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Q: I was thinking about using the Wal-Mart money card instead of a regular debit card. What are the pros and cons of doing this?
A: Like all prepaid cards, Wal-Mart’s Money Card has a lot of fees. It costs a $3 initial fee, $3 to load money onto it (unless you load online or from a paycheck, in which case it is free), $2 to use an ATM, $1 to do a balance inquiry, and $3 to replace a lost or stolen card. There is also a $3 monthly maintenance fee. Furthermore, Wal-Mart is known for its poor customer service, so if you have a problem with your card, it can be a hassle to fix it.
There are some good things about the card, though. Wal-Mart is offering a program right now that offers 1% cash back on gas purchases (you must enroll in the program in order to receive the cash back). It is also FDIC insured, and has no minimum balance requirements. The initial load amount is reasonable, too: only $20.
Compared to other prepaid debit cards, Wal-Mart’s is pretty good. It has one of the lowest monthly fees and no overdraft fees. If you keep track of your balance and don’t use ATMs often, it may be one of the best prepaid cards. However, prepaid cards in general have a lot of fees. It is often better to use a debit card or even cash. The only time prepaid cards are recommended is when you need a card to make purchases (e.g. online shopping) and do not qualify for a credit or debit card, or if you need help sticking to a budget.