Changes to Prepaid Credit Card Regulations to Protect Consumers
Changes are coming to prepaid credit cards — and the information issuers have to give to consumers.
The Consumer Financial Protection Bureau says the new rules will make prepaid cards more transparent for consumers.
Around 12 million people in the U.S. use prepaid credit cards at least once a month.
And these changes are made to help those users spend more responsibly.
“Until the law takes effect, there is no protection,” said Ravi Gurumurthy, who is a civil attorney in Cadillac. “If a prepaid card is lost, there is no number to call. You don’t have a bank you can call back to put a stop to it.”
Prepaid credit cards allow users to load on funds through a third party, such as a family member or employer.
Soon, new regulations for the people who issue these cards will help them know what responsibilities come with the card.
“It’s a good thing for the consumer. It’s more transparent. It’s not like the Wild Wild West where there was no rules or regulations.”
Prepaid cards would now have the same protections regular credit cards do. For example, a toll-free number that lets users call and get their account balance
“There’s going to be more transparency, more openness with what fees are associated with them, what ATM fees would be associated, interest rates and so on.”
Forest Area Credit Union in Fife Lake offers prepaid gift cards and visa cards.
Teller Nicole Gibson advises consumers to make sure they’re getting the best bang for their buck.
“I know there are options out there that have fees for everything you do. Just to check your balance inquiry it costs you 50 cents. So I think those kind of things are what consumers need to look out for,” Gibson said.
The new rules will take effect October 1, 2017 and aim to empower the people who use them.
“Gives them the knowledge, gives them the tools where they can call a live person or get those charges reversed or put a stop to those charges.”
To read all the details, follow this link.