Five Interesting Facts about Prepaid Cards

Card accounts with with direct deposit remain open much longer than those where it is not set up on the account. The Federal Reserve says that a card opened at a retail store with direct deposit is used for 385 days, on average. When the card is never enabled with direct deposit, the average length of time was just sixty days. Those cards had almost 40 times more load volume, as well. Everyone wins with direct deposit. Consumers save money and the card companies make more money, too.

People use ATMs frequently: Depending upon where the card is bought, account holders go to an ATM between three and six times per month.

Only 20 percent of ATM transactions take place at an in-network ATM.

Most purchase are for basic, everyday goods: People use the cards to buy gas, go out to a restaurant, or get groceries. Sounds like prepaid card holders are no different than people with a regular checking account. On the other hand, this shows the lack of flexibility with the cards. See the next fact….

Almost two in five users say they would like to set up a recurring payment on their card. People don’t want to just make purchases at the point-of-sale. They want to pay their cable or cell phone bill automatically every month. It is unfortunate that the Federal Reserve will not let big banks (more than $10 billion in assets) offer this function.