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Corporate American Robbing from the Lower Class with Prepaid Credit Cards

Updated on March 26, 2010

Prepaid Visa Credit Cards are Ripping Off the Poor

Prepaid credit cards are marketed as a reasonable alternative to the poor and lower income classes. The premise is that if you purchase a prepaid card it’s a good way to establish credit so you can apply and get approved for a REAL credit card. Unfortunately this is not generally the case.

Prepaid credit cards are marketed as if they offer the same features and protections as traditional credit cards. The prepaid card industry creates advertisements that make it seem like they are just the same using phrases like “no hidden fees”. The only real similarities are the cards look about the same.

Green Dot, one of the largest prepaid card issuers does not even report your purchases to a credit bureau… so it’s impossible for you to generate a credit history with their card. Yet people who bought into their deception spent over $4 Billion with their cards in 2008.

Why would anyone use a Prepaid Card when they:

  • Charge high fees, that are often multiplied or recurring each month
  • Offer little protection against theft if the card is stolen
  • Overstate or deceive about the ability for you to “build” credit

They are just a scam on the poor. You are giving your money away if you use one. You are essentially paying a large company outrageous fees and charges to use your own cash. In the meantime they are banking the interest on the balances in your account.

Again Why are People Buying into the Prepaid Credit Card Industry Lies?

Do these people just have money to throw away or are they simply ignorant as to what they are actually buying?

Let’s talk about the fees…Wow That's some costly "Credit"!

  • Activation Fee to get the card
  • Monthly Fee to maintain the card
  • Point of Sale Transaction Fee
  • Cash Withdrawal Fee
  • Balance Inquiry Fee
  • Transaction Fees for Statements
  • Customer Service Fees if you need help
  • Bill Payment Fees
  • Fees to increase the funds in your account
  • Dormancy Fee if you don’t use your Account
  • Fees to access your funds if you close the Account
  • Overdraft and Shortage Fees

Whew… it’s just crazy! And most of these fees are not disclosed or when they are disclosed they are disclosed in a deceptive manner or in legal jargon that the average consumer can not understand. It’s deception, robbery, corporate greed!

I just completed reading a study on what it will cost the consumer to use one of these cards… I won’t go into the detail of the study… but I will summarize the study conclusions.

  • Walmart Money Card - $21.54 per month
  • Rush Card - $26.35 per month
  • Account Now Card - $31 per month

Prepaid Credit Cards and not really Credit Cards at all… they are more like Debit Cards from Hell. When you prepay for anything you are not using “credit”… so it’s a scam to call a Credit Card a Prepaid Credit Card!

Prepaid Credit Cards

Picture of a Walmart Money Card Prepaid Credit Card Packaging
Picture of a Walmart Money Card Prepaid Credit Card Packaging


Submit a Comment

  • kia31 profile image


    8 years ago from Los Angles

    Money Card is not for everybody but if you over draw your balance every month this card really makes sense. One over draft fee is going to run over $30 and with the Money Card that will never happen.

  • OpinionDuck profile image


    8 years ago


    Great hub and the credit card companies have the full support of Congress to be legal loan sharks.

  • Pamela99 profile image

    Pamela Oglesby 

    8 years ago from Sunny Florida

    Excellent hub.

  • Ben Zoltak profile image

    Ben Zoltak 

    9 years ago from Lake Mills, Jefferson County, Wisconsin USA

    Wow, way to go Mike! Who knew! Glad I never fell for any prepaid scams, I have enough trouble with the lousy card I have already! Good to hear writers speaking up for the ignorant or uneducated. Great article.


  • ehern33 profile image


    9 years ago

    Very interesting. Always read the fine print like you said and may as well use your ATM card for purchases. That way the money is still in your account.


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