More Money Podcast - 147 What You Should Know About Prepaid Cards - David Eason, Chair of CPPO

Episode Date: February 22, 2018

Do you know the difference between open-loop and closed-loop prepaid cards? Learn that & more in my interview with CPPO chair David Eason. Long description: Back in October 2017, I did a really crazy thing. I participated in the Money 20/20 Payments Race and it truly was an adventure I’ll never forget. The best part was being able to meet so many amazing people, and one of those people was a woman named Heidi who works for an agency that represents the Canadian Prepaid Providers Organization (CPPO). She was nice enough to offer me a free night’s stay in her home when I was in Denver, and to say thank you, I said I would gladly interview an expert from CPPO to talk about prepaid cards. I mean honestly, I think I won all around because I haven’t done an episode about prepaid cards and I actually really wanted to learn more about them from none other than David Eason, the chair of CPPO. Here are some of the things we talked about in the episode, and don’t forget to watch my entire Money 20/20 Payments Race vlog series! What is CPPO? CPPO stands for the Canadian Prepaid Providers Organization, which is a “not-for-profit organization and the collective voice of the open-loop prepaid payments industry in Canada. It is the only association solely focused on this growing industry and includes the major players in open-loop prepaid in Canada.” Open-Loop vs. Closed-Loop Having been blogging about personal finance for over 6 years, sometimes I feel like I’ve heard about it all, but apparently not! I had no idea that open-loop and closed-loop cards until recently. But don’t feel bad if you didn’t know what they were either. They are really terms that only people in the prepaid card industry use. So, what do they mean? It’s very simple. An open-loop prepaid card is either a Visa, Mastercard or AMEX prepaid card. It’s “open-loop” because it’s technically open to use at almost any retailer, as long as that retailer accepts credit cards for payment. A closed-loop prepaid card is a retailer-specific prepaid card, like a Home Depot gift card or a Shoppers Drug Mart credit card. The reason being is that they are comparatively “closed” because you can only use that card at that specific retailer. You Cannot Build Credit with a Prepaid Card One reason why the prepaid industry is trying to educate people about prepaid cards, and have moved away from calling open-loop cards “prepaid credit cards” is because they have nothing to do with credit. Open-loop cards work a lot like credit cards, but they will do nothing to help you build up a good credit history or rating. For full episode show notes: https://jessicamoorhouse.com/147 Learn more about your ad choices. Visit megaphone.fm/adchoices

Hello, hello, hello, and welcome to episode 147 of the Mo Money Podcast. I'm your host, Jessica Morehouse, and this is a very special episode. And I'm going to explain why it's special right now. So if you've been following me on YouTube, or I've even mentioned it a couple of times in the podcast, in October of 2017, so a few months back, I participated in this thing called the money 2020 payments race. It was a week long race from Toronto to Las Vegas. I was racing against, um, a group of other individuals that were all from the UK. I was the only Canadian.

And basically we all get up and got a budget. Um, we all got, um, daily challenges And we also were only allowed to use a certain payment method to travel, feed ourselves, get shelter, and accomplish our challenges. So it was kind of like the amazing race for money nerds. And it was really hard, actually. It was really freaking hard. I vlogged've logged my whole journey as did the other racers. So feel free to go to my YouTube channel, jessicamorehouse.com slash YouTube to, uh, watch those videos and see what exactly happened. But anyways, uh, during the race, um, I, you know, as I mentioned, we all had budgets, but I really didn't want to run out

of money because I knew I needed to save some money for some flights and some hotels. So if there was an opportunity for me to get it like a free stay somewhere, I was going to take it. And when I was going from Toronto to Cincinnati to Denver, I needed to find a place to stay in Denver for the night. And luckily, there was a lovely woman, Heidi, who works for this agency called the Fletcher Group. And she was following the race and reached out to the organization putting on the race and said, hey, if anyone's going to Denver, I'd be happy to, you know, I have a spare room if anyone wants to stay there for the night. And I raised my hand, I'm like, hell to the yes, I will take your free room. Even though she was a complete stranger at

