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December 5, 2016

Overdraft coming to prepaid cards, with heavy restrictions

  • Prepaid debit cards have become popular over the last 15 years for many Americans, who use them as an alternative to a traditional bank account.
    • By KEN SWEET
    AP Business Writer

    NEW YORK — More consumers who use prepaid debit cards will be able to spend more than their balance, starting next October. But if that feature sounds very much like overdraft protection on a traditional checking account, well, there are some key differences.

    The new rules, finalized by the Consumer Financial Protection Bureau in October, will make prepaid debit cards even more like traditional checking accounts, but also will require customers who want overdraft protection to apply for it like a credit card.


     
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