A Prepaid Card for Recovering Addicts

MasterCard’s new product aims to help former drug addicts use money responsibly. Does it work?

A close up of the three major credit cards, American Express, Mastercard, And Visa.
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[Read: Get-Out-of-Debt Resolutions for 2013.]

Will it work? Next Step is too new for a groundswell of success stories. Only about 40 people throughout the country are using the card, but a number of professionals who work in addiction seem hopeful about its utility.

Says Jonathan Alpert, a New York City psychotherapist and author of Be Fearless: Change Your Life in 28 Days, "The card has its benefits ... It does help to control negative behavior." But Alpert is concerned that the card might create a false sense of confidence and set someone up for a relapse later, when they resume spending their own money.

That dovetails with concerns Acquavita has. Prepaid cards don't improve credit scores, which, she says, "is often what people in addictions need after facing financial issues." She also isn't crazy about the fees, of which there aren't many, but there are some. For instance, it does cost $2.95 to talk to a live agent.

On the other end of the spectrum is David Sack, an addiction psychiatrist and CEO of Promises Treatment Centers, who believes the card could be just what the doctor ordered.

"Parents and loved ones often try to help the recovering addict get back on their feet by providing financial assistance, which in a moment of weakness gets spent on drugs and alcohol," says Sack. "The Next Step [prepaid] card could give those who want to help a way to provide support without enabling and, at the same time, help recovering addicts develop life skills, which is particularly crucial in the difficult early stages of recovery. While there is no fail-safe tool that can prevent relapse, this card will provide those who are motivated to stay sober and become financially independent with some of the information and tools they need to do so."

[Read: The 5 Best and Worst Prepaid Cards]

About that fee... As noted, the card comes with a $14.95 monthly maintenance fee. There is also a $9.95 purchase and activation fee, as well as other miscellaneous fees. For example, it costs $0.75 to transfer money from your bank account, yet it's free to load it from your debit or credit card.

"Most prepaid cards make their revenue off of their ATM fees, and we don't have that," says Dresdale. "They can't cash out of the card in any respect, so our revenue has to come in a different way."

It's also worth noting that the fees aren't paid by the recovering addict. The charges come out of the money on the card, which is presumably funded by a guardian. Either way, parents and those recovering from a long descent into an addiction probably feel that for years, they've been throwing their money into a matrix of vices and bad decisions. For some hopeful parents, spending approximately $15 a month is a small, irrelevant fee to help put a loved one back on track and make sure the monthly budget doesn't fall into a drug dealer's hands.