Newspaper article The Record (Bergen County, NJ)

Chase Debuts Lower-Fee Card

Newspaper article The Record (Bergen County, NJ)

Chase Debuts Lower-Fee Card

Article excerpt

Prepaid money cards, which are growing in importance as a cash and checking account alternative, are notoriously fee-laden. But that may be changing.

JPMorgan Chase & Co. announced Tuesday the national debut of Chase Liquid, a low-cost prepaid card, following PNC Bank, Regions Bank and Wells Fargo into competition for lower-income customers with Walmart, Green Dot Corp. and others.

"Consumers are looking for an affordable and predictable way to manage their money," Ryan McInerney, CEO of Consumer Banking at Chase, said in a statement. "Chase Liquid is a low-cost alternative to traditional checking accounts, and its convenience and pricing transparency sets a new standard for prepaid products."

About 13 percent of U.S. adults had prepaid cards in 2011 compared with 11 percent in 2010, according to a study by Pleasanton, Cal.-based Javelin Strategy & Research, a market- research firm.

The cards, which can be used just like debit cards, are attractive to the so-called unbanked, who may be paying high fees to cash checks and to buy money orders and who may be looking for an easy way to make online purchases.

They also are used by those who are no longer able to open a checking account because they have a history of overdrafts or bounced checks. Prepaid cards are also popular with parents who have children in college.

In addition to collecting monthly maintenance fees, financial firms can benefit from the opportunity to invest the deposits while collecting swipe fees from merchants when the cards are used to make purchases. They can also easily market other products, such as payday loans, to prepaid card holders.

The Consumer Financial Protection Bureau announced in May that it was investigating the mostly unregulated industry, and is taking public comments through July 22.

Many of the cards impose an array of a la carte fees that may include charges for card activation, ATM withdrawals, bill payments, inactivity, customer service calls and balance inquiries. …

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