Step Towards Transparency: Fee Warning Labels on Cards

In an attempt to regulate the pre-paid debit card market, lawmakers have proposed putting disclosure labels on the cards. They would highlight most common fees and warn consumers against some potential additional charges.  

Pre-paid debit cards are a very convenient and popular method of payment for many, but they are loaded with fees. Just like swipe fees, those surcharges are pretty much hidden from the card users. Neither banks nor credit card companies go out of their way to inform clients about swipe or transaction fees, overdraft, ATM, replacement, maintenance and a long list of other charges that can cost you as much as $360 a year. So maybe lawmakers should be thinking about warning labels for all cards, not just pre-paid.  

We can't argue with the point that warning labels alone wouldn't fix the issue of inflated card fees. Consumer Program Director at the U.S. Public Interest Research Group Ed Mierzwinski says:

 “If they’re not going to ban bad fees, will the disclosure require a skull and crossbones next to an overdraft fee? If you’re not banning the worst fees, it doesn’t do much good to tell consumers only about some fees but not all the fees.”   

Disclosure labels might not be a perfect solution but they would sure be a huge step towards transparency that electronic payments system lacks right now.