Aug 22, 2013 Dave King
Prepaid cards continue to become more popular among U.S. consumers who come from diverse demographics and backgrounds. As a result, competition has picked up with regard to creating the most successful product. Sometimes, it is best to look at the mistakes other vendors are making to ensure that the firm's offerings are superior.
The Sheboygan Press recently listed some of the more common types of fees that will turn consumers away from prepaid cards. According to the news provider, the first thing a potential user will look at is the purchase fee, which is a one-time charge that can either be high or low depending on the vendor's decisions.
Keeping this cost low will be a good first step. Prepaid card providers could also consider making some form of special offering for those who use the card regularly, such as refunding part or all of the purchasing fee down the road. The source explained that activation fees and monthly maintenance fees are also relatively popular among providers.
Rolling the activation fee into the purchase fee might also help, especially from a marketing perspective. The fewer charges a card comes with, the more likely a consumer will be to use it frequently. As for maintenance fees, the Sheboygan Press noted that several major vendors of these products will wave the costs when the user has a direct deposit account in play.
The news provider added that withdrawal, inactivity, purchase and overdraft fees can be found among prepaid cards. However, these should be avoided at all costs to make a superior product.
Studies indicate that the most common users of prepaid cards are those who either do not want to deal with traditional bank accounts, or have lost their taste for financial institutions in general. For this reason, vendors should always work to separate prepaid card products from traditional checking and credit card accounts as much as possible.