Consumer Reports: Best prepaid cards

NEW YORK -- Prepaid reloadable cards are growing rapidly in popularity as a way to manage money.

You can acquire the cards in stores, banks or online, and load them up. They're an easy way to pay for purchases, and they can take the place of a traditional bank account. Consumer Reports analyzed the terms of 20 cards and has advice on the best ones.

Catherine French, her mother and son all use prepaid cards. For James, it takes the place of a bank account.

"I've used it almost anywhere, from restaurants to convenience stores, gas stations, anywhere," James French said.

Catherine says the prepaid card makes it easy to give James only what he needs for school and to avoid the perils of a credit card.

"I know I'm not going to let him loose with my credit card with his name on it," she said.

And Consumer Reports found that they are better than they used to be.

"One of the big improvements is safety," chief money editor Margot Gilman said. "All of the prepaid card issuers we checked now voluntarily offer some of the same protections as bank-issued credit and debit cards."

However, you must register your card to get those protections, and since they are only voluntary, they could be revoked. Consumer Reports also evaluated the cards for value and convenience.

"For those who use the cards in place of a bank account, it's important to be able to pay bills, add money, and withdraw cash without incurring a lot of fees," Gilman said.

The lowest-rated card, the Netspend Prepaid Visa Pay-As-You-Go, has relatively high fees, and there's always a fee to use an ATM.

In response, NetSpend says it offers "a feature rich product" that may not be comparable to prepaid card programs Consumer Reports reviewed.

"The four highest-rated prepaid cards worked well for those who use them instead of a bank account, as well as for those who use them for shopping," Gilman said.

They are the Bluebird from American Express and Walmart, ChaseLiquid issued by Chase, the Green Dot Prepaid Visa, and the Halogen Reloadable Prepaid Card available at K-Mart.

All have low fees, voluntary safety protections, and are widely accepted.

The government's Consumer Financial Protection Board is expected to issue new regulations for prepaid cards this spring. They will guarantee protections for lost and stolen cards, and make it easier to understand and compare fees.

Consumer Reports Buying Guide on Prepaid Cards is available free at: ConsumerReports.org/cro/prepaid-cards/buying-guide/index.htm