the time. And I'm like, I don't know exactly even where she lives, but I'm going to get there. I want a free room. And so I did. I stayed in her fabulous, gorgeous house for the night. It was, I slept like a baby. She took me out for lunch the next day, which was so kind of her. And we started talking about, you know, what she did for work. And one of the companies that she works with is called CPPO, which stands for the Canadian Prepaid Providers Organization. And she was talking to me

about the difference between open loop and closed loop prepaid cards, which I'd never heard of before. I'm like, I feel like I've, I know it all. Well, I'm not a know-it-all, but I feel like I've kind of heard most of the terminology in the finance sphere, but I'm like, I've never heard of those. And I felt like, what? I can't believe I didn't know about this. And so this whole world of prepaid cards is something that I've never really explored on the show. And I thought this would be a great opportunity to talk to someone about that, like what's going on there. And also, what a nice way for me to say, thank you so much for letting me stay in your house, Heidi. You've been a stranger staying in your house. You were so kind and for taking me out for lunch. And I thought this would be a really great just a way to say thanks. But also, let's learn more

about what's going on with prepaid cards. And luckily, I am talking to the chair of CPPO, David Eason, and he really knows it all when it comes to the prepaid world. So I ask him, I bombard him really with a ton of questions in this episode. So I know you're going to really, really enjoy it. So without further ado, here is that interview with David. Thank you, David, for joining me on the Momany podcast. I'm excited to chat with you today. Thank you, Jessica. I'm looking forward to talking to you as well.

Awesome. So I love how this all kind of came about because it was really Heidi who is the reason that you're on the show. And I'm so glad I was able to meet her and connect with her when I was doing the Money 2020 Payments Race. I owe her a lot. So when she's like, hey, would you like to have someone from CPPO on the podcast to talk about something that I really don't know that much about, which is open loop and closed loop and prepaid cards? I'm like, actually, yeah, that sounds really interesting. I will do that. Well, I'm your guy then. Yeah. So, David, do you want to explain, actually, before we kind of get in here, what is CPPO?

CPPO, it's hard to say that really fast, which is the Canadian Prepaid Providers Organization. Do you want to explain a little bit about what the organization is about and what your role is? Sure. So the CPPO, it's a not-for-profit organization that is acting as the collective voice for open loop prepaid payments within Canada. So I know one of the questions was, well, what is open loop? So I might as well describe that. Let's go in there. I've never, before I met Heidi, I know she's like, oh, open, you know, she was explaining what her role was and what the company did. And I'm like, I have never heard of that in my life. Well, it's more of an industry term, but it gets confusing because when I first started out in the industry 10 years ago, and it was a brand new kind of payment segment, people didn't know what to call it. So they called it prepaid credit cards.

Yeah. kind of payment segment, people didn't know what to call it. So they called it prepaid credit cards because they looked like credit cards and they were prepaid. But prepaid and credit is an oxymoron. Right. So we quickly as an industry had to move away from calling it prepaid credit cards. So then we called it prepaid cards. And then people like, well, are prepaid cards, it's like a prepaid Visa card, the same thing as a Home Depot card? Exactly. And they're absolutely not. So they both have a prepaid component to it,

but the infrastructure and everything behind it is radically different. So Open Loop refers to cards that are on the Visa or MasterCard or American Express networks. Internationally, it could be on Discover, JSC, and those are the predominant networks right now. And in essence, it means that anywhere that accepts those networks, you can make a transaction at. Unless, for whatever reason, there's some documentation and decencies of certain places where you cannot use it. But otherwise, it's accepted everywhere Visa and MasterCard is accepted. So that's the term open loop.

And then closed loop is what we use for store cards, Starbucks cards, Tim Hortons cards, Home Depot, the keg, whatever it may be. Now why do you want to kind of explain a little bit more? So why are those like, say a Visa gift card is called open loop and Home Depot, you know, gift card is closed loop. What, like what is the loop? The loop is, it's a good question. The loop is the loop in which you're able to pay and use it at. So the Home Depot card is only available to be used at Home Depot.

So it's closed within the Home Depot ecosystem. Right. So the stores, their online stores, what have you, where a Visa MasterCard is open at pretty much any merchant that has signed up to accept those cards, which is millions and millions of merchants. So it's open. It is more open. So that's kind of the differentiation. Yeah, that's the differentiation.

