Wal-Mart Debit Cards - A Waste Of Your Money

Guess what?

Wal-Mart now offers pre-paid debit cards. That's right, you can give them your money up front, and they'll let you use... well, some of it. The card is supposedly intended for people who live outside of mainstream banking - those 40 million people who do not have accounts at financial institutions and pay excessive fees for financial services. Unfortunately, this seemingly convenient service is loaded with so many fees you'll swear it's their credit card.

Let's take a closer look at the Cardholder Agreement, shall we?

First of all, if you happened to be wanting to get a prepaid card just so that random people couldn't just monitor your transactions, and to ensure that you are neither a terrorist nor a money-launderer, your name, address, date of birth, and 'other information that will allow us to identify you' will be taken. If you're not terribly comfortable with Wal-Mart tracking your movements (let alone the federal government), this would be your first warning that you're probably better off with cash.

Assuming you don't mind having your purchases scrutinized by Wal-Mart, you can then proceed to load a Temporary Card with your money (either by handing over your government or payroll check, or handing over cash). This costs you $8.94 to get the Temporary Card, which is non-reloadable and must be activated after purchase by going online or by calling a toll-free number, with your Wal-Mart receipt handy. After they have determined that you are neither a terrorist nor underage, they will issue a Personalized Card to you. (Notably, there is no indication of how they will return the money spent on acquiring the Temporary Card to you should they decide not to honor it or should you choose not to accept the agreement after discovering all the fine print involved in letting them take your paycheck, aside from to direct you to their toll-free number.)

Eventually, you will receive your Personalized Card (forget about giving this to someone as a gift), which must also be activated via the aforementioned process in order to transfer the balance from the Temporary Card to the Personalized Card.

If you happen to want to reload your Personalized Card, it's going to cost you. If you want to load your card using cash or another debit card (why?), or using a check that is not a payroll or government check, it'll cost you $4.64. If you use a payroll or government check, the card won't charge you, but Wal-Mart itself may charge a check-cashing fee. If you load it at any non-Wal-Mart location, you have to purchase a MoneyPak (which may have its own additional costs) and activate it over the phone.

Want to actually get your money out again? Looking up your card balance while buying something or via automated telephone service is free, but if you take your card to the ATM, your money will invisibly and automatically vanish from the card with every transaction. Want to check your balance on an ATM? That'll be 75 cents. Want to make an ATM withdrawal? If you're in the United States, that'll be $1.95 (above and beyond any normal ATM fees); if you're anywhere else in the world, that'll be $3.50. There's a 'Teller Cash Transaction' fee of $3.50 - if you want to get cash back at the register, Wal-Mart will take a little for itself.

Want to just keep the card handy in case of emergencies? Sorry, you can't. There is an automatic 'Monthly Maintenance Fee' of $4.94 whether you do anything with the card or not. If you want to receive a statement in the mail, you'll be assessed a 'Paper Periodic Statement Fee' of $2.00 every time they send one to you. If you ever need to replace your card (whether it's stolen or lost or just loses its magnetism), that'll be an additional $8.94. If you need that card quickly, it'll be an additional $19.95 for rush delivery. If you want to speak to a live person about your card for any reason, that counts as an 'Operator Assisted Call' - an additional $2.00 fee. Last, but not least, if you happen to be outside of the United States, ALL of your transactions will be billed an extra 2% - whether they are in a foreign currency or not.

Of course, Wal-Mart reserves the right to change the terms of the agreement at any time, to terminate the card at their option, and to give out information relating to your purchases to whomever they feel has a need to know (government agencies, other merchants, credit bureaus, and the like).

In short, owning a Wal-Mart debit card offers many services that you would receive with an ordinary bank account (such as being able to deposit payroll or government checks into it); however, it has so many little fees that will eat away at your balance that you're really better off with an actual bank account.