Magazine article American Banker

AMEX Calls Prepaid Card Alternative to Its Checks

Magazine article American Banker

AMEX Calls Prepaid Card Alternative to Its Checks

Article excerpt

American Express Co. has a new prepaid, reloadable magnetic stripe card that it is calling an alternative to its paper travelers checks.

Amex will sell the TravelFunds cards itself for now but said it hopes to distribute them through banks, too, the same way it does travelers checks. And it said it is working on partnerships with airlines and car rental companies to have them offer the cards.

TravelFunds is not a retreat from the travelers checks business but a new option aimed at younger travelers more accustomed to plastic cards, the New York company said. It announced the product Wednesday.

Still, Amex is clearly putting far more marketing muscle behind the stored value cards, which look like regular credit cards and can be loaded in amounts between $300 and $2,750, by phone or through the Web. The limit on travelers checks is $1,000.

Just how good a deal the cards are for travelers is open to question. Amex says on its Web site that the cards cost $14.95 and checks cost $15. The cards can be bought at no charge through yearend. There are no shipping charges for them, while checks cost $5.95 when shipped. The TravelFunds card carries a $5 reload fee, however, when cardholders add more money. A minimum of $100 must be added at a time.

Use of credit cards other than those offered through American Express, like Visa or MasterCard, to reload the TravelFunds card will be recorded as a cash advance by the credit card companies, which can result in fees and interest being charged to the credit card. …

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