Anyway, so our organization only represents the open loop side. So the Visa MasterC, and American Express. And we did it to act as the industry voice, where we can help provide valuable financial information to help our consumers, business governments, understand more about the prepaid category and how to effectively use it. Yeah, because I'm so glad that I discovered about CPPO because this isn't something that a lot of people talk about. We talk a lot about credit and debit, but not too many people talk about the prepaid category. Why do you think that is?

Well, so number one, it's much, much newer. In the United States, it's been around for almost 20 years. Not quite. Canada, it didn't really start out until about 10 years ago. Even 10 years ago, it was quite small. And it's a niche type category still. And I think one of the important things to understand is just the differentiation between Canada and the United States for the use of open-loop prepaid cards. The United States has over 60 million people who are considered underbanked or unbanked. Underbanked is they don't really rely upon banks in a typical way. And unbanked is they don't have a bank account whatsoever. Wow.

How much did you say? 60 million? 60 million. Wow. That's the number that's been, yeah. Wow. Where in Canada, we have legislation that actually says if you have a valid government-issued ID, the banks must open an account for you. And that's not the case in the United States.

Banks can say, I'm sorry, we don't want your business. Really? Right. And absolutely. So that's one of the biggest differentiators. And as such, typically, when you when you look at market sizing between Canada and the United States, just for ease of numbers, we divide by 10. We're 10 percent the size of the United States. But in prepaid cards, because they have such a much, much larger underbanked and unbanked population, the prepaid category is significantly larger. Right. Because more people have been shut out of traditional banking, and this is an alternate banking tool that people can use that provides them all the benefits that they would get

typically with a bank account. Wow. That's amazing. I didn't realize it was that popular in the States or that there were so many people in the United States that were unbanked. Yeah, so Canada, it's a much smaller population and that's one of the biggest categories for the use of prepaid cards. But the interesting thing about prepaid cards is they can be used in so many different categories that doesn't require credit. So it can be a cash replacement. It can be a check replacement tool

so that you can get funds to people faster, quicker, safer. And it can be used as a spending tool. Yeah, because honestly, when I think of a typical, like a Visa or a MasterCard gift card, the kind of ways that I've used it in the past is for like a wedding present when I'm like, I don if you want to buy something online, then you have to put it in your bank account and then use another form of payment. So with a gift card, they can just use that online and stuff like that. So that's usually how I think about it is like gift giving. But I guess a lot of other people use it in very different ways. Yeah, so gift giving is probably the, well, it is the second largest category.

There's approximately about a billion dollars being used on open loop prepaid cards for that purpose for gift cards. Yeah. Right. So obviously it's a fairly big category. There's a lot of people like you who are like, I don't know what to get them. I'll give them a gift card. And the nice thing about that though, is when you give cash, right, well, what do people do with cash? Well, they put it in their wallet. Well, how do you differentiate the cash from the other cash that's in your wallet? And what's that cash being used for? Well, it could be used for groceries. You lose out kind of on that gift component, where when you give a prepaid visa card, you know, people might remember,

oh, Jessica gave me that card and I'm going to buy myself something special with that. And that's what you lose with the cash. And that's why I think it's as popular as it is for that exact reason. That's very true. Because whenever around Christmas or my birthday, God bless my parents who still give me cash.

And when I do that, I usually just put it in the bank. Yeah, and then it's gone. And you don't buy yourself anything with it. Yeah. Cash is very easy to spend, particularly when it's in a bank account. You've got lots of bills to pay. And prepaid cards, you don't necessarily want to pay bills. So what are some other ways?

Yeah. necessarily want to pay bills. So what are some other ways that people use prepaid cards? I'll give you an example. This may have been several months ago, but I was in a shopper's drug mart just waiting in line and this one person was talking to the cashier about trying to get a Visa gift card. And they said, oh no, it's really urgent because I have to pay my phone bill. And I'm like, oh my gosh, I would've never I would have never even thought that. Yeah, that is one way that you could, you know, pay a phone bill if maybe you don't have a credit card,

but you need to pay it by credit card or something like that. Yeah, I mean, typically, if you didn't have a credit card in the past, you weren't able to do any transactions via phone or online. So you think of all the people in the country who, whether they be new immigrants or teenagers, teenagers moving into their early 20s, people with bad credit that couldn't get credit cards in the past. They've been shut out of an extremely aggressively growing category of how to conduct payments. Because with cash, you can't do that. So yes, you can pay bills using your cards,

either online or over the phone. If you've got substantial amounts on the card, you can make reservations, whether it be at restaurants or golf courses or hotels and such. So it opens up a category or a way of spending. And as we know with online spending, that's just grown so, so quickly. But people have been shut out in the past because they didn't have access to an open-loop card or a credit card or a debit card. So that definitely helps facilitate transactions.

