Loaded propositions; Prepaid cards are a convenient alternative to debit or credit, but they can come with hefty fees
Consumers are increasingly turning away from traditional bank accounts and credit cards in favor of a different form of plastic: prepaid cards.</br></br>Consumers typically buy them from a retailer, load them with money -- sometimes from directly deposited paychecks -- and use them at checkout counters or to pay bills online. And the cards are advertised with a phrase rarely used by financial institutions since the beginning of the credit crisis: No credit check necessary.</br></br>So it's no wonder that in 2008, consumers loaded $8.7 billion on prepaid cards that carry Visa, MasterCard, American Express and Discover logos and can be used anywhere, up from about $4 billion the year before, according to Mercator Advisory Group, a research firm that focuses on the payments industry.</br></br>Consumer advocates warn that the cards can carry an assortment of fees. Nevertheless, prepaid cards have become popular among those who cannot get traditional bank accounts, many of them immigrants who rely heavily on more expensive check-cashing institutions.</br></br>Many college students use them as an introduction to plastic, and industry experts say they expect that practice to increase when a credit card law takes effect in February that will make it difficult for anyone under 21 to obtain a credit card without an adult co-signer.