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COMMENTARY I can honestly say I have never in my life owned a debit card. I know a lot of people use them instead of credit cards, and they really are more like cash. But I am addicted to the "points" that credit cards offer. And because I always pay my balance in full at the end of the month, it's like the credit card company is paying me to use their card.
And now that Wells Fargo is testing a $3 monthly fee to use their debit card, I'm even happier with my decision. But the problem is, there are some people who have to use a debit card and don't qualify for credit cards, like my 16-year-old son. I don't want him carrying around a wad of cash for gas and sodas, so I signed up for a prepaid card through my bank. I automatically transfer money from my credit card to the account every month. That's the rub: this monthly transfer costs me $2.50 each time.
How to Avoid Getting Hit with Debit Card/Prepaid Card Fees:
Ask questions. Nowhere on the prepaid card website could I find information on transaction fees. I finally figured out I was charged $2.50 when I got my credit card bill. I'm sure it was there somewhere, but not anyplace very obvious. So find out from the bank exactly what the fees will be ahead of time.
Consider a Credit Card Instead of a Debit or Prepaid Card:
Obviously, with my teenage son, I can't. But in a lot of cases it just makes more sense to open a credit card (unless you are going to carry a balance every month.) But if you pay your bill in full every 30 days, you get a lot of perks, including cash back in some cases, an easier way to dispute a purchase, and a way to improve your credit rating (if you handle it right.)
Even if you do get stuck with a fee and there's no way around it, as in my case, at least if you ask questions up front, it won't be a surprise. I know, the credit card companies have to figure out a way to make money now that the Federal Reserve has imposed new regulations . But it seems to me the merchants are being charged every time they accept someone's card. Isn't that enough?
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