That’s the question I’m asking readers after writing a column about the hefty fees on these prepaid cards.
The only benefit I can see is for Internet purchases, where you worry about a retailer applying unauthorized charges to your credit card. If there’s not enough value left on a prepaid card, the transaction will be declined.
They’re expensive to buy as gifts, since there’s an up-front charge of about 10 per cent. Then, the recipient has to worry about monthly fees that kick in if the card isn’t used quickly. Some cards even charge a fee for reloading.
There’s another problem — using the card’s full value when stores won’t accept it for partial payments on higher-value purchases.
I asked Jean-Marc Handfield of Vancity about the logistics of getting every penny from the card. Here’s his response.
A solution that will allow prepaid cardholders to use all of the balance on their cards is to request that the retailer do a â€˜split transaction.â€™
A split transaction requires that the cardholder knows the balance on the card. This information can be obtained by contacting our cardholder reporting website or customer service telephone line.
As the cardholder, you can advise the merchant what your remaining balance is â€“ for example, $6.25 â€“ and tell the merchant to take $6.25 from this card and youâ€™ll pay the remainder by another method.
Please note that not all merchants can accept two forms of payment for one purchase due to their systems limitation, but this split payment is common in large retailers such as grocery and drug stores.
Handfield said the information about how to make a purchase that is larger than the value of the card is included in the Frequently Asked Questions section of the cardâ€™s packaging.
I sent his response to all the readers who suspected a plot to recover a few cents extra on every prepaid Visa card. Many were still dissatisfied.
I’m posting a few opinions below and want to hear your thoughts. Should the federal government impose rules on the card issuers, instead of just warning buyers about possible problems, as the Financial Consumer Agency does here?