According to a report from Javelin Strategy & Research, more than 1 in 8 American consumers now carry reloadable prepaid cards. The bigger picture is the fact that this reflects an increase of 18 percent over the number of US adults using prepaid cards in 2011. These cards are now being used by a variety of users and for a variety of reasons.

One reason for this shift may be partly due to the rise in bank fees on checking accounts (21 percent higher than six years ago) as well as fees linked to traditional credit and debit cards. In an effort to find an alternative to these high fees, many are looking at other options. Looking through the long list of prepaid cards now available can be time consuming, but you will need to closely compare the fee structure of each card to determine which one is best for you. You will see products offered by names you don’t recognize and by big names such as American Express, U.S. Bank, and on and on.

The prepaid card has become an acceptable – even desirable – way to manage your finances. You can’t spend what you don’t have and with prepaid cards you only have access to what you have deposited onto the card. This is an appealing concept to anyone who is trying to recover from debt or wanting to stay out of trouble. This is also a great way for parents to remotely add funds to cards for their kids who are away from home.

Although prepaid cards are clearly on the rise, many people still don’t know what they are and how to use them. But thanks to massive advertising and improved features, the stigma of the prepaid card being “for someone else” is fading away.

To help we’ve put this article together that illustrates some of the 4 Key Differences Between Prepaid Accounts and Checking Accounts.

You can get a secured credit card, become an authorized user, or get a co-signer. Here are the details on each option:

Secured Credit Card

A secured credit card is a great way to establish (or even rebuild) your credit history. It functions just like a traditional credit card, except that you are required to put down a security deposit. The account is in your name and you must make payments on the account each month, just like you would with a regular credit card. The card company holds onto your security deposit to ensure you don’t default on the account. Eventually, you will receive your deposit back and establish a credit history for yourself. Be sure to ONLY go with a card that reports your credit history to 1 of the 3 major credit bureaus.

Become An Authorized User

A nice little “trick” to get some quick credit history is to have someone add you onto one of there existing accounts. For example, if you have a parent that has had a credit card account with a long, solid credit history, they can add you to the account and their credit history becomes yours. It almost sounds too good to be true, but that’s how it works. Just be sure you’re being added to an account that has a great credit history. You don’t want to be added to an account that has a history of late payments or a history of exceeding the credit limit.

Get A Co-Signer

When it was time to buy my first car I found myself in this situation. I made good money, but I had no credit history. I couldn’t get approved for the loan even though I made more than enough money to cover the car note each month. My solution was to get a co-signer and it worked. It also helped me build my own credit so next time around I was able to get approved on my own.

We all know by now that a strong credit history is essential to your financial well-being. Starting off on the right foot when you are young, by establishing good credit, will put you on a path to achieve your financial goal. Try using some of the tips we’ve discussed to establish credit for yourself. If there are other great tips out there please share your experiences with us.

Photo Credit: soonerpa via Flickr

There are ways around not having a traditional savings account, but most of the choices don’t make good financial sense. For instance, check cashing services charge high fees in the form of a percentage of your check. Keeping cash on hand allows for theft and certainly gives you overly easy access to the sum total of your available cash. Even paying bills when you only have cash becomes expensive with the cost of money orders and bill paying services.

That brings us back to the subject at hand — why you should have a savings account. Don’t you have things you want to do, places you want to go and purchases (big and small) you want to make? Saving money is the first step to planning for and achieving these goals.

Reasons You Should Save

It’s good to have more than one account for these goals. For instance, ideally you should have a retirement account, a college fund, and an emergency fund. But for now let’s look at why NOT having a savings account will cost you dearly.

Negative Results of Not Having A Savings Account

This is clearly not a smart approach to your personal finances.

Prepaid Cards with Savings Accounts

Prepaid cards are a great option for those who want to steer clear of the big financial institutions or simply can’t get a good deal on an account. One good alternative approach to a traditional savings account is using a prepaid card account that offers a savings account. With a prepaid card you will not experience over limit fees, interest charges or late penalties like you do with a traditional credit card, and you cannot be turned down because of bad credit.

Prepaid cards do have fees and charges and you definitely have to review these charges and benefits before making a choice. One thing that does stand out, however, is the fact that you will earn considerably more on your savings than you would in a traditional bank. Many of these cards are offering a 5-6 percent APY on the entire balance or up to a specified maximum. You certainly can’t get that in a traditional savings account. You’d be lucky to get 2 percent.

Regardless of the option you choose for creating a savings account, you definitely need to get started. It is the difference between having nothing and being able to control your financial future.

These partnerships are a big score for the banks. Not only are they back in the pockets of these young spenders, but they are building relationships and loyalty with this generation. Of course it is most likely the parents that will be controlling the budget, but the parents know that the spending cannot get out of control with a prepaid card vs. a credit card. A win, win situation.

