Prepaid debits cards are a fast-growing industry.
In 2009, Americans loaded more than $25 billion onto them. And, in 2013, that number is set to explode -- to more than $200 billion.
The reason is simple: convenience.
Buy a prepaid debit card at a convenience store or online, and you can take out cash at any ATM -- and there's no bank account attached.
That means, no overdraft fees or out-of-network ATM fees. And, according to a new study by the Pew Research Center , prepaid cards can be cheaper for some Americans – especially, if you overdraw often.
Customers who use prepaid cards say they help them stay on a budget since you can only spend as much as you load onto the card. They also say prepaid cards help them avoid racking up debt like they can with credit cards.
And, if you’re a parent who wants to give your kids money without giving them access to your bank account, this could work for you.
But, if you do decide to get a prepaid card, be careful. The Pew study warns that there are some serious risks .
The Consumer Financial Protection Bureau is getting ready to put out some rules to guide this industry, Pew reports. It’s a move they think is necessary to protect consumers who use prepaid cards. When they do, we’ll bring you that information.
Copyright 2012 Scripps Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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