Lydia Ludwig is a coffee shop barista, just earning enough to get by, so she was thrilled when her aunt bought her a prepaid Visa card as a gift, until she tried to use it.
"I was going to buy some supplies to make jewelry, and I got to the register, and it declined," Ludwig said. "I was very confused because I hadn't used it yet."
What Ludwig didn't realize is that the Green Dot Prepaid Visa does not fall under the Federal Gift Card Law. The law prohibits store gift cards from charging monthly fees or expiring before 5 years.
She was confused, because it was a prepaid card. "The only difference was the little logo that says Green Dot on it. That's the only indication that its different from a regular gift card," Ludwig said.
It turns out that what she received is not really a gift card. Rather, the Green Dot is a reloadable debit card, and it comes with a lot of terms and conditions.
"It was charging me $7.95 every month regardless of whether I used it or not," Ludwig said. "To avoid that charge you would have to add $1,000 on this card every month."
The Green Dot Visa - -- endorsed by Steve Harvey --- is a bank account alternative. Many people load their paycheck on it, and it works very well that way, as it cuts down on direct deposit fees.
In fact, Consumer Reports Magazine rates it as one of the best prepaid cards to use in place of a checking account.
There's nothing wrong with Green Dot, unless, like Ludwig's aunt, the buyer misses the print at the bottom of the display card saying it should not be used as gift card.
Stores are supposed to stock Green Dot on its own rack, but Luwig says "it was in gift card section, next to all the gift cards. It looks exactly like it."
She plans to use up what's left on it, and this young barista will know the difference next time she goes to buy someone a gift card.
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