One such partnership is North Carolina State University and U.S. Bank. This fall, all incoming freshmen will be issued the Wolfpack One Card. The card will also be available to current students, faculty and staff for a purchase price of $10. According to the North Carolina State University press release, this reloadable card is backed by MasterCard.

Unlike many prepaid cards, this student ID/prepaid card combo has kept most of the fees down:

This is actually a really good deal in the world of prepaid cards. But of course these cards have to be profitable to the banks, so there are charges such as $2 fee for withdrawals at other ATMs, fees for receiving monthly paper statements, declined ATM transactions and inactivity if an account is dormant for six months. It also costs $15 to close an account and receive remaining funds via paper check, and $20 to receive a replacement card. Considering you can actually control most of these by what you do, it would be possible to limit your costs to a $15 fee should you choose to close your account. Not bad.

It is interesting that these banks are offering such an appealing product to these young students. They could get used to it. Then again, wouldn’t it be great if these features became the norm in the world of prepaid cards.

Photo Credit: Merrimack College via Flickr

Prepaid cards often get a bad wrap for having high fees and that’s because some of them do. However, there are some cards that have very low fees which make them a very useful way to manage your money. There are also some cards that have very annoying fees and that’s what we are going to cover today.

Some prepaid card fees just don’t seem fair. You can’t help but think that the card companies are trying to get every cent out of you by charging you some fees that seem down right ridiculous. The good thing is that many of these fees can be avoided if you know all the in’s and out’s of how the card works.

So here’s a look at some of the most annoying prepaid card fees:

The best way to handle fees is to fully understand them before you even apply for the card. Many of the fees can be avoided if you use the card wisely. For example, take the annoying Decline Fee – if you manage your money right and always have enough money in your account then you never have to worry about being declined. Problem solved!

As another example, the Green Dot® Gold Prepaid Visa® Card charges a monthly fee of $5.95. They will waive this fee, however, each month you either make 30 transactions per month with your card or deposit at least $1,000 into your account. This works great for someone who plans to use the card a lot or has their paycheck automatically deposited into their account.

The Green Dot® Gold Prepaid Visa® is a low fee card. Check out the card details to see if it works for you:

• $0 Activation Online – with no credit check
• Access over 18,000 MoneyPass® ATM’s
• Get a $4.95 credit on your first MoneyPak cash load (see site for restrictions)
• No Monthly fee for any month with at least 30 purchases
• No Transaction fees on US purchases
• No Overdraft fees
• No Minimum balance required

For more information, take a look at our Green Dot® Gold Prepaid Visa® Review.

Photo Credit: leodelrosa via Flickr

One thing I like about this card is that it gives the option of a savings account. For those that don’t have a traditional bank account this might be just want you need to start saving some money. Here are some of the perks of the card:

Adding Money

There are basically three ways you can add money to your card. You can sign up for direct deposit, add money by purchasing a Green Dot® MoneyPak® or by transferring money from your bank or PayPal™ account. Here are the details:

Savings Account

One unique feature of this card is that it offers a savings account so their cardholders have a safe place to save money. We are starting to see more and more prepaid cards offer such perks. The Union Plus savings account comes with 5.10% APY. You get this APY on the first $5,000 you deposit into your account, anything above $5,000 earns .10%.

Card Fees

The most important part of any prepaid card are the fees and this card calls itself a “Low Fee” card. So let’s take a look and see if the fees are really low.

Overall, I would say this card is correctly labeled as a Low Fee Prepaid Card. One thing I like about the card is the monthly fee of $2 is waived when you deposit $500 in the account the previous month. I think $500 is a reasonable amount and $2 bucks is a low fee anyway. The one thing I would caution users on is the ATM Fee of $1.50 per withdraw. If you use the ATM often then this fee could quickly add up. If you want a card that doesn’t charge an ATM withdraw then consider the Green Dot MasterCard of Visa.

I like the GreenDot cards because you can make ATM withdraws from certain ATM’s without a fee. This is perfect if you make a good deal of ATM withdraws because those fees can get costly. Consider the Green Dot® Gold Prepaid Visa® Card or the Green Dot® Prepaid MasterCard® as your card of choice. The Green Dot cards also give you an option for avoiding their monthly fee when you make 30 or more purchases with the card.

Apply for the Union Plus Prepaid Card

You can easily apply for the Union Plus Prepaid Card online by completing an online application. You do have to productive all your personal information including your social security number. To get you started we have provided you with the link below.

Apply for the Union Plus Prepaid Card by visiting the Union Plus website.

