Eighty million people in the United States are considered financially underserved, meaning that they do not have full access to financial tools and services; 27 million of these consumers don’t have a bank account or a credit score.

Consumers living in this “cash and carry” world face many challenges in their daily lives, including:

• Inconvenience. They don’t have immediate access to payroll or government benefit funds, at least not until the checks are cashed.

• Added expense. Americans spend approximately $1.5 billion in check cashing fees each year. Additionally, they need to invest time and money to physically cash checks and then turn those funds into money orders or other instruments to pay their bills.

• Security concerns. Keeping all of one’s money in cash isn’t safe — if it’s lost or stolen, it’s gone.

• Financial management issues. Using only cash provides less control over their finances.

One alternative to a cash-only lifestyle is a prepaid card. Many employers now offer prepaid cards as a way to extend direct deposit benefits to employees who previously received paper checks, and state and federal government agencies are increasingly providing child support, unemployment and other benefits through these products. Prepaid cards are also available from banks and stores. It’s important for your constituents and members to know how prepaid cards work, what they cost to use, and how the money on them is protected.

That’s why the National Consumers League has developed a simple, bilingual brochure about prepaid cards. (Click here to view the PDF.) Produced with an educational grant from Visa USA, the brochure explains how to get prepaid cards, how they work, the costs of using them, what to do if they’re lost or stolen, and what other choices people have to handle their money.

Prepaid Cards: What They Are, How They Work is available free of charge from the Federal Citizen Information Center.  To order a brochure, visit http://pueblo.gsa.gov/listall.htm and look for brochure 638N. Or simply call 1-888-8 PUEBLO (1-888-878-3256) and follow the automated instructions.

Order a free copy