But the other way is, so there's cards, and this is the biggest category of spending, called reloadable open cards. These cards, you can load money on on a regular basis and use it almost as if you would be using a credit card for a bunch of your transactions without ever having to worry about getting into debt and the interest charges that come with that. And so we've seen this category very, very popular with millennials. And I think the 2008 financial, 2008, 2009 financial crisis is nine or 10 years old now, but there's many kids who grew up during that time and saw the financial stress that their parents incurred, particularly if they had a fair amount of debt. And what we've seen with millennials is they're gravitating more towards this type of card

where they can't get in the financial distress. There's no way. If you don't have the funds, you can't buy. It's that simple. So it really helps from a budgeting perspective. And I'm sure you know, and I know a bunch of people when we were young who just, they had a little too much fun spending on their credit cards and got themselves into a pretty big hole. Yeah. And it's tough to get out of that, particularly at a young age.

Yeah. Right. So, so this is a fantastic vehicle for that where people don't have to worry about that. Yeah. Well, I guess also too, this would be a good mechanism for teaching younger kids or like preteens

and teens how to, you know, not how to budget or how to, instead of just giving them cash and being like, this is your allowance or whatever, giving them a card, be like, this is the limit on it. You could call the number and find out what your balance is and stuff like that. Yeah, no, I think it's a fantastic tool for financial literacy and educating children in terms of how to budget. And here's a card that gives you the versatility to spend, but also prevents you from getting into spending trouble.

But it's interesting that the youth market is a very tricky one to kind of crack because, number one, it's really between the ages of 12 and 19 who use a prepaid card. But they're in two very distinct buying segments, right? The 12 to 15-year-olds, they want the parental controls on there so that the parents can see how they're spending and the parents can put money on. But when you turn 16 or 17, that's usually the last thing you want. So within that category, you can't just necessarily have a youth card because what works for one half of the category is the polar opposite for the other half. They want more privacy and they don't want their parents to be getting all of their statements and seeing how they're spending money. So it is sometimes a

difficult one to crack. And that's why you haven't seen many cards that are custom tailored for each one of those segments within you. It's typically just the same type of card for both categories. Get groceries delivered across the GTA from Real Canadian Superstore with PC Express. Shop online for super prices and super savings. Try it today and get up to $75 in PC Optimum Points. Visit superstore.ca to get started. Mm-hmm. You brought up that you can check your statement.

Actually, that's something I didn't know either. So if I had a prepaid Visa gift card, how would I be able to, I would be able to find the, like get a statement of what I purchased with that card? Yeah. So you can log on and look at your last transactions, much like you would with your existing credit or debit card, or you can go on and look at your statement online to see all the transactions and balance that you have. You could phone in and call and find out what your balance is. There are programs out there that will send you an SMS message to let you know what your balance on the card is, just in case you're running a little bit low on funds and you need to understand, okay,

can I afford to buy this? It's not always easy to remember exactly how much you have on the card. You know, the industry is really moving away from paper statements. They are fairly costly to administer. Most programs will offer you a paper statement option, but usually it's on a fee base. So I think it's $2 to receive that. But, you know, most millennials don't deal with paper anyway. It's true. The less paper, the better, because that just means I have to shred it later.

I'll just use their phones. Exactly. Everything's in email now. One question I had was, because these prepaid cards are connected to like a Visa or Amex or MasterCard, do they have any significance to, say, your credit rating or your credit score or not at all? Not at all. Not at all. It's not registered as a credit product. Right.

