Most people should not bother with prepaid cards, because of the costs.  The issuer makes money by processing the transactions, typically in a monthly fee.  The card is a fee for service.   Each transaction has a cost.

There are situations in which someone will need to have a prepaid card.  Typically, the person cannot get a credit card because of bad credit, and the person cannot open a bank account ( because he or she is in ChexSystems as a  bad risk).

Many people do not understand ChexSystems.   According to the ChexSystems website:  “ The Chex Systems, Inc.  network is comprised of member Financial Institutions that regularly contribute information on mishandled checking and savings accounts to a central location.   ChexSystems  shares this information among member institutions to help them assess the risk of opening new accounts.  ChexSystems only shares information with the member institutions and does not decide on new account openings.”

ChexSystems shares your banking account (history) information, with members of the system.  The typical information report includes items such as bad checks history.   Therefore, if you have many unpaid bad checks at one  bank, such as Citibank, Citibank can report your activity to ChexSystems.  And if you try to open up an account at Chase  Bank, Chase can get your ChexSystems report and refuse to open up a new checking  account.

For your financial health, you need to stay away from ChexSystems.  With a bad ChexSystems report, you may not be able to open a bank account (to get checking services and a debit card).

You can order a copy of your ChexSystems report at:     

Filing for bankruptcy does not automatically mean that you will have a bad report in ChexSystems.  I have seen clients want to file bankruptcy and include, in the filing, amounts due to a bank for overdraft checks.  In these instances, I always tell the client to pay off the overdraft balance, to avoid a ChexSystems bad checking account report.

The only people who should be using a prepaid (secured) card is someone who has a bad credit file, who cannot open a credit card account, and a bad CheckSystems file, who cannot open a checking account and get a regular debit card as part of a checking account.

Law Offices of Robert M. Singer, LLC

2572 Whitney Avenue

Hamden, CT  06518



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