Are pre-paid debit cards right for you?

RVers, like most everyone else, have different backgrounds and needs. But traveling, particularly for those who fulltime or snowbird, can added certain complications to the lifestyle, and the area of finances can be one of them. Some RVers find it difficult to maintain a relationship with a bank. Add to that, the tough economic times have wiped out some RVers credit scores. Some wonder, "Maybe a pre-paid debit card is the answer." You're not alone – according to one source, last year Americans pumped $82 billion onto pre-paid cards. But not all plastic that glitters is the right kind of gold.

While getting a pre-paid debit card is easy – anyone, regardless of their credit-worthiness can get one – these cards to stab you in the back – right where you carry your wallet. Most of the problem lies in the fees. There may be an initial fee to get your hands on a card. A pre-paid card from Walmart can cost you between $3 and almost $5. One card, supposed to be popular for the kid-crowd cost $100 for a year's purchase. But beware, the fees don't stop after you've gotten into the card. Here's the fee structure if you buy a card from Walmart.

Monthly service fee: $3.00
Reload fee at Walmart: $3.00 (yes, they charge you to put money ON your card).
ATM cash withdrawal at non-preferred ATM: $2.00
ATM balance inquiry: $1.00

Some card issuers charge you if you don't use your card – say $3 if you haven't spent any money in three months. All in all, fees can add up in a hurry.

But other problems exist in the market. Americans accustomed to having checking or savings accounts insured against loss may be in for a shock if their pre-paid card company goes out of business. The FTC does not insure deposits on pre-paid cards, and you could be out all of your money if your issuer goes bust.

For those who are trying to rebuild their credit, a pre-paid debit card won't help. Unlike a pre-paid credit card, the debit cards don't go toward any sort of credit rating. While pre-paid credit cards are a whole different subject, if you are trying to get your credit back, you're better off looking into a pre-paid credit card. These too, have advantages over the pre-paid debit card. With the credit card, if you have a dispute with a seller over a purchase, you have leverage and can, in some cases, file a claim against the card. With the pre-paid debit card, got a beef, you're out your money.

Aside from "pin number" protection for your money, a pre-paid debit card will probably do little to advance you financially, and could cost your plenty in the long run.