally,” said Sekar. “This is something that is near and dear to us.”