Yet you may get socked with higher fees when using them, compared to traditional bank checking accounts where fees also are rising, according to a recent Consumer Reports study.

So are prepaid debit cards good for you? The answer depends on how you use them. If you're controlling your expenses, limiting potential losses while traveling or teaching kids about money, prepaid cards make sense. The reason: You can't spend more money than is on your card. And because they're cobranded with MasterCard or Visa, you can pay bills online or use them almost anywhere. To tap into this boom, American Express launched its own version in June. It's a prepaid, reloadable card that you can use at ATMs, online or any place that takes AmEx cards. Online statements can help you track spending. But like all prepaid debit cards, the AmEx card does have fees. The first monthly withdrawal is free, but AmEx charges you $2 for every subsequent ATM withdrawal. A plethora of fees is the biggest downside to prepaid debit cards, says Jeffrey Woolf, a Certified Financial Planner based in New York. They can include reload, maintenance and activation fees, Still, there are situations when prepaid debit cards do make sense. Curbing spending. With prepaid debit cards, you only spend money that's loaded on the card. That's good because you can't carry a credit balance, But controlling spending does help you better save for long-term goals like retirement or managing debt.

Keeping money safe when traveling. Prepaid debit cards are easily used overseas. And there's another upside: If your card is stolen, your losses are limited to the amount on your card. You're not stuck with a drained bank account, damaged credit or lost time recovering funds, You have damage control

Teaching kids about money. The card empowers parents to help teens develop smart habits, When you give a cash allowance, you don't know what happens to it.

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