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Prepaid Credit Cards

The Federal Trade Commission (FTC) today asked for public feedback on the use of prepaid credit cards. The FAQ, with responses from major credit card providers, was a bit lengthy, but here are some of the questions the FAQ covered:

‘ Are prepaid cards safe?

‘ Is the FTC trying to downplay or minimize the dangers of using prepaid credit cards?
‘ What are some of the features of prepaid cards that qualifies them for a credit card account?
‘ Is the FTC offering reward programs for customers that are ‘unable to pay for all purchases or cash advances’?

The FTC also asked for questions about the eligibility of the prepaid card for certain credit cards that are allowed by the credit card company. Questions asked included (but are not restricted to):

‘ What is the minimum annual fee for using the prepaid cards?
‘ What are some other expenses for utilizing the prepaid cards?
‘ What type of card should a prepaid card use?
‘ Are certain prepaid card features acceptable for all users of prepaid credit cards?

The FTC also asked for information about prepaid card processing fees and how they are determined. The FAQ also includes an explanation of how consumers using prepaid cards may be subject to late fees. The FTC also wants answers about which prepaid card provider will send a customer prepaid cards (e.g., Visa, MasterCard, Discover, etc.) ‘what types of prepaid credit cards’ are eligible for reimbursement, what fees will be charged to the prepaid cards (e.g., annual fee, processing fee, processing fee-based fee), what other factors the prepaid card can provide, and how prepaid card processing is evaluated.

Background information on prepaid cards is provided by the FTC in its Annual Report. If requested, the FTC links to the reports about the characteristics, services, locations, and other information about prepaid cards that the issuers indicate.

The FTC also provided the following information about the prepaid cards:

‘ Are there annual membership fees or other associated fees?
‘ What are some of the other fees associated with the use of prepaid cards?

‘ What is the effective low or low initial transaction (AT&T only), what are some other other costs associated with the low or low transaction (e.g., annual fee, processing fee), late fees and other fees, including any and all related (in some cases, hidden) fees, you may qualify for by using a prepaid credit card.
‘ What are some of the other features of a prepaid credit card that qualify it for a credit card account?
‘ What features may help qualify customers for a prepaid credit cards?
‘ What features should be considered when comparing prepaid cards?

The FTC requests letters and phone calls from issuers, card issuers, and other issuers in order to help them develop a product that will accurately reflect the card’s features. The FTC has also requested information about the information issuers provide about the prepaid cards that it hopes to get approval for. The information requested is an electronic copy of each customer’s credit report, whether or not the card’s features are available, the annual fees charged, and the types of features, services, and other information about prepaid cards that the issuers intend to offer to qualify customers for prepaid credit cards.

As part of the ongoing investigation, the FTC conducts an ongoing privacy policy review ( This review is conducted through a mathematical model to determine the type of information the FTC believes is relevant and, if it is relevant, may be changed or disclosed. An FTC official who has reviewed an application for a prepaid credit card is not authorized to make recommendations on whether to grant access to that information unless the individual has received express written permission from the FTC. An FTC official has advised applicants and their representatives that they may ask for information from third-party sources regarding their application for a prepaid credit card.

Prepaid Credit Cards – Review The Details

Properly all banks offer Pre-Paid Credit Card services. This is because most people are definitely in that lead on pre-paid credit cards. While many institutions are well into the early stages of establishing a presence (Believe it or not, the Bank of America is in the process of establishing a presence at some point), Pre-Paid Credit Card issuers are slowly winning market share by offering prepaid cards for up to 7 to 10 months before turning the corner and charging you more.

Many financial institutions actually offer Pre-Paid credit cards to their customers. This would be a good plan for those people who are very illiquid for a credit card; then it would save them money in the process of charging them excess bills.