2 fees dropped, but CTA's Ventra card still pricey
By Jon Hilkevitch, Chicago Tribune reporter
March 26, 2013
The CTA announced Monday that two controversial fees are being dropped from the prepaid debit MasterCard account that customers can link up with the transit agency's new Ventra fare card starting this summer.
The two service fees that will not be imposed after all, even though they remain available for reinstatement as part of the CTA Ventra contract, are a $2.95 charge to reload the Ventra prepaid debit account online using a personal credit card and a $10-per-hour charge for "account research" to resolve billing discrepancies, CTA officials said. Both services will now be provided for free, officials said.
But the easing of charges doesn't place Ventra among the top-notch debit cards offering the lowest fees, according to an analysis conducted for the Tribune by a leading rating service. Low-income people should know that before they sign up for a Ventra debit account, experts said.
The Ventra debit card will cost consumers who use the account about $188 a year in various fees, said Anisha Sekar, vice president of credit and debit products at NerdWallet.com, a highly rated credit-card comparison website that did the analysis for the Tribune.
By contrast, the No. 1-rated prepaid debit card on the market, offered by U.S. Bank, carries ancillary fees averaging $39 a year, based on similar use patterns in terms of activities that include ATM withdrawals and customer service calls, NerdWallet.com said.
The Ventra MasterCard ranked the 16th least expensive among 59 prepaid debit cards analyzed by NerdWallet.com.
"The Ventra card is not a very good deal for consumers," Sekar concluded, adding that it "is not very consumer-friendly."
"It is not as bad as the worst of the worst, like the Kim Kardashian debit card that was taken off the market (because of its oversize fees). But it is definitely not the best one out there for consumers," Sekar said.
Ventra's online reload fee and the account research fee were deleted from the program sometime last year, well before CTA revenue director Eric Reese told the Tribune last week that they still were active, CTA spokesman Brian Steele said Monday.
"In the course of a deadline media inquiry involving numerous detailed questions, we unfortunately provided information that wasn't current," Steele said.
As to whether those fees could be added back based on changing debit card industry market conditions, "It's not part of the Ventra program (today), nor do we have plans to alter the fee schedule," said Kwiyoung Baumgarten, a spokeswoman for First Data Corp., the payment processing company that will handle Ventra transactions.
Almost a dozen other debit-related "convenience charges" and fees will remain, officials said. They include a $1.50 ATM withdrawal fee, subject to additional charges from financial institutions owning the ATMs that average $2.40; and a $2 charge to speak with a "live" person in Ventra's customer service department. Phone calls will be free to an automated system where the caller is prompted to choose among numerous options, officials said.
Sekar's conclusion that Ventra is still relatively pricey because of convenience fees and other ancillary charges contradicts statements by CTA officials that the debit card option to be introduced as part of the new Ventra fare-payment system on CTA and Pace represents an excellent value overall.
CTA President Forrest Claypool told the Tribune last week that the Ventra debit account will prove to be an invaluable tool for low-income Chicago-area residents who do not own credit or debit cards.
Claypool said the Ventra debit card fees "are exactly the same as any other debit card fees associated with the one you have in your wallet, except in many instances (Ventra's fees are) lower. They're no different.
"People can make an informed choice of what's best for them. We think some people may decide this is better for them because it is cheaper," Claypool said. "We think this is a tremendous benefit to low-income customers."
But according to the side-by-side comparison of debit cards conducted by NerdWallet.com, only prepaid debit cards on the middle to higher ends of the spectrum impose charges that exceed Ventra's debit account. The fee structure at a few debit card companies can result in customers paying more than $400 a year to use the card, according to the ratings.
The assortment of "convenience fees" and other charges that consumers should expect as a result of using the Ventra debit account come out to $15.67 a month, or $188 annually, NerdWallet.com found.
Ventra debit accounts will be issued and managed by MetaBank, a federally chartered savings bank headquartered in Storm Lake, Iowa.
Cubic Transportation Systems Inc., based in California, was awarded a $454 million CTA contract in 2011 to create the new fare-payment system with the optional debit account. More than 2,000 Ventra vending machines and kiosks will be deployed in Chicago and an additional 500 devices in the suburbs, officials said.
The $15.67 a month in expected fees racked up by a Ventra debit account customer are based on the card being held for one year, two ATM withdrawals per month and three customer service calls per month, NerdWallet.com said.
Examples of the fees linked to the Ventra debit account include ATM withdrawals, monthly fees if the account is not reloaded at least once in 18 months, telephone inquires to Ventra's customer service center and requests for a paper copy of monthly statements.
But additional ATM fees apply, as is the case with most other debit cards on the market too, officials said. For instance, an ATM surcharge levied by the ATM owner is added, usually about $2.40, for every withdrawal or for each balance inquiry, Sekar said. That would put the cost of an ATM withdrawal or balance inquiry to about $3.90, she said.
Another fee will be charged to use cash to reload the Ventra debit account. The fee could be as high as $4.95, officials said. No fees are charged to add money to the transit account on the Ventra card.
NerdWallet.com's comparison of prepaid debit cards is at nerdwallet.com/prepaid
"The Ventra debit card will cost consumers who use the account about $188 a year in various fees"
"The CTA announced Monday that two controversial fees are being dropped.....almost a dozen other debit-related "convenience charges" and fees will remain, officials said."
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