New pre-paid debit card is good for consumers

HOUSTON Debit cards used to be free, but now some banks require you to maintain a large balance to get that perk or face charges of more than $100 per year. Now there is a new debit card coming out that may be an option for those who have dumped their debit card.

It's not hard to find people who do not like the changes they've seen with debit cards.

Card user Darrell Dotson said, "The fees are ridiculous."

Dotson says his once-free debit card now comes with a monthly fee and the charges for using the card make it even less appealing.

"They were charging like $5 or $6 for a transaction to use a debit card and I just walked away," he said.

Dotson says he would like to ditch his debit card, and he is not alone.

Monica Russo with the Houston Better Business Bureau said, "It is not surprising that a lot of people are looking for other options."

Russo says a new pre-paid debit card offered by American Express might be an attractive alternative to traditional debit cards.

She said, "Traditionally, with pre-paid cards we have seen problems associated with the number of fees you are charged for a various number of things from activation to dormancy, statements. A lot of times in this market you were charged for those services. It does not look like that is the case with the AMEX debit card."

The American Express debit card does charge ATM fees, but there is no charge for using it to make purchases, the funds on the card do not expire, and if lost or stolen, the funds can be replaced.

Russo says she would not be surprised if other banks and card issuers begin offering similar pre-paid debit cards to consumers.

"I am sure that there are going to be other cards that are going to follow," Russo said.

Consumers we spoke with say anything that lets them keep more of their money is a good idea.

"Whatever makes people more fiscally responsible and makes it easier for the consumer, I'll be for," said card user Jeff Cancienne.

The down side to pre-paid debit cards, including the AMEX card, is that it will not help you restore your credit score or establish good credit. The AMEX card is only available online right now, but you will see it on store shelves in the next few months.

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