American Express’ Bluebird card soars past rivals in Consumer Reports’ first ranking of prepaid cards

American Express’ Bluebird prepaid card is flying high.

Launched last year, Bluebird with direct deposit took the No. 1 spot in Consumer Reports’ first ever ranking of the country’s best – and worst – prepaid cards.

Also making the top five in a list of 26 cards were the H&R Block Emerald Prepaid MasterCard, the Green Dot Card and two versions of the Approved Prepaid MasterCard from personal finance diva Suze Orman.

Consumer Reports decided to apply its famous product evaluations to the prepaid cards biz at a time when the industry is soaring in popularity.

Prepaid cards – cards that can be used to pay bills, make purchases or withdraw money from ATMs, but are not tied to traditional bank accounts – represent the fastest-growing segment of the payments industry.

The prepaid cards industry is largely unregulated – the Consumer Financial Protection Bureau is now considering imposing rules – and has fewer consumer protections than debit and credit cards.

Even so, last year prepaid cards were used 1.6 billion times for $ 77 billion worth of transactions, Consumer Reports said.

Once considered fringe products used by those who couldn’t open a banking account, prepaid cards are increasingly being embraced by consumers who are balking at bank fees and who need a means of receiving electronic payments.

“The market is growing and there seems to be a more diverse mix,” Michelle Jun, senior attorney at Consumers Union, the publisher of Consumer Reports, told the Daily News.

The consumer mag evaluated the 26 cards based on their costs, convenience – such as how widely the card network brand is accepted – whether funds are protected with FDIC insurance and how well fees are disclosed.

On the plus side, Consumer Reports found that overall fees are coming down, and a number of cards offer the same features you would get with a bank account, such as mobile deposits.

On the negative side, fees are often poorly disclosed. “Some are absolutely terrible,” Jun said.

Bluebird got big props for having “incredibly low fees,” Jun said.

Overall, the top three cards on Consumer Reports’ list have relatively few fees. The Green Dot Card has a waivable monthly fee. Neither Bluebird with direct deposit nor the H&R Block Emerald Prepaid MasterCard assess any monthly fee.

All were considered convenient and carry FDIC insurance. And they all had easily accessible, clearly stated fee information that lets you do some comparison shopping.

Dead last on the list was another offering from American Express, the American Express for Target prepaid card.

All of the cards at the bottom have high unavoidable fees and make it hard for consumers to learn about them.

To see the ratings go to http://bit.ly/11Yg5s8

pfurman@nydailynews.com

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Top Five:

Bluebird with direct deposit (American Express)

H&R Block Emerald Prepaid MasterCard

Green Dot Card (Green Dot Bank)

Approved Prepaid MasterCard (Suze Orman) with direct deposit

Approved Prepaid MasterCard (Suze Orman) without direct deposit

Bottom Five

U.S. Bank Convenient Cash Card

AccountNow Gold Visa Prepaid Card (MetaBank)

Reach Visa Prepaid Card (Tom Joyner)

Redpack Mi Promesa Prepaid MasterCard

American Express for Target

Source: Consumer Reports