New Rules For Prepaid Debit Cards

April 2, 2019

© Zentilia Dreamstime

Although April 1st is known as the day of practical jokes, the Federal government enacted some serious reforms regarding prepaid debit cards and person-to-person payment services, such as Venmo. Reforms under the Consumer Financial Protection Bureau aim to offer the same protections offered on debit cards drawn on a personal bank account. Prepaid cards issued on April 1 and thereafter will have clear disclosures of key fees on the outside packaging so that consumers can see the usually "hidden fees" and compare cards before they buy. Other features include protection from unauthorized errors and charges. As with debit cards, you won't be liable for more than $50, assuming you report the problem to the card issuer within two days of discovering it. Basic account information, such as account balances by telephone and transaction information inquiries online, will not be charged a fee. New limits on how overdraft fees are handled and clear information if the prepaid card is covered under the Federal Deposit Insurance Corporation coverage (FDIC). Most but not all prepaid accounts offer FDIC insurance once you register them, according to the National Consumer Law Center. However it is vitally important if you purchase or have a prepaid debit card to register it before using in order for these new rules apply to your card. Go on the issuer's website to do so. That will activate all the protections that the new rule provides.

RELATED: The Benefits Of Using Credit Instead Of Debit When Shopping

RELATED: This app stops you from using your debit card

RELATED: How To Use Your Smartphone To Detect Credit Card Skimmers

SOURCE: Consumer Reports

See and hear more from the 98.5 KTK Morning Show

98.5 KTK Morning Show Podcast