Payment Methods

Credit cards, debit cards, gift cards and more

Your wallet, purse or pocket likely contains some way to pay for goods and services, whether it is a credit card, debit card, gift card, prepaid card, check, cash or mobile phone. The payment choice can often determine what types of consumer protections you will have in case something goes wrong. Consumers Union exposes bad practices and advocates for strong regulatory and statutory changes for a better payments marketplace.

Subtopics:

Debit Cards

Bank debit cards have quickly become popular, allowing consumers to use funds directly in their bank accounts. But debit cards are not always the best payment option; among their downsides is that they do not have the same protections as credit cards, and may incur huge fees due to overdraft loans and other bank fees.

Gift Cards

Many consumers have either given or received a gift card. Several states have passed strong laws on retailer gift cards, resulting in many gift cards which no longer have expiration dates or fees. But, consumers continue to experience problems in trying to use their gift cards, especially with the growing number of retailers filing for bankruptcy.

  • Mobile Gift Card which allow customers with web-enabled cell phones to use their gift cards at this big retailer. Starbucks also has a similar mobile gift card iPhone application on a trial basis in the Seattle and Silicon Valley areas. ]]>">The Latest Development for Gift Cards (February 19, 2010)
  • Nicholas of theTownship Of Washington, NJ (February 4, 2010)
  • Scott of Norman, OK (January 25, 2010)

Government Issued Cards

State and federal government agencies are disbursing benefits onto prepaid cards, such as unemployment benefits, child support and social security benefits. While these cards may be more cost effective to issue, many consumers are being crushed by high fees at a time when they need every penny the most.

Payroll Cards

Payroll cards are provided by employers and allow employees to access the money from paychecks using cards that look like bank debit cards. Payroll cards can be more convenient than using check cashiers, because they can be used to withdraw cash from ATMs and be used to buy things. However, some payroll cards charge more fees than others.

Phone and Online Payments

Consumers have long been able to make payments by phone and more recently, by mobile phone. The emergence and eventual widespread adoption of electronic payment methods has dramatically changed the payments landscape. Convenience should not give way to statutory and regulatory consumer protections.

Prepaid Cards

Prepaid cards are the newest plastic payment cards. They look like debit cards with a logo from a major card network. Consumers are likely to purchase these cards for a fee, and often pay additional fees to use the prepaid funds loaded onto the card to make purchases or pay bills. These cards function much like a debit card linked to a bank account, but do not have the same guaranteed consumer protections.

Policy and Legislation

Consumers Union News Releases

Research and Reports

Consumer Tips

Blog Posts

Tell Us Your Story!

Do you have gift cards that you can't use, because the store has gone out of business? Consumer Union would like to hear if you have any gift cards that have stopped giving. Your account of what has happened to you will help us push for gift card protections.

We want to hear from you. Your willingness to share your stories helps us pass laws to protect you and your family.

Read stories from individuals who have shared their stories, like:

Judith of Worcester, MA
Three malls in Central Massachusetts are selling their own prepaid cards at holiday time. If not used right away at any of the stores in the mall it automatically reduces in value!

How to complain to the Government

Online, by mail, phone or fax... Agencies need to hear from you!

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