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American Express Prepaid Card Review - Possibly The Lowest Fee Prepaid Card

Picture of Item Reviewed

Editor's Rating:
Intro Purchase APR Regular APR Annual Fee Credit Needed
N.A. $0 No Credit
Feature Summary
  • No fees on transaction, customer service or annual fee
  • Credit card type perks that are not available in other prepaid cards
  • Offers a path to be invited for an American Express charge card
Executive Summary - The best prepaid card in the market by a miles. It charges none of the traditional fee that most prepaid card charges. It provides credit card type benefits that regular Amex credit card holders get. For those new to credit, this card (if used responsibly) could result in an invitation to apply for their regular charge card. Right now, new cardholders will get a $10 gift card if you load $50 after getting the card. (till 31st July 2012)

While the prepaid card world has primarily been the domain of companies targeting to the sub prime and unbanked sector, with cards laden with fees, Amex has taken a different approach by issuing a prepaid card with hardly any fees and would also be a ticket to an eventual Amex credit card or charge card.

Minimum Fees? Really? - Most Prepaid cards come with a boat load of fees. They include fees like application fees, monthly maintenance fees, fees for transactions, customer service calls. The American Express Prepaid Card has none of those fees.

They charge no set up fee or application fee (some issuer deviously consider those charges "activation fees"!). While some prepaid cards claim they do not charge any annual fee, they actually impose a "monthly maintenance fee", which if you add them up, becomes sort of an annual fee!

Just a few years ago, most prepaid cards imposed fees per transaction (ranging from $0.50 to $1.50). Many issuers have done away with this. But there are still cards that charge them (either for PIN based or Signature based transactions). Well, American Express has done away with this totally.

Because many prepaid card issuers simply outsource all aspects of their operations, they charge for things like calling a customer service rep. American Express is a "proper credit card company" with it's own telephone call centers. Hence, they do not charge anything if you were to pick up the phone and call Amex if you have a problem.

Loading the Card - There are many ways you can load the card. The most simple way is obviously to use direct deposit. You can also load the card via your bank account (which will generally take 5 days).

This card is also part of the Vanilla Reload Network. Hence, you can reload your card from any of their retailers for a $3.95 fee. You can also load your card from MoneyPak (up to $500 per load), though there is a fee for that as well.

Access to American Express Benefits - One of the great features of having the American Express Prepaid Card is that you get benefits that Amex charge card and credit card holders get. This is almost unheard of in the prepaid card world! What do we mean? Well, here is the list of benefits:

  • 24/7 Customer Service - not only do you not have to pay for calling a customer representative, you can call Amex anytime at 1-866-207-7970
  • Purchase Protection - If you buy anything with the card and you accidentally damage it, you will be reimbursed if you report within 90 days (subject to an annual cap off course).
  • Special Discounts - You will also having special discounts with Amex merchant partners through their American Express Selects program
  • Roadside Assistance - If your vehicle breaks down, you can call the Amex Roadside Assistance and get help. This will come in handy if you not have any AAA membership
  • Global Assist - Global Assist is service provided by Amex whereby they can connect you to emergency medical, legal services when you are abroad. This perk is normally reserved for their charge card members. But it is now available on this card
  • Entertainment Access - American Express sponsors lots of events like live concerts. On events that they sponsor, they will make seats available to their card members before it is open to the public. If you are a regular concert goer, this is a great perk to have.

Pathway to Amex Charge Card? - Amex is also making use of this card to gauge your eligibility for their charge cards. If you get this prepaid card, use it responsibly, you may be invited to apply for an Amex charge card. Amex recommends that you use the card to pay for things like gas, recurring bills like cell phones and to make sure you reload the card when the balance is low.

They did say on their site that this will be the most appropriate thing to do when you have no credit. And that using this card will not help you to improve your credit if it is bad. That is true since prepaid cards do not build credit history. But I would like to think that if you have this card and other regular credit cards to build your credit score, it could also be a ticket to get an Amex charge card down the road.

Is the American Express Prepaid Card Good? - Before I reach a verdict on any card, I usually do some peer comparisons since it should be judged against similar cards. But I will make an exception in this case because this card simply blows it's peers away. Firstly, it blows it away because there are hardly any fees. You will get good customer service with Amex. You will also get credit card type perks that are not available on prepaid cards. But more importantly, for those new to credit, this is a ticket to get an invitation to apply for an Amex charge card in the future. We highly recommend this card to those looking for a prepaid card.