3OYS: Prepaid credit cards may come with pitfalls

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By Christina O'Haver By Christina O'Haver

PHOENIX -- Have you ever used a prepaid credit card? If you have, you're not alone. Many consumers find that prepaid cards help them stick to a budget. 

But as convenient as prepaid cards are, there are pitfalls to using them sometimes. Just ask a Valley woman named Dawn Ericksen.

She is a single mom and says she lives paycheck to paycheck.

“I've been raising my kids on my own all this time," Ericksen said. "My son is 20. My daughter is 16.”

To save money, Ericksen doesn't even have a car and walks to catch the bus.

"It's about a 15-minute walk down here to the bus stop at 5 o'clock in the morning," she said.

Another way Ericksen thought she could save money was cutting her cable bill and switching to DIRECTV, a satellite provider.
   
So, she called the company.

"Whoever I talked to told me that it would be a $1 to set up service here and she asked me for my credit card information," Ericksen said. "I gave it to her and she said, 'We don't accept that card. Can you go get another card?' "

The card DIRECTV didn't accept was a prepaid American Express card that Ericksen had a few hundred dollars on.

But since DIRECTV didn't accept prepaid cards, Ericksen said she canceled her request for service and hung up.
   
Unfortunately, though, she said the satellite provider actually took $400 from that card anyway.

"They took everything I have," she said. "I can't even feed my kids."

Ericksen said she immediately contacted DIRECTV but no one helped her.

"I called them and they can't find the transaction," she said. "They are refusing to give me my money back.”

Less than a day after taking the money, DIRECTV refunded Ericksen her $400, but how did the mistake happen in the first place?

In an email to 3 On Your Side, a spokesman said it was a mistake that was quickly resolved. He said consumers “should alert the care representative in advance" whenever using a prepaid card for purchases.
   
Ericksen said she may have only been out $400 for a day but she's glad the ordeal is over.

"It felt really good to get it back," she said.

We appreciate DIRECTV putting the money back as quickly as they did and without 3 On Your Side's direct involvement. However, it is a good reminder that prepaid credit cards can't be used for all transactions.