Bank at Walmart? Cheap Prepaid Debit Cards Lure the Fee-Frustrated and Unbanked

Bank at Walmart? Cheap Prepaid Debit Cards Americans feeling disenchanted (or worse) with their banks after years of ever-increasing fees are increasingly turning to an alternative financial tool provided by the world's largest retailer: the Walmart (WMT) MoneyCard.

For a flat $3-a-month fee, consumers get a prepaid debit card that they can reload at their convenience. Free direct deposit is also available, and comes with a $10 bonus. The card requires no credit check or bank account, and there's no possibility of overdraft fees, since -- as one enthusiastic user told NPR -- "You can't spend what you don't have, so you can't go over. You don't get in trouble with it."

The MoneyCard is part of Walmart's push into the financial services sector, an area where the company evidently sees a massive opening -- understandably so, given the recent outpouring of scorn for the country's big banks. Customer anger found a convenient target this fall when Bank of America (BAC) announced plans to charge depositors a monthly fee to use their debit cards for purchases, on top of overdraft and other charges frequently incurred. The backlash was intense enough to compel the giant institution to backtrack.

But if anger at large financial institutions has only recently reached a flashpoint, galvanized by the Occupy Wall Street movement, the use of prepaid debit cards has been on the rise for years: In 2009, research firm IBISWorld estimated the value of the market to be between $50 billion and $160 billion. In September 2010, Consumers Union issued a report titled Prepaid Cards: Second Tier Bank Account Substitutes, in which researchers connected consumers' decisions to switch to such cards with recession-related uncertainty. But the report also noted that prepaid debit cards were still high cost, often carried confusing fees and offered little or no protection for customers' funds.

Walmart has addressed the fee issue, at least, and is attracting significant numbers of the unbanked with its MoneyCard. The Federal Reserve estimates that 60 million Americans -- one-fifth of the country -- deal primarily in cash. An expert on the debit card market told NPR he thought there were 2 million active MoneyCards. And while Walmart did not succeed in obtaining a federal bank charter, its MoneyCenters offer a range of financial services, including affordable check cashing, options for bill payments, and overseas wire transfers, in addition to prepaid debit cards.

The market for these cards may have begun among low-income workers and the unemployed in the midst of a recession, but they could well prove popular enough to stay in widespread use even if the economy improves.

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James Stein

Prepaid cards are by far the fastest-growing type of non-cash payment method, but they are also not nearly as much regulated as credit and debit cards and you should carefully read the terms and conditions, as well as all fee disclosures, before purchasing one.

December 15 2011 at 4:56 PM Report abuse rate up rate down Reply

With only 5 weeks left until balloting takes place for the GOP candidicy, Donald Trump has finally been pressed into his endorsement decision. "Are you F#%^ING kidding me." "YOUR ALL FIRED!"

November 28 2011 at 2:44 AM Report abuse +1 rate up rate down Reply

The banking business is huge...with all the fees they charge. Don't knock Wal-Mart for trying to get in where they can because they see the big picture. I have been a member of the Navy Federal Credit union since I joined the Navy in 1982, I an also a member of First South Credit Union, and The Federal Emploee's Credit Union. One, You have to be in the military, or a Federal Employee to join. Anyone can Join First South, but they do run an informational credit review to ensure you don't have any bad accounts anywhere. That"s the problem a lot of people have, they owe another bank money on an account that has been overdrawn. The MoneyCard is the best thing out there if you can't open an account. There are many other companies that market debit cards, but the fees eat you alive. If you are in a position where you can't open an account at a bank...Then the MoneyCard is the best way to go because for $3 bucks you can have a card to recieve your direct deposit to make the purchases and pay the bills you need to pay. I have 3 checking, and 6 savings accounts between the 3 Credit Unions and if I don't let any of my checking account balances fall below $200, they are free. If they fall below that amount, it cost me $10 a month. $3 bucks is a good deal to have a place to store your money, and by the way...if you have a balance with a bank contact them and construct a plan to pay them off...having a good credit rating , or restoring your credit rating should be a top priority for everyone.

November 28 2011 at 1:25 AM Report abuse rate up rate down Reply

Walmart Money Ruined A Good thing. The only Bill Pay they now have is to companies that agree to accept credit cards. If it is not on their list you can not use their bill pay. Before the change you could pay anyone you had an address and phone number. AS with Walmart they now do not listen to customer needs. They had a good thing till they ruined it.

November 27 2011 at 9:58 PM Report abuse rate up rate down Reply

True leaders don't cast blame. They tackle whatever problem is at hand...............We don't have a true leader.

November 27 2011 at 9:36 PM Report abuse -1 rate up rate down Reply

I never will shop at wal mart for I do not want my hard earned money to go to China.

November 27 2011 at 6:07 PM Report abuse +1 rate up rate down Reply
3 replies to toosmart4u's comment
Fireball Roberts

Lets see, you give Wal-Mart 3 dollars a month then there is 2 million people using this service, thats 6 million a month or 72 million a year that Wal-Mart makes for holding your money, plus the interest they make too. WOW, not to bad a deal for Wally. Keep shopping there, soon no one will have a job. I would not use their debit card if they gave me 3 dollars a month. If you give me 100 dollars and I keep 3 and give you back 97, come see me, I will do this all day long. If people look around, they can find a bank or credit union that will do it for free. BUY AMERICAN if you can.

November 27 2011 at 5:47 PM Report abuse +2 rate up rate down Reply

GIVE China more of your $$$$$$ Dumb ass Buy lots of chinese products for Christmass Buda need's the Money

November 27 2011 at 4:38 PM Report abuse +1 rate up rate down Reply

Evan you're a dope swapping screen name to rate posts, I guess you lost your Where's Waldo book. I'm sure you can get a new one @ Wally World

November 27 2011 at 2:47 PM Report abuse -1 rate up rate down Reply

Walmart has been trying to become a Bank (like the other big banks) for a number of years. They tried to become Mortgage Bankers, Plain Bankers and anything they could be to grab another sector of the economy. Can you imagine the Walmart Big Box business model in the banking industry? Since Banks are already a mess, Walmart would make local small banks go bankrupt, have the government dissolve them under FDIC and then, once there were no alternatives, be free to raise their fees, and screw their customers at will. When you are trying to wrapmyour head around how Walmart functions, here are just a few things - Walmart has cornered the atlantic salmon industry by putting salmon farms in South America, on the PACIFIC side, writing exclusions to the local pollution rules, fouling the bays and fjords of Chile forever. Walmart has moved so many suppliers overseas that it could be called S supplier until they are purchasing 60% or more of the yearly production. Then they announce they will not order any more unless the supplier meets WALMART's new price. TO do so the production has to move overseas and (guess what) Walmart knows just which factories in China and elsewere are available because Walmart generally owns them. Walmart pays very little realestate, town, county or state taxes because they build a building and then Lease the building to themselves for whatever the Gross is for that store. Walmart as a Bank is like having a pedophile as a kindergarten teacher.

November 27 2011 at 2:40 PM Report abuse +3 rate up rate down Reply