Jamie Forzato, wtop.com
WASHINGTON – It’s back to school time for college students and chances are, they have already been hit by a few credit card offers. But students need to be wary of another popular card that comes with heavy fees — prepaid debit cards.
More companies are pitching these cards instead because of stricter regulations on credit card marketing.
The debit cards do have perks, like quick, easy access to cash, but students should do their homework before signing up.
Rich Williams with the U.S. Public Interest Research Group tells the Wall Street Journal that although these cards can be the fastest way to pay off bills and loans, they can be pricey.
Students can rack up hundreds of dollars in fees just by activating the card and using it for deposits and withdraws.
American Express says their Campus Edition card comes with benefits, like no overdraft fees, but it does cost about $5 if you buy one at a college bookstore.
Nerdwallet.com ranked 70 prepaid card offers and listed U.S. Bank Visa Convenient Cash Card as the cheapest with $37 in fees per year.
READYdebit Visa Prepaid Card came in last with $433 in annual fees.
More colleges are also getting into the payment card industry. Students at North Carolina State, for example, can load funds onto their free student ID card, which can also be used as a debit MasterCard.
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