American Express has entered the prepaid card market with its own prepaid reloadable card. Refreshingly the company does not refer to the card as a prepaid debit or credit card, a misleading term used by other providers for prepaid cards which essentially charge the consumer to use their own money. The new Amex prepaid card is the most transparent one on the market. It offers typical Amex benefits and best of all is not loaded with unnecessary fees. The drawback is it can only be used where American Express is accepted.
Prepaid cards are now the most popular type of plastic in the U.S. with the market rapidly increasing each year. Users who fail to keep track of their finances benefit by not incurring overdraft charges and high interest rates, but on the downside they fail to report to the three main credit reporting agencies thus offer little in the way of establishing credit. The American Express prepaid card can be purchased by those aged 18 or above on behalf of users aged 13 or more, making it a convenient way for parents to provide spending power for teenagers.
The major benefit of the card is the lack of the majority of typical prepaid card fees. There is no purchase cost, no activation fee, no monthly fees, or any of the other hidden fees which give prepaid cards a bad name. Loading fees are free provided the card is loaded from a bank account or an American Express credit card. However cash loads cost the price of a MoneyPak fee, a popular option provided for cash loads issued by GreenDot. The Amex prepaid has a current offer which refunds the first MoneyPak purchase fee.
The only major fee is that for ATM cash withdrawals at $2 per withdrawal. Additionally card holders will as always be liable for any fees incurred by an ATM provider outside the Amex network. Cardholders are entitled to one free ATM withdrawal per calendar month. Balances can be checked online for free, or by telephoning customer services. Additionally cardholders can sign up for email alerts. If the card is lost or stolen American Express will issue a new card at no cost and transfer any remaining card funds across to the new card.
Cardholders also qualify for Amex perks. Purchase protection covers theft and accidental damage or purchases for 90 days, limited to $1000 per occurrence. Cardholders are also eligible for Amex roadside assistance and Global assistance, but are responsible for any costs incurred through using these services. As a prepaid card it cannot be used to make a car rental reservation or to pay the deposit.
The American Express prepaid card is one well worth current prepaid card holders switching too, in the light of many complaints regarding the charges levied by other prepaid providers. With no hidden fees to be surprised by Amex is making a bold move which should present a very competitive challenge to other prepaid cards.