American Express has launched a new prepaid card, one that boasts fewer fees, and one free ATM withdrawal per month. “The average prepaid card typically carries a $10 activation fee, as well as a $10 monthly maintenance fee. The AmEx prepaid card has neither of those costs, however: Instead, the company charges a $2 fee for each ATM withdrawal, with one free withdrawal each month.” With fewer fees, even the card itself is free if ordered online (it will eventually be available in stores for $4.95), and no monthly maintenance will AmEx change the future for prepaid cards?
“Most prepaid debit card users tend to be low-income, have poor credit and limited banking options. Todd Zywicki, a professor at George Mason University, says the new AmEx card could change the game.”
It’s no secret that many Americans have been with faced with some sort of economic hardship over the past few years, will this be their solution? “Prepaid-card use expanded 35 percent last year with more than 1 billion transactions.”
Now that AmEx has produced a more cost effective card, how many Americans will switch to prepaid cards?
Prepaid cards aren’t just for people who are struggling. Many parents sending their children to college could benefit from using prepaid cards instead of regular credit cards, especially now that AmEx’s new card has no maintenance fees. Who will be AmEx’s next competitor?
Kate Devery is a Social Media List Researcher at IIR USA . She studied English and Psychology at Hunter College. She also writes for various pop culture blogs. She may be reached at KDevery@IIRUSA.com
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