Squeezing pennies: Big profits from pre-paid debit cards, payday loans -- DailyFinance

Squeezing pennies: Big profits from pre-paid debit cards, payday loans -- DailyFinance: "What is a pre-paid debit card? The New York Times reports Tuesday that people buy them at drugstores and mass merchandisers in denominations of $25, $100 and $500. Consumers pay for the cards in stores to give them access to cash for ATM withdrawals, store purchases and ecommerce. In that way, the cards help enable commerce for a wider group of consumers.

There's just one little thing: fees. Or more specifically, lots of little fees -- for example, some cards have a $9.95 activation fee; $1.75 for each ATM withdrawal; $1 per ATM balance inquiry, 50 cents per purchase, $4 for monthly maintenance, $2 for inactivity after 60 days and $1 to call customer service. Somehow I doubt Grameen Bank charges fees like that.

This sector of the banking industry is growing fast. The Times reports that in 2008, prepaid debit purchases totaled $8.7 billion -- 125 percent more than in 2007. And by 2012, consumers are expected to purchase about $119 billion worth"

Most Popular Posts this Week...
Do you like to ski?
Help Find this missing girl!
Read this alone
The Affiliate X Factor Program
Do you want to write a book? tips and tricks on getting started.