While prepaid debit cards have been around for a couple of years, finding ones to recommend has been difficult.

For the most part, issuers of these cards charge what we consider to be outrageous fees for everything from setting up your card to each use of it, whether you're buying a snack at your local convenience store, enjoying dinner at a London restaurant, or stocking up on a week's worth of groceries.

Paying such fees counteracts the benefits that the card issuers tout. And the outrageous cost is why we typically don't like these cards.

The one exception is the Walmart MoneyCard, which charges far more reasonable fees than any of the other cards we've seen.

Prepaid debit cards have a lot in common with gift cards or prepaid calling cards. Your money is held in an account and managed by a bank.

But obtaining a prepaid debit card is more like opening a bank account. You'll need to provide your address, phone number, date of birth and some form of government identification, such as your Social Security number if you're a U.S. citizen or your passport number, personal tax ID or driver's license number if you're not.

You can apply over the phone, online or in person; at check-cashing stores; at Winn Dixie and Dollar General Stores for the Discover Network Card, or, of course, at Walmart.

Some outlets, like Western Union, can approve your application and provide a temporary card and personal identification number right away. Others might require a couple of weeks to get a card and personal identification number to you through the mail.

The owner's name is embossed on the front, just like a regular debit or credit card, and can be used to:

• Withdraw cash at ATMs.
• Make purchases with a PIN, as with a traditional debit card.
• Sign for purchases, as with a credit card.

Users can repeatedly replenish the account by depositing more money.

The credit card companies are pitching prepaid debit cards to three groups of potential users:

Travelers: Use them as an alternative to traveler's checks. Lost or stolen cards and their full balance will be replaced, most of the time. All you've got to do is promptly report the loss or theft, usually within two days. And since prepaid debit cards aren't linked to any of your bank accounts, or any of the personal information they contain, bad guys have no way of stealing your identity.

Low-income consumers: They're a safe, convenient alternative to carrying cash if you don't have a checking account and a regular debit card, or even a credit card. You can also pay bills online, rent cars or reserve hotel rooms -- transactions that require you to have some sort of plastic.

Employers: Replace paper paychecks with prepaid debit cards. You'll save money on printing, mailing and issuing replacement checks. All you have to do is issue each worker a card that can be reloaded each pay period.

All of that sounds great until you read the fine print and see the startling array of fees awaiting you:

• Activation fee: $3 to $49, although some waive the setup fee if you sign up for direct deposit.
• Monthly maintenance fee: $5.95 for plans that also charge transaction fees to $9.95 for plans that include unlimited signature and PIN purchases.
• Annual fee: Some cards offer the option of paying a single annual fee of $69.95, but we've seen cards charge as much as $119.40 if you want your payment info sent to the credit reporting agencies to improve your credit score.

• Signature purchases: If you use the debit card like a credit card, meaning you sign your name on a slip of paper the merchant keeps, you'll pay up to $1 per transaction.
• PIN purchases: If you use your debit card like a traditional debit card, punching in your personal identification number to withdraw cash or make a purchase, up to $2 per transaction.
• ATM withdrawals: In addition to a fee for making a withdrawal, which is generally around $2, you'll also pay a fee to the ATM owner. International ATM withdrawal fees range from $3 to $4.95.
• Loading and reloading: An increasing number of cards will drop this fee if you have a paycheck direct-deposited to your account. That's one of the best trends we're seeing with prepaid debit cards. Otherwise, putting more money on the card costs $3.95 to $5.95.
• Refunds: If you change your mind and want the balance on your prepaid debit card returned to you, you'll pay $5.95 to $10.
• Balance inquiries: You can find out your balance online (free), by phone (50 cents or more) or at an ATM (surcharge applies).
• Customer service: Want to speak with a live person about a problem? Up to $2.
• Statements: Electronic statements are usually free, but paper statements that come in the mail can cost $1 to $5.95.
• Replacement cards: $3.95 to $10. Need it right away? Add another $20 for express mail.
• Online bill pay: 49 cents to $1 per transaction. One card charges $4 a month, any month that you use the service.
• Inactivity: That's right. If you don't use it for a few months, you'll pay for that, too. Around $2 each inactive month.

Let's face facts: Although prepaid debit cards have improved, we can easily see why banks and credit card companies love these things. Before you reciprocate, read the fine print.

By Darci Smith

Interest.com Contributing Editor