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CTA Announces Ventra Card: Why You Should Look Askance

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Recently, the Chicago Transit Authority announced a new all-purpose transit card: the Ventra, which can be used for CTA and Pace bus and train rides. You can also use the Ventra card for everyday purchases – but you really shouldn’t. As a transit card, the Ventra suffices, but it simply is not a solid choice for prepaid debit.

Shrouded fees gouge consumers

On its surface, the Ventra card is fairly low-cost – there’s no monthly maintenance fee, and you can load cash for free at transit stations. Yet there are any number of hidden fees facing potential card users:

  • $2 live customer service fee
  • $1.50 ATM withdrawal fee – and this does not include ATM owner surcharges, which can add $2 or more to the cost of getting cash
  • $6 check refund fee, should you decide the card’s no longer worth your while
  • $5 card replacement fee
  • The cost of loading the card with cash – $3.95 at Western Union, which is one of the cheaper options out there
  • $2 per month dormancy fee, levied after 18 months of inactivity

The “typical” cardholder, as defined by industry analysts at Bretton Woods, would pay around $22 a month to use the card. This includes:

  • 2 cash loads per month at Western Union
  • 2 ATM withdrawals per month, including the industry-average $2.40 owner surcharge
  • 3 customer service calls per month

Our prepaid debit card comparison tool actually gives the Ventra card an advantage – we assume you don’t use customer service. Even then, though, the cost of cash loads and surcharges add up to $188 per year, or $16 per month.

It’s important to note that most of the cost doesn’t come from fees levied by the Ventra itself – instead, the cost comes from ATM surcharges, cash loads and other “shrouded” fees. Remember, too, that you’ll have to pay an ATM owner surcharge for balance inquiries and declines, further adding to the cost.

Ventra vs. MoneyCard – apples and oranges

The Ventra card is often favorably compared to the Walmart MoneyCard. Such a comparison can be misleading, though – it’s accurate only if you don’t load with cash and don’t withdraw from ATMs. The MoneyCard levies a $3 monthly fee, waived if you load $1,000 onto the card every month, but charges no ATM withdrawal fee at MoneyPass ATMs and lets you load with cash at Walmart for just $3, compared to the standard $3.95-$4.95. Most importantly, you can use MoneyPass ATMs surcharge-free. This means that a balance inquiry costs $2.40 with the Ventra, compared with $1 with the MoneyCard; withdrawals are $3.90 with the Ventra and free with the MoneyCard (inclusive of the $2.40 average ATM surcharge, and assuming the MoneyCard is used in-network).

Clearly, the Ventra card is better than the MoneyCard only if you look at fees levied by Ventra itself, not the total cost to the consumer.

Comprehensive comparison: Ventra vs. other prepaid cards

And should you decide to go prepaid, you can get far better offers than the Ventra. For example, the American Express Bluebird has no customer service, card replacement, inactivity or check refund fees. It charges $2 per ATM withdrawal for those who don’t use direct deposit, but there are no surcharges if you use MoneyPass ATMs. Even non-direct deposit Bluebird users can therefore withdraw for a lower fee than Ventra cardholders. (It’s worth noting that with the Ventra, you can get cash back for free at a grocery store, a capability absent from the Bluebird.)

Update: As of today, Bluebird funds are FDIC-insured, and you can also write pre-authorized checks against your account.

Heavy users would be better served by, say, the Chase Liquid. It levies a $4.95 monthly fee, but in return, you’ll get free ATM withdrawals, paper statements, replacement cards, check refunds, customer service – need we go on? There’s no dormancy fee, either. A potential Ventra cardholder who makes two ATM withdrawals a month would be better off with the Liquid’s monthly fee than the Ventra’s myriad shrouded ones.

In sum, the Ventra is a fine transit card – just don’t try to use it to get cash from an ATM, don’t load the prepaid card with cash, and don’t lose your card. You’re far better served by mainstream financial products like debit cards, or a lower-cost offer if you’re absolutely determined to go prepaid.

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