The New Visa Clear Prepaid Program Simplifies Prepaid Card Fees
Visa just simplified the confusing world of prepaid debit card fees. In order to help consumers avoid the complex maze of fees sometimes charged by prepaid cards, Visa recently announced a new designation for prepaid products with simple fee structures and no “gotchas.” The new set of standards, called the Visa Clear Prepaid Program, aims to make prepaid cards with simple monthly fee plans easily identifiable for the average prepaid customer.
This move comes on the heels of a recent proposal from the Consumer Financial Protection Bureau (CFPB) which called for strong, new federal protections in the prepaid market. According to the CFPB, an unprecedented surge in the use of prepaid cards (from $1 billion loaded in 2003 to $65 billion in 2012) has left consumers without the protections afforded by other means of payment, such as credit.
And it’s about time. Have you ever studied the fee plans that come with some of the most popular prepaid products? If you have, you know exactly why these new protections need to be put in place.
Even some of the most popular prepaid cards charge fees for just about anything – a fee for checking your balance, a fee for ATM withdrawals, a fee for using your card, and even fees for not using your card. The list goes on and on. And that’s all in addition to the monthly fee, which is usually somewhere between $3 and $10.
How Does the Visa Clear Prepaid Program Work?
While we wait for government action in the prepaid card market, we have Visa to thank for a “clear” alternative consumers can rely on when choosing a prepaid card for daily use – the Visa Clear Prepaid Program. Here’s how it works:
In order for a card to qualify for the Visa Clear designation, prepaid cards must offer one of two different fee structures – either a flat monthly fee that covers daily activity, or a “pay-as-you-go” plan with a per-transaction charge that is capped at a maximum amount set in advance.
The first option is aimed at consumers who use their prepaid cards as their primary means of payment, while the latter is mostly for those who use their cards less frequently. Although both options take a different approach to prepaid card fees, they both achieve the same goal – making prepaid card fees more transparent.
Here are a few other requirements for cards that hold the Visa Clear designation:
- No fees for declined transactions
- No fees for cash back at point of sale
- No fees for using customer service
- No fees for balance inquiries
- No fees for in-network ATMs
- No fees to close your account
- No overdrafts allowed
In addition to these perks, Visa Clear products will also come with protections that are usually reserved for credit cards. For example, products that earn the designation will come with Visa deposit or share insurance, e.g. FDIC or NCUSIF. Meanwhile, they will also offer VISA Zero Liability Fraud Protection, meaning you won’t be on the hook for charges you don’t make.
3 Visa Clear Cards Already On the Scene
Although the new program is just ramping up, several prepaid products are already meeting Visa’s stringent standards in order to earn the designation early. One of those products, Kaiku, offers features such as online bill-pay, direct deposit, Paypal.com and Amazon.com transfers, and more – and all for a low monthly fee of $3. And that $3 monthly fee is waived when you direct deposit $750 a month. So with direct deposit and using in-network ATMs, the Kaiku Card essentially has no fees.
All of those extra perks are nice, but it’s the fee structure that helps Kaiku qualify as Visa Clear. The card’s $3 monthly fee basically includes everything, the only exception being a $1.45 charge for use of an out-of-network ATM and fees charged by outside vendors.
Want to learn more about Kaiku? Here are the basic details:
- Monthly Maintenance Fee*: $3.00 per month (waived if you load $750 via Direct Deposit)
- Out-of-network ATM Fee: $1.45
- ATM Use at Allpoint ATMs: No Charge
- Bill Payment: No Charge
- Card Purchase: No Charge
- Card Activation: No Charge
- Card Replacement: No Charge
- Card Inactivity: No Charge
- Currency Conversion: No Charge
As you can see, the Kaiku Visa Prepaid card embodies the ideal fee structure the Visa Clear Prepaid Program is aiming for. It’s also worth noting that the Allpoint ATM network includes over 55,000 ATMs nationwide. With so many ATMs around, it should be fairly easy to avoid any “extra” charges and score all of the card’s perks for a flat fee of $3 per month (or $0 a month with a $750 Direct Deposit).
In addition to the Kaiku Visa Prepaid card, several other cards also meet Visa Clear requirements:
Prepaid Visa RUSHCARD – With the RUSHCARD, you can choose a flat-fee or pay-as-you-go plan with a monthly fee ranging from $5.95 to $7.95 per month. You then enjoy no fees for transactions, bill pay, or card to card transfers.
PNC Smart Access Prepaid Visa Card – Card opening is free with an initial $25 deposit. After that, PNC Smart Access Prepaid users can enjoy free cash reloads at any PNC branch, free cash withdrawals at PNC ATMs, and a wave of other free services. Monthly fee: $5
If you’re in the market for a prepaid card in the coming months, look for cards with the Visa Clear designation. With additional perks, added security, and fee structures that are easy to recognize and understand, they are clearly your best bet.
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