News

Prepaid Credit Card Changes

The federal government introduced new regulations on October 24, 2012 on prepaid credit cards. In a largely unregulated market, the government is creating regulations that will not allow issuers of prepaid cards to impose expiry dates. New regulations will also require issuers to be up front about hidden fees and conditions. This small but growing market for prepaid credit cards, some of which parents provide their children, has been under a microscope for exorbitant hidden fees that reduce they actual face value of the prepaid amount on the card. Other hidden fees may include monthly or annual fees, maintenance fees and ATM charges. The government stated that it was their view that it is inappropriate for financial institutions to have cards go dormant. The new regulations will require proper disclosure on the prepaid card packaging that is not found in the very small print.