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The American Express Prepaid Card card launched last summer to much fanfare. And on the surface it looks pretty good, especially for young professionals without access to traditional credit.

But you know how I love to dig deep below the surface, so let's take a close look at this prepaid card and see what's there. First, the good news.

What's Good

The only official fee is $2 per month for each ATM withdrawal. You even get the first withdrawal per month free. You don't have direct deposit, though, so the one-fee-only claim does need an asterisk because you might have to pay a load fee if you use a Green Dot MoneyPak. I'll get into details about that in the "What's Missing" section below.

Still, it's good that there's no monthly maintenance fee, inactivity fee, activation fee, or other fees to eat into your funds.

You get benefits you don't normally get with a prepaid card and this is one way American Express is setting its card apart from the rest. You get purchase protection, fraud protection, and access to discounts and special offers. You also get roadside assistance, but the cardholder is responsible for paying all the expenses associated with the emergency assistance. But you do get assistance tracking down help and that's useful.

In fact, you get 24-hour customer service. This is a good perk for a prepaid card. You'd be amazed at how many cards require you to pay each time you speak with a customer service representative.

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What's Interesting

American Express is promoting Make Your Move in association with the prepaid card. If you use your prepaid card responsibly, you might be invited to apply for an AmEx charge card. I'm not really sure how you use a prepaid card irresponsibly since you can only spend the money you have. I guess if you keep a balance so low that you can't pay your fees, that's a problem.

Clearly, AmEx is appealing to the young professional with limited credit. But if this is your situation, I suggest you get a secured credit card that reports to the major credit bureaus and use it for 12 to 18 months. This is the most efficient way to build credit.

But I do like the attempt to move people into the mainstream banking system. I'll give AmEx props for being honest about this program. You may or may not be invited to apply for a charge card. And even if you are, you might get turned down. If you're just hankering for an American Express charge card, though, this is one path to explore.

What's Missing

There are two things this card lacks. The first one is direct deposit. Without direct deposit, you'll have to use a Green Dot MoneyPak to load your money. Now, your other option is to add funds to your card via another AmEx credit or charge card or via your bank account. But why are you using a prepaid card if you have an AmEx card or a bank account?

The second problem is the lack of a bill pay feature. People who use prepaid cards as a substitute bank account are generally looking for both direct deposit and a bill pay feature.

What's the Bottom Line?

If you're unbanked, this is one of the few prepaid cards that I'd recommend because of the minimum amount of fees. If you can work around the lack of direct deposit or bill pay, this is a low-cost prepaid option. Just remember that if you use a Green Dot MoneyPak, you'll pay $4.95 per load. The single load maximum for the card is $500. Make the most of your $4.95 and load up to the limit if you can.

But if you try to use this card as a substitute checking account and have to load money every week, that's almost $20 a month. Plus, the maximum allowed on the account at any one time is $2,500.

There's another use for this card, though. I think this card is a decent option for giving allowances to kids up to around age 15. You can transfer funds from your bank account to their prepaid card. The only fees would be if your teen went crazy at the ATM machine. It might be a good way to get them used to plastic. Once they get a checking account, you can transition them to a debit card that's linked to their account.

Disclaimer: This content is not provided or commissioned by American Express. Opinions expressed here are author's alone, not those of American Express, and have not been reviewed, approved or otherwise endorsed by American Express. At publishing time, the American Express Prepaid Card is offered on Credit.com product pages and Credit.com is compensated if our users apply for and ultimately sign up for these cards through the American Express Affiliate Program. However, this relationship does not result in any preferential editorial treatment.

Disclaimer: This content is not provided or commissioned by American Express. Opinions expressed here are author's alone, not those of American Express, and have not been reviewed, approved or otherwise endorsed by American Express. This site may be compensated through American Express Affiliate Program.

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