American Express rivals Walmart with its prepaid debit card
But American Express recently introduced a new card that’s giving the mega-retailer a run for its money.
Its American Express Prepaid Card brags about a simpler -- and less expensive -- set of fees.
You can order the AmEx prepaid card free of charge at its website and then load it either from your AmEx credit card online or by phone, from your bank account or with cash from a retailer.
Set up an online account to check the balance, view transactions and set up alerts.
The prepaid debit card also comes with some of the same perks that its traditional credit card offers, including 24/7 roadside aid, purchase protection against damages and theft, and emergency assistance while traveling.
As for fees, after your one free monthly ATM withdrawal, AmEx charges you $2 per withdrawal, on top of fees the ATM operator will charge.
But compare that to Walmart’s multiple fees: $3 for initial activation (it's free if you order online) and for each reload, a $3 monthly fee, as well as the $2 ATM fee if you don’t use a Walmart ATM.
While AmEx says it charges no other fees for reloading your card, there actually is one you’ll pay if you reload at a retailer. Green Dot, a third-party company that provides the MoneyPak card reloading service, charges $4.95 for that use, not AmEx.
So if you’re trying to avoid having a checking account, the AmEx prepaid card might not be a good fit -- loading it twice a month will cost you about $10.
Two other drawbacks: The AmEx card doesn’t yet have access to direct deposit. (Walmart does offer this crucial feature, allowing paychecks to be deposited on the cards free of charge).
And if you’re shopping with it, the card can only be used where American Express credit cards are accepted. That’s about 5 million retailers.
The Visa and MasterCard branded Walmart MoneyCard is accepted at 8 million businesses.
If you have a checking account and just want to put some extra cash on a prepaid card without all the extra fees, the AmEx card is a new option worth looking into.
But if you want to spare yourself a checking account, the Walmart MoneyCard may be a better bet, as you can have your paychecks direct-deposited, letting you avoid the $1,000 loading threshold and $3 maintenance fee every month.
If you stick to using the in-store ATMs, you can avoid all the fees and even take advantage of the card’s rewards program, a 1% discount on gas.