Prepaid cards can be a good alternative to traditional banking

The reluctance of consumers to rely on alternative credit has been an issue for some businesses. In particular, prepaid cards have come under fire ever since The New York Times recently published an article criticizing the fees associated with them. According to the source, these cards can significantly reduce employees' paychecks by charging users every time a transaction is made, or when the card isn't used at all.

But while The New York Times report may apply to some cards, a recent Consumer Reports study found that a number of prepaid cards offer services similar to their traditional counterparts. Walmart's Bluebird, H&R Block's Emerald Prepaid MasterCard and Green Dot ranked as the top three cards, with this group possessing functionality on par with debit cards. The report also found that they have very few unavoidable fees attached to their use.

Greater visibility leads to higher rankings

Another reason for why these cards were ranked so highly is that they offer transparency for their fee structure. The source noted that they feature websites detailing their use and that transaction information is usually available with one click. Part of the hesitance that some consumers or even businesses may have in adopting alternative credit or payment options like ACH cards is that they don't know how they work. Even a steep fee structure can be acceptable when people are familiar with it system, as they can better plan and manage their purchases or repayment schedule.

A recent USA Today article noted that consumers currently have difficulty researching prepaid cards, as many do not provide sufficient information about their services. For businesses that want to make use of these cards, fully detailing advantages and restrictions can help make their offerings stand out from more opaque competitors.

As with any industry, there will always be a few bad actors, but they should not be assumed to represent the entire sector. In the case of prepaid cards, this occasionally maligned payment method can actually be a superior option to more mainstream services. USA Today highlighted that these cards are often a better choice than cashing a check, which can hit consumers with a considerable use charge.