1. Activation fee
The activation fee is as it sounds—it’s an initial charge to activate and set up your card. Typically this is a flat fee somewhere in the neighborhood of $10 to $30 per card.
Tips to avoid paying: Check to see whether the activation fee is assessed if you purchase the prepaid card online instead of in the store. Also, carefully price compare activation fees—if you do have to pay a fee, the lower the fee, the better!
2. Customer-service fee
A customer-service fee may cover anything from providing you with a transaction history or a monthly statement, to taking your call over the phone or answering your email.
Tips to avoid paying: Not all prepaid cards charge for customer service, so research carefully. Also, some merchants charge only for customer service needs that can’t be fulfilled online using the merchant's website.
3. Minimum-balance fee
This fee will be charged if your balance falls below the agreed-upon card minimum.
Tips to avoid paying: Here, fee avoidance is simple—never let your card balance drop below the required minimum.
4. Overdraft fee
Typically, the prepaid-card merchant is only allowed to hit you with an overdraft fee if you have previously provided authorization that allows you to charge over your prepaid-card limit.
Tips to avoid paying: Don’t authorize the merchant to permit you to overcharge your card.
5. Statement fee
This fee is levied for providing you with a copy of your monthly statement.
Tips to avoid paying: Find out if you can use the bank’s website to get your paperless statement and avoid paying this fee.
6. Monthly fee
This fee is assessed on a monthly basis whether you elect to use the card or not.
Tips to avoid paying: Some merchants are now waiving monthly fees if the cardholder uses direct deposit or keeps a minimum balance. Read the fine print before activating your new prepaid card.
7. Per-use fee
A per-use fee is a fee charged every time you use your card. Essentially, you’ll be paying for the privilege of using your prepaid card. This isn’t an industry standard fee (as of yet), but some merchants are getting away with it.
Tips to avoid paying: Be sure to just say no to any card that charges a per-use fee (also called a point-of-sale fee). Some merchants charge a per-use fee for debit card transactions only—the reason being, it costs the card merchant more in fees to process your transaction as a debit rather than a credit transaction. So if your card is both a debit and credit card, wherever possible, use the credit option for transactions.
8. Inactivity fee
Also often called a dormancy fee, this fee relates to permitting your card to go unused for a period of time (typically between 90 and 180 days). This fee will be assessed monthly until you use your card again, so if you don't catch it early, you could end up paying for months.
Tips to avoid paying: Be sure you know the merchant's policy regarding inactivity. Also, dormancy fees can vary from $1 to $6 or more, so be sure that if you have to pay, you pick the lowest possible fee.
9. Reloading fee
Because the nature of a prepaid card is that you’ll eventually run the balance down, you’ll eventually also need to reload your card or add more money to it. When this occurs, you can assume—unless otherwise informed—that the merchant will charge a reloading fee.
Tips to avoid paying: Check and find out what the policy says about reloading your card. This is a common fee, but with some hunting around you may be able to find a merchant who a) doesn't charge to reload, or b) has a special offer for other services (such as setting up direct deposit or a checking account) that can waive the reloading fee.
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