bank rates

Are All Prepaid Debit Cards Bad?

Prepaid debit cards get their fair share of negative press.

The Rush Card charges high feesMost prepaid cards include ridiculously high fees while providing no benefits to consumers. But grouping all prepaid credit cards under the “bad” moniker is not wise, because there are a few that actually provide benefits and security, for next to nothing.

The Mango MasterCard Prepaid Card allows you to earn money on your depositThe truly bad include the Rush Card, while the good include Mango MasterCard Prepaid Card, which actually allows consumers to earn a high interest rate on money they deposit.

Russell Simmons, master entrepreneur, markets the Rush Card as a way for consumers to make everyday purchases, without owning a credit card or bank account.

True, the Rush Card accomplishes this. However, it does so by taking every penny it can from its owner.

According to the Rush Card schedule of fees, consumers are on the hook for:

  • An activation fee of up to $14.95
  • A monthly fee of up to $9.95
  • Transaction fees of $1 per purchase, up to $10 per month
  • A maintenance fee of up to $1.95 a month

At a minimum, you can expect to spend more than $100 each year just to use Rush Card, making this the worst prepaid card on the market today.

On the other hand, the Mango MasterCard Prepaid Card does a fantastic job of helping consumers, rather than taking from them.

This card has only one advertised fee, a $5 monthly fee, which is waived as long as you deposit at least $500 on the card the previous month. That may sound like a lot, but after gas and groceries, you’re almost there.

Not only could the Mango Card be considered a fee-free prepaid card, but it also provides a super high 5.01% APY if you deposit money in Mango Savings.

The only prepaid card to offer a high return, the Mango Card offers more than three times the interest rate of the best online savings account.

The yield applies to balances of $5,000 or less. Above that, and the account pays 0.10%.

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Comments (3)
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3 Existing Comments
  1. Serge Milman said:
    on March 22nd at 06:23 pm

    Still not clear why one would choose Mango Card or any other prepaid card over a checking account with debit card? Many banks offer free checking accounts (as long as you agree to rely on online / ATM services only – which is similar to the offering of prepaid cards) and have the added convenience of bill-pay and other services.

  2. Dan said:
    on March 27th at 12:48 am

    Serge look up Chex Systems, Telecheck and Early Warning Systems.

    Also because of new rules many banks are no longer offering free accounts and most of the decent prepaid bank accounts offer bill pay.

    The one thing they don’t offer is stacking transactions to maximize overdraft fees because there are no overdrafts possible. Even with opting out banks do the same thing.

  3. Dan said:
    on March 27th at 12:56 am

    BB&T (one of the owners of Early Warning Systems) now has a prepaid account available with all the perks of an account except checks & overdrafts.

    While there is a monthly fee of $5 or $10 depending on the amount you deposit monthly the free deposits and free ATM usage is a big advantage over prepaid cards if someone needs to deposit cash etc.

    Wells Fargo, Chase, Cutbank, PNC and Bank of America should be out with similar accounts within a few months. The second tier banks will follow with lower or no monthly fee and so will credit unions.

    People who have trouble managing overdrafts will have a convenient way to handle their cash.