And therefore has no attachment to your credit bureau. And that in some ways is a good thing, but in some ways it's a bad thing as well. You can't build up a credit history. You can't build your credit using a prepaid card because it's not a credit vehicle. Right. Now, there are some innovative programs that I've seen internationally

where they are putting records in terms of how people are spending that they're using as kind of reports to try to qualify for credit the very first time saying, I've been using this type of product and here's my spending and this is how much I reload as a data input to help facilitate receiving credit. But that's not the norm. So quick answer. No. Yeah. Okay. So this is kind of, so what I'm kind of gathering is like, this is a kind of a product for if you, um, need a way to kind of budget, uh, and not overspend and not get into debt, but so it's kind of like training wheels a little bit. And so if you are, you do

need to build up that credit. Um, this is kind of like what you do beforehand to kind of maybe create some of those good spending habits. So when you can, you know, get a credit card, you know, kind of how to use it, even though it does. Yeah, no, it kind of works the same way a little bit than a credit card. But yeah, so I feel like that's, you know. It almost works with identical credit cards, yeah. Yeah. Yeah. The other category, which is kind of, I mean, there's a bunch of other categories. The other category that's kind of interesting for general purpose use is people who've had identity theft.

And they, particularly when they travel abroad to different countries, they're very nervous using a debit card or a credit card where if there is any theft on it, it has much greater implications to them. So they like using a travel card. If for whatever reason it got compromised, nothing can be done with it. It doesn't affect your credit. It doesn't affect your credit, doesn't affect your

bank account. Typically, the amount of dollars is significantly less than on the other products. So we do see an interesting category who just feel safer using prepaid cards when they travel, also for budgeting purposes as well. Some other categories are corporate incentives and rebates. So there's times where if you are a particular client and there's a promotion on, companies might send you out a branded prepaid card to reward your loyalty. Or if you made a referral to somebody to join Rogers or TELUS or Bell or whatever, you'll see programs out there where you will receive a prepaid card that actually has their brand on it. We've also seen a bit of government use for it, particularly when it comes to natural disasters. So obviously, this isn't a category that we want to grow because we don't want natural disasters. But, you know, for example, with Fort McMurray and the fires that were up there, that was

absolutely tragic. If the insurance money is trying to send money to your house, but you don't have a house anymore, it's difficult to receive your funds. So what we found is a lot of the governments, the Canadian Red Cross and other organizations would use prepaid cards as a means to give people access to funds that they don't have to rely upon receiving a check and depositing from the bank or anything like that. So it's a way to receive funds much, much quicker and at a very low cost for those organizations. I actually had it for the last job I was at. I think it was one of the holidays. They know, they usually give Christmas bonuses or holiday bonuses and, or a special kind of, you know, gift for everybody. And they gave everybody Visa gift card and it was quite nice. And I think they did actually specifically brand it for like that company because it was a pretty big company. And so they gave one to everybody in the company.

And it was actually kind of nice because again, if they had just given me some extra money and, you know, put it onto my paycheck, probably just would have put that in the company. And it was actually kind of nice because, again, if they had just given me some extra money and put it onto my paycheck, probably just would have put that in the bank. So it kind of like, oh, no, this is actually fun money. Let's do something fun with it. Yeah. And companies really like that because then you are associating the positive buying experience or consumer experience, and hopefully you have one, with them directly. So if it was given to you as a bonus and you get to buy yourself something, there's a greater appreciation for that bonus and recognition of the source of funds. If it's just being wire transferred into your account or directly deposited with your paycheck, you don't even notice it.

I remember getting my first initial bonuses as direct pain to my account. And I didn't even notice that it went in and I spent it before I was even aware that I had it, looking forward to my bonus still coming, only to realize, no, no, it's gone. It's gone. And that's what prepaid cards can help. It's something physical that you can see and something that you can treat yourself to. Definitely. One question I actually had, because you were talking a little bit about when people are traveling and they're kind of worried about they're getting their credit card

or debit card stolen. What happens if you have a prepaid card and you lose it or it's stolen? Is it just gone? You're just out of luck? Well, there's, there's two things. There are cards that you will register and cards that you won't register. If you're getting a, purchasing a gift card, you don't necessarily need to register that card with your name and address and such. You're just going to use it and spend it. If it's lost or stolen, it's gone, just like cash.