Here’s a look at some of the Prepaid Cards that offer Savings Accounts:

Mango Money Prepaid MasterCard

The Mango Money Prepaid MasterCard gets high ratings because it has low fees and a savings account that offers 6% APY. A savings account that offers 6% APY is unheard of. There is a catch though, the 6% is on the first $5,000 which means you can earn $300. After you have $5,000 saved, then you will get 0.10%. Here are the details of the card:

Union Plus Prepaid Card

The Union Plus Prepaid Card offers their cardmembers a high yielding savings account. Customers enrolled in recurring direct deposit can get a savings account. There is no cost to open a savings account and no fees to maintain it. This card hasn’t been around long, but there has been much talk about the savings account that earns 5.10% APY.

Why Should You Have A Savings Account?

Saving money is something that everyone should do. Even if you can only save 5 bucks each month you should save it. Having a savings account is one of the most basic tools you should have in your financial portfolio. There are always unexpected events that take place in life and having a savings account can keep you from breaking the bank (no pun intended).

A savings account gives you a safe place to save your money and keep your money separate from your other accounts. But, beyond that, a savings account can earn you money too. The reason is because most savings account pay interest on the money in your account. The trick is to find a savings account that pays a high amount. The APY (Annual Percentage Yield) is the amount the account pays the account holder. Here are a few questions you should consider when choosing a savings account.

Earning Points with your Card

How to Redeem 1-2-3 REWARDS

Once you earn $1,000 points you get $5 off in groceries. 1-2-3 REWARDS coupons are earned and delivered to you monthly. To use your coupons, scan the bar code on the back of your Personalized Card when making purchases in our stores. Coupons can only be redeemed at a participating Kroger Family of Stores location. Your cashier will remind you when you have coupons available.

How To Add Money

You have to add money to the card before you can make a purchase. There are three ways to add money: with cash at a checkout lane, direct deposit, and a ReCharge Card™. Here are all the details:

Card Fees

It’s always important to take a good look at the card fees. Many prepaid cards have high fees so you have to review the fees and make sure they fit your spending habits. Overall, I don’t think the fees for this card are too bad. Let’s take a look.

There are 3 main fees to be concerned with – Monthly Maintenance Fee, Cash Reloads and ATM Withdraw.

Since you can avoid the cash reload fee, the fee I would focus on is the ATM withdraw fee. If you know you are going to make several withdraws then I would not suggest this card. This fee can add up and before you know it you will be spending too much on card fees.

If you plan on making a good deal of ATM withdraws you should consider one of the Green Dot Prepaid Cards. You can choose from either the Green Dot® Gold Prepaid Visa® Card or the Green Dot® Prepaid MasterCard®. I’ve used this card and it’s great for making ATM withdraws because they are free at certain ATM’s. The Green Dot cards also give you an option for avoiding their monthly fee when you make 30 or more purchases with the card.

Overall, the fees for the Visa® Prepaid Debit Card with 1-2-3 REWARDS® aren’t that bad (if you don’t make ATM withdraws). Even the $3 month fee might be worth it because of the rewards you earn. It all depends on how you use the card. To see a complete list of the card fees click here.

Apply for the Visa® Prepaid Debit Card with 1-2-3 REWARDS®

Anyone can apply for this card regardless of credit history. You just have to fill out an online application. Be prepaid to provide all your personal information such as your social security number.

When choosing a card be sure to consider all factors of the card, like the card fees. Some cards have very high fees that could outweigh the benefits of any rewards program. To get you started we have created a list of prepaid cards that offer rewards programs. Take a look and compare the fees of each card. To get some tips on how to choose a prepaid card check out 5 Questions To Ask When You Are Choosing A Prepaid Card.

Here are the Best Prepaid Cards with Rewards:

SmartyPig Cash Rewards MasterCard

The SmartyPig Cash Rewards MasterCard now gives 1% cash back on all your purchases. That’s right, cash back! There aren’t many prepaid cards that are handing out cold, hard, cash, so take advantage of it. Here are some of the details:

AccountNow® Prepaid MasterCard®

The AccountNow® Prepaid MasterCard® you can earn cash when you use your AccountNow card at the places listed in your active offers. To find out what your offers are, you just log into you online account. When you make purchases at those places you earn rewards. There is no limit on how much cash back you can earn. The more you use your card, the more you can earn. You can also get this same card in a Visa, the AccountNow® Prepaid Visa® Card. Here’s what you get with the cards:

Jump Card Visa® Prepaid Card

The Jump Card Visa® Prepaid Card allows card holders to earn rewards points for every $1 made in purchases. The card offers special bonuses just for signing up for direct deposit and making deposits. You can get 2,500 bonus points for signing up for direct deposit and an additional 750 points for every deposit of $750 or more. Here are some of the perks: