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New American Express Serve: the Best Prepaid Debit Card Around?

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Aw nerds! It looks like this page may be out of date. Please visit NerdWallet’s updated American Express Prepaid Serve page.

American Express announced new changes to its Serve prepaid card that make it one of the best options out there, period. We’ll break down the changes to the Amex Serve, compare it to other options and explain why the Serve might just be the best option for the underbanked.

What’s new with the Serve?

The new Amex Serve prepaid card cut its fees drastically. Most noticeably, they’ve removed many of the so-called hidden costs of prepaid cards: those not charged by the issuer, and therefore aren’t listed on fee schedules, but still substantially drive up the cost for consumers. The primary hidden fees are ATM surcharges and third-party cash load fees. Amex has nixed those charges by allowing surcharge-free withdrawals from the MoneyPass ATM network and free cash loads in CVS and 7-11 locations. This is key for the underbanked, who often struggle to find no-cost ways to load and access their cash.

Here’s the updated fee schedule for the Amex Serve:

  • $0 to purchase online or at select retailers through 2013, $2.95 after December 31st, 2013
  • $1 monthly fee, except in NY, TX and VT; waived if you direct deposit or load $500 in the previous month
  • $2 out-of-network ATM withdrawal fee
  • 2.7% foreign transaction fee

It will also boast a few new features:

  • Direct deposit
  • Mobile check deposit (available later this year)
  • FDIC insurance
  • A linked savings account, called Reserve (get it? Reserve? I thought it was cute) which allows you to set up one-time or recurring transfers from your Serve account and encourages saving
  • No-fee withdrawals from MoneyPass ATMs
  • No-fee cash loads at CVS and 7-11 locations, using the Vanilla Reload Network
  • Online or mobile bill payments

The new fee structure makes the Amex card much more consumer-friendly. I myself have the Bluebird (I mostly use it for mobile check deposits, because my credit union isn’t very tech-savvy), which comes with a $2 ATM withdrawal fee if you don’t use direct deposit. If I considered the Bluebird worthwhile, I’d say the Serve is even better.

The Serve isn’t perfect, and the primary reason is in its name. American Express isn’t as widely accepted as Visa or MasterCard, so someone who relies on it for their one and only source of plastic may find themselves turned down every so often. Other than that, though, it’s a great option for prepaid.

The Serve compared

The fee schedule listed above doesn’t quite capture how the Serve compares to the rest of the market. Here’s a breakdown most-incurred fees, comparing the Serve to the average of the 58 cards in our database:

Fee Amex Serve Cards with Monthly Fee Cards with No Monthly Fee
Card purchase $0 online
$0 in stores through 2013
$2.95 after December 31st
$3.60 $3.02
Monthly fee $1, waived with direct deposit or $500 monthly load $6.16 $0
Cash reload (third-party fee) $0 $3.62 $3.35
ATM withdrawal* $0 $2.83 $2.88
ATM balance inquiry* $0 $1.84 $1.65
PIN purchase $0 $0.14 $0.50
Signature purchase $0 $0 $0.39
Foreign transaction fee 2.70% 2.26% 1.70%

*If the card does not have a surcharge-free ATM network, we added an estimated $2 surcharge to the cost of the withdrawal. This estimate better reflects how much it costs to the consumer, rather than reflecting how much the issuer charges.

I’m actually really impressed with American Express for taking aim at the shrouded third-party fees. Most of the time, when prepaid debit issuers complain that our fee estimates for their cards are wrong, they say that they don’t charge cash load or ATM surcharge fees. My argument to them is that it doesn’t matter who charges the fee – the consumer only cares about the cost to them. I’ll give them credit for addressing a fee that most consumers don’t see until after they purchase the card.

Based on our usage estimates, the Amex Serve is the cheapest prepaid card out there, even beating out the relatively affordable, $3-a-month US Bank Convenient Cash.

We have many complaints about the prepaid debit industry, but they typically boil down to this: They’re usually high-cost, and they often don’t encourage people to save in the same way a savings-checking account combo can. But the Amex Serve addresses both of those concerns, offering a linked savings account as well as a relatively affordable product.