Because there's no way to tie those funds back to you as a person. When you get a reloadable card, you need to register for that card. And you need to do it to comply with banking regulations for know your client and anti-money laundering um so you have to do that anyways but the nice thing though is that if you do lose the card much like with a credit card um you can call and those funds will be secured oh that's nice cool good to know so it's a little bit better than cash because there may be the chance that you can register it and then you're not out of luck. Yeah. So most cards, if you're putting over a couple hundred dollars on it, they will be a type of reloadable card where registration is required. Absolutely. I guess, and one other question, because I actually, to test it out,

I got myself a gift card to, or a MasterCard just to, you know, try it out because it's been a little while since I tried them out. The one thing that I actually was, it took me a little while to like understand was say, you know, for me, honestly, I do a lot of my shopping online.

So that's why I'm like, oh, this is, you know, that's why I never use cash just because it just never works out for me. So, you know a lot of my shopping online. So that's why I'm like, Oh, this is, you know, better. That's why I never use cash just because it's, I just never works out for me. So, um, you know, using this, you know, uh, MasterCard prepaid card, I'm like, okay, this will be easy to do some shopping online. Um, the one thing I think I stumbled upon and it just like was a little like, because we sometimes call them visa gift cards. When you're on an're on a site, there will be a bit like,

do you have a gift card? And so I'd like type in the number. They're like, sorry, that doesn't exist. And I'm like, so it's not really, so it's the terminology that we're using, like it's a prepaid gift card, not totally accurate because it's not really a gift card. Those tend to be the closed loop cards

and open loop kind of has to be used as if it's a credit card. And that's, so when asked, what's your credit card? That's where you put the information. Exactly. Well, look at you with your knowledge of the terms now. Well, I know, right? I feel so much more knowledgeable. Open-loop, closed-loop, I know what both those mean now. Yeah, so there is, that is, I mean, that is a complication if it just says prepaid. Some

people aren't aware of the difference or the different terminology. So there could be that. Typically, if you are on a retailer's site, it will ask you for your Visa or MasterCard or Amex card number, which you can use for your prepaid card. If it's just asking for a gift card, then that typically will relate directly to a vendor or merchant. And another thing that sometimes these websites say is like, do you have a Visa debit card? What is that? Well, in Canada, that's trickier than elsewhere,

not particularly for bad reasons, though. So Canada, you know, 40 years ago or so, was quite innovative in the creation of Interac, about 40 years. And this now operated as a made-in-Canada debit solution or bank card solution for ATM cards and such. Most other jurisdictions around the world never created anything like that. So Visa and MasterCard then provided the technology to the banks

where people could withdraw from their bank accounts using Visa and MasterCard for spending purposes. So in the States, debit relates to something a little bit different than in Canada. Debit typically relates to a Visa, MasterCard, or Amex card that's tied to your bank account. I see. Now in Canada, we use Interac. Now several years ago,

as online spending became more predominant, you couldn't use your Interact card online or in other geographies. And so even MasterCard made a case to be able to provide those types of services. So now when you look at your bank card, which is a debit card, you'll see both the Interac and the network logo, whatever that network may be. And so now it's got you covered when you travel internationally and for making online purchases.

But from what I understand, Interac can do online purchases as well. Yeah. I just don't know if it says as many merchants. Yeah. So that's kind of the confusing part. I know. So most people will look at their cards going,

wait a second, it's Interac and a MasterCard. Yeah, exactly. It's like, there's too many options. But it's interesting because the technology behind the card knows which way to route it. So if you are going to an international location, even the United States, you use your card and the card automatically knows to use the MasterCard or Visa or Rails, if you will, for that transaction. So it's automatic and quite seamless. Definitely. Okay, go on will, for that transaction. So it's automatic and quite seamless. Definitely. Okay, go on.

