By Jim Donovan

PHILADELPHIA (CBS) –As more transactions take place online, pre-paid debit cards, some with celebrity backing, are becoming a more popular financial tool. But 3 On Your Side Consumer Reporter Jim Donovan finds that not all pre-paid credit cards are created equal.

Pre-paid debit cards are aimed at those “unbanked” Americans who don’t have a bank account, can’t get a bank account, or don’t want one. Users load money onto the card and pay transactions online or in-store, just like a regular debit or credit card. But some of the cards have drawn criticism for associated fees that can eat into a balance.

“The primary downside of pre-paid cards are the fees, and while the fees themselves are very modest in isolation, it’s the fact that they can mount quickly, in the course of just traditional financial transactions,” says Greg McBride from

Those fees can be charged for using the card the first time, for loading additional funds on the card and for making ATM withdrawals, or you may get hit with monthly and yearly fees for just holding the card. That is why it is critical to understand the terms first.

“The smaller the print, the more important the words. That’s where you’re really going to find if this is really a fit for you. You really have to be dialed into what the fees are, what’s going to trigger those fees, and what you need to do to avoid them,” McBride explains.

So financial experts say think ahead about the services you need in a card. Think you’ll need to call customer service, or will you want to receive a paper statement every month? Just be sure to do your homework in advance, so that you’re confident that there won’t be any extra costs involved.

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