  • unknow

    BEWARE!!! DO NOT GET THIS CARD!!!! THEY WILL CLOSE YOUR ACCOUNT FOR NO REASON AND KEEP YOUR MONEY!!!! THE GIVE YOU THE RUN AROUND AND TELL YOU NOTHING!!! I STILL HAVE NOT GOT MY MONEY FROM THEM!!!! THIS IS A BAD CARD!!! WOW AMERICAN EXPRESS!!! WAY TO STICK YOUR FOOT IN YOUR MOUTH!!!!

  • Paul Michael Carr

    I have had my serve card for about 6 months and I really do love it. I am able to send and receive money with family easily, get direct deposit, its inexpensive and they have really great customer service. I highly recommend it.

  • katina

    I agree with you completely i have similar problem i had my tax refund put on my serve card and when i tried to pay off some of my bills i found out that no one excepts AE OR SERVE . i tried to transfer funds to another prepaid card that i have and they wouldnt do it so my electricity was turned off. Thanks to serve and bills here paid late. Its my money and i feel that if i want it then no one has the right to keep it from me i earned that money not serve

  • Yelena Milskaya

    I had this card for a coupe of months now and I must say it was a mistake to get it. Yes, reloading the card is somewhat easy – Seven Eleven etc… But if you try to do something advanced, like getting a money transfer from someone not in the Serve system, you’ll be disappointed. No such option exists. The Direct Deposit option is no good for this (and frankly, it wasn’t any good for my employer, who refused to do a Direct Deposit because “Serve” is not a “real bank” and their direct deposit info is not accepted by most corporations when it comes to payroll). So, if you are looking for a truly versatile prepaid card, keep looking!

  • mattvorwald

    Keith, no. I had the permanent card. Amex Serve cancelled $2400 worth of bill payments I had requested without notifying me in any way. Then they forced me to wait 10 business days before opening a dispute. It took 3 hours on the phone once they would finally discuss opening a case. At this point they are telling me someone will contact me in 3-5 business days to discuss the case. Meanwhile I don’t have access to my money, and my landlord doesn’t have the check that was my rent. Amex Serve customer service is possibly the worst of the worst when it comes to anything financial. Never had any experience like this before with any bank. They are fully incompetent, and people should rightly steer clear of the train wreck.

  • IrishMama

    This is the WORST card ever. They allow you to load up to $100,000 a year and spend $100,000 a year. However, you CANNOT spend more than $15,000 a month. Once you hit that limit they won’t give you any more money from YOUR account. So I used it for travel and got a bonus added to it. Now that I got my paycheck direct deposited I need to get my money transferred to my bank. Nope! Not this month! They are holding my money and will not allow me to withdraw it from my account until April1! BS! Don’t ever do business with American Express they are theives.

    • Mia

      I can’t wait to see how it feels to be pissed off because I have reached my spending limit of $15,000.00 a month.

  • REAPERSOFTHEGRIMMS

    lol The “demon of the desert” gives instruction on where to get your money.

  • ChristyandKeith Fobert

    I agree I got my card back in November 2014, and have had no issues with it… I had my tax refund deposited to the card and had no issues there … Customer service has been very helpful

  • Mia

    I use this card in lieu of my credit cards or cash. I got the Amex Serve to keep my spending habits under control. It’s great for booking hotels, spa appointments, and especially reacquiring monthly debits such as gym memberships. I use the Serve Card to keep from having my credit cards being kept on file. The recent credit card security breaches at major retailers and companies has made me rethink allowing my credit card information being kept on file.

    I feel more in control of my finances. Since identity theft is the crime of choice, I feel more secure using the Serve Card because I preload what I will use or what is needed at the time of purchase. I do not substitute the card for a checking account. I do not load large sums of cash or have direct deposits post to my card. There is nothing wrong with that but do your homework. Understand how to use the card. Before making purchases make sure they accept Amex. As far as the limitations I am reading about regarding atm withdrawals, making purchases, and money withdrawals all financial institutions have a withdrawal and purchase limitations for your protection to prevent fraud.

    As for the atm fees I’m reading about. My bank has a fee if I use the atm at any location other than theirs. The other institution will charge a fee as well. From what I am reading I think there is a lack of understanding of what the Amex Card is, how it works, and how it should be used.

  • Adam Johnson

    Worst customer service I have ever experienced. They would not approve me to connect my external checking account to transfer funds because I don’t have a US passport or drivers license. I closed the account with zero funds in it. Support agents were rude, unhelpful and not aware of the card policies. To speak to a supervisor you have to wait up to 48 hours. I strongly do not recommend.