That clears that up. I think most people listening are like, okay, cool. I know way more about open loop, closed loop, Visa debit cards, credit cards, all that stuff though. So I really appreciate you taking the time to come on the show and explain more about that before I let you go. Is there one thing that you want to make sure that listeners really understand and know that maybe a lot of people get it wrong or there's a misconception out there? Well, I think we covered a lot of the

misconceptions in terms of the open loop, closed loop, what a debit card is versus a prepaid card, how they're to be used. The one thing that I would encourage, and this just isn't with prepaid, but it's with any financial product that you're going to use, is read the product details and be aware of how it's to be used, when it can be used, when it cannot be used. Understand the fee structures. Now, there's regulations that have been put in place to help manage the fees, and the providers of prepaid cards must have that disclosed. Yes, and I think it is more apparent now. Like when I did purchase my MasterCard prepaid card, it was very apparent on the front. It's like, FYI, this is the fee you have to pay at checkout

just for having the card and to activate it. And I think a lot of people don't even know that there's a fee attached, but there is, of course. These companies have to make money. Yeah, exactly. I mean, there is a lot of technology and work that goes behind these types of cards, and there does need to be fees associated with it. But by understanding what that fee structure is, you can use prepaid cards

in a very, very cost-effective way, right? Where it will cost you less than potentially the regular bank fees that you may incur on your debit card, depending on what your check-in count spending categories are or your credit cards. So prepaid can be a very, very cost-effective use, but just know how to use it. Absolutely. I'm at fault. When I get my cards, I peel it off and activate the card and I throw away things without having to read it. So I'm at fault for this as well and I'm guilty. card, mortgage, loan, what have you. Read the details, understand what you're getting into, understand the fee structure. And if you do that, most products are designed that they can be cost effective. Absolutely. Okay. One last thing that just popped into my head right now, because I

wasn't sure if it was written down on the package of the card that I got, but do you, I know for like the, I guess, closed loop card, sometimes there is an expiration date. Is there an expiration date if you get an open loop card? Well, from what I understand, a lot of the provinces, I think all of them, have pretty much banned expiration dates on closed loop cards. Oh, good. Oh, good. Right? So they used to have expiry dates on them, and the government said no. Yeah. The governments were then trying to apply that to open-loop cards. However, just the way that the credit cards were created, they needed to have an expiration date, and then that applied to prepaid as well. So you'll see an expiration date much like you will on your credit card. However,

at the expiration date, that doesn't necessarily mean that your funds are expiring. It means that that card is expiring. So you can request another card to be sent out with your balance on it. Okay. Good to know. But that's just kind of the construct within the industry. Yes. Yeah. No, that makes sense.

Yeah. There's an expiration date for your credit card. So, of course. Yeah. Yeah. So it works the exact same way. Now, I encourage people, when you get a gift card, use it. Yes.

Go and spend it. Have some fun. That's what it's for. It's your fun money. It's your play money. You know, if you are in a financial bind, maybe it can help you out with that as well. But use the cards. Don't put it in the drawer.

Don't forget about it. Yeah. It's your money. Yeah, exactly. It's your money. Use it. Exactly. Well, what I was doing too was like, okay, how do I want to use this?

I make a list. I make a list of things that I've been meeting to get myself for a while and then just do some hunting online to find the best deal. And then I use the card. There we go. That's a fantastic idea. I have a running list. Use the money. Exactly.

Use the money. It's your money. Exactly. Well, David, thanks so much for taking the time to chat with me. It was super, super informative. And I think everyone knows way more about prepaid cards than they did before. My pleasure, Jessica. And if anyone does want to find out more information, I encourage them to go to the CPPO, just do a website search for it. And you'll find out a lot more about how

cards work. And we've got some interesting statistics of how people use cards as well. Absolutely. Great. Thank you so much. And that was episode 147 on the Mo Money podcast with David Eason, chair of CPPO. Find out more information about them. They've got a lot of great studies and research and information on their website, cpppo.ca. Again, CPPO stands for the Canadian Prepaid Providers Organization. So if you want to learn more about that, go to CPPO dot C-A. And again, I'm going to put more information about the things that we talked about in this episode in the show notes, jessicamorehouse.com slash 147. And yeah, I hope you really enjoyed this episode because I certainly did. I learned a ton

about a part of the personal finance world that doesn't really get talked about a lot. I don't know why, but it's something that we should all be more aware of. So I hope you really liked this episode. I will be back next Wednesday with a fresh new episode. Thanks again for listening and I will catch you on the flip side next week. This podcast is distributed by the Women in Media Podcast Network. Find out more at womeninmedia.network.