Americans are more conscious of debt than ever. Feeling burned by bank overdraft fees of $30 or more, or by credit-card interest rates that can top 25 percent, a growing number of consumers are turning to prepaid, reloadable “cash cards.”
For a large segment of users, primarily low- and moderate-income consumers, these cards function as ersatz bank accounts. These consumers are referred to as the “unbanked” in card-industry parlance. With a cash card, those with poor credit or too little money to meet banks’ minimum account balance requirements can participate in the retail transactions most people take for granted: ordering goods online, paying for items with a quick swipe, getting cash on demand from ATMs.