American Express (AMEX) Prepaid Debit Card Review
American Express (AMEX) Prepaid Debit Card Review
According the their official website, the American Express Prepaid Card is a “prepaid, reloadable card that gives you a safe and easy way to manage spending for yourself or the people you choose”. Some people have been pretty surprised to see American Express enter the prepaid debit card arena, but really it’s not that surprising. In spite of their bad reputation among financial analysts, who peg them as a high-fee alternative to debit or credit cards for consumers who can’t get a checking account, they have been growing at a tremendous pace. Now it seems the product is coming of age, because the AMEX prepaid debit card is an option that has fewer fees than the typical prepaid card.
As mentioned earlier, this is a growing field: according to the Mercator Advisory Group, Americans will put an estimated $70.7 billion on reloadable prepaid cards this year, up 153 percent from the $28 billion loaded onto such cards in 2009. Part of it is due to the recession: a lot of people who previously had bank accounts have seen those accounts closed and their information reported to ChexSystems. Another reason is that customers are increasingly fed up with banks’ overdraft fees. Ally Bank’s overdraft policy is one of the major reasons why they’re growing rapidly, even though they have no physical branches.
Pros
The AMEX prepaid debit card is being billed as a great alternative for those fed up with their current debit or credit cards. The card sets itself apart from the rest of the reloadable prepaid debit market by having no activation fees, no transaction fees and no monthly maintenance fees. Every card comes with one monthly free ATM withdrawal, and subsequent withdrawals are $2 each. Consumers with a bank account can load the card for no charge; you can also load the card using an existing American Express credit card. Compare that to competitors’ cards, which usually come with a laundry list of fees, including those for monthly or annual maintenance, reloading, usage, replacement cards, and even calling customer service.
Cons
If you don’t have a bank account nor an Amex credit card, your only loading option is the Green Dot MoneyPak, which retails for $4.95. In comparison, most other prepaid cards allow users to deposit their paychecks for free. This is the biggest, but most significant knock against the card, because prepaid debit cards, as a rule, are created for and marketed to the unbanked population. People with a bank account have no need for this prepaid card; similarly, it makes little sense for people with an American Express credit card to use this card. So basically the target market that would need this card will have to pay to load the card with cash, and would therefore be better off with any number of other prepaid cards.
Verdict
Apparently, American Express hopes to offer direct deposit later this year, but until they do, most consumers should consider alternatives such as
- Ace Elite Prepaid Debit Card
- Vision Prepaid Visa Card
- NetSpend Debit Card
- Western Union Reloadable Debit Card
- Excella Visa Prepaid Debit Card
- Rush Card