When prepaid cards make sense

By Marcie Geffner - Bankrate.com

Prepaid debit cards have gotten a bad rap and with good reason. No doubt the cards are convenient, but high fees make them a controversial choice for anyone who has access to a checking account and the self-discipline to avoid overdrafts.

Yet the use of prepaid cards is on the rise, increasing 21.5 percent from 2006 to 2009, according to a Federal Reserve study of noncash payment methods.

That suggests that at least some consumers prefer to use prepaid cards rather than checks, credit cards or bank debit cards. And indeed, there are a few situations in which the benefits of a prepaid card may outweigh the disadvantages.

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