The charges (Cont...)

Some cards charge you for every purchase; hence the price of the item eventually increases. It can even charge you for taking out transaction or purchase details, which may be up to $6. Out of 24 cards that are available in the market, all the cards charged extra for ATM usage, and card reload. Some cards were found to collect activation fees, ranging from $3 to $40. Monthly, or annual fees are very popular, and average monthly fee is about $10, whereas, the annual fee may be as high as $100.

In addition, prepaid cards provide substandard protections and benefits, said Ed Mierzwinski, who serves as consumer program director of U.S. Public Interest Research Group, a public interest organization.

They represent "all the bad parts of the current system, with none of the benefits," Mierzwinski says.