Loaded propositions

Besides, some companies say their cards offer the same consumer protections as credit cards. Visa and MasterCard officials said any prepaid cards with their logos have the same safeguards as debit cards if they are lost or stolen, which is zero liability for fraudulent transactions.

But Linda Sherry, director of national priorities for Consumer Action, said the limited regulation means that contracts between consumers and financial institutions can change.

"All in all, these are just not as good a deal as a bank account, and I think they shouldn't be promoted as parallel to banking accounts because they're not," Sherry said.

Jim Ashley, a 24-year-old Morgantown, W.Va., resident, got a NetSpend prepaid MasterCard last year after closing his bank account. He was tired of overdrafting his account and getting charged $35 each time.

"That adds up quickly," he said. "I just got overwhelmed. I'm in college, and any money I get, I need."

He now uses his prepaid card for most purchases. He does not have a credit card. The $9.95 a month he pays for the card adds up, too, but he said, "I'd gladly pay that in exchange for not overdrafting my account."