Recently I’ve seen a few stories like this one in the New York Times: Prepaid, but Not Prepared for Debit Card Fees. In the article, author Andrew Martin explores the numerous fees many card companies are charging their customers. The moral of this story from my perspective is that it pays to shop around. Not all prepaid debit cards are alike.

Avoid buying a prepaid debit card. We advise consumers wanting a prepaid debit card to get a payroll debit card instead. Consumers can get a payroll debit card from their employer or sign up directly with a payroll card provider (for example online at http://vantagecard.com/paycard) and then simply provide the card’s routing number and account number to their employer for direct deposit.

Payroll cards have lower costs than prepaid debit cards sold in a retail environment and consumers can eliminate some and greatly reduce many of the fees outlined in the New York Times article. Choose a payroll card that can be used across multiple employers and one that allows a card reload through the Visa ReadyLink service.

Consumers are also advised to learn how to avoid fees. For instance, getting cash back at the grocery store (selecting a paycard that does not charge for PIN debit transactions) is a strategy that can be used to avoid ATM fees. Or choose free online statements instead of having billing statements mailed (no charge and better for the environment). We publish a “best practices” guide for cardholders to help them learn to eliminate fees while encouraging unlimited free card purchases and recurring bill payments.

Another benefit of a reloadable payroll debit card is that consumers can use the routing and account number to set up auto draft ACH for recurring car payments or rent directly from their paycard account.

Prepaid debit cards appeal to many people for many different reasons, with some 80 million consumers driving a growing demand. But it is important to be an educated consumer. Shop smart and save on unnecessary fees and enjoy all the benefits and conveniences of card payments.

Shopping for a prepaid debit card? Compare costs and read the terms & conditions of our Platinum Pay Visa debit payroll card.