Pre-paid debit cards seem like a good enough idea: You hand over cash and, in exchange, receive a debit card loaded with that amount of money.

Well, that amount minus a fee for setting up the card.

Then, you're free to use that card like you would cash, with no strings attached to any checking or savings account.

Well, not really free. Because you'll likely be assessed more fees each time you use the card, 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.

That's why we don't have much use for them and don't see why you should ever bother with one.

Pre-paid debit cards are the newest, heavily-hyped product to emerge from the credit card and banking industries. They're a type of stored-value card much like gift cards or prepaid calling cards. Your money is held in an account and managed by a bank.

But unlike gift cards, getting a pre-paid debit card is a tad more complicated. Since your name is imprinted on the card, you have to "apply" for one over the phone, online or at a check cashing store.

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.

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

Once in your hands, you can use the card to withdraw cash at ATMs, or swipe them through cash registers, choosing to use your PIN, as with a traditional debit card, or to sign for a purchase, as you'd do with a credit card. You can repeatedly replenish the account by depositing more money.

The credit card companies are pitching pre-paid 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 pre-paid 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 regular debit card, or even a credit card. You can also pay bills on-line, rent cars or reserve hotel rooms -- transactions that require you to have some sort of plastic.

Employers: Replace paper paychecks with pre-paid 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. To get it all started: $5.95 to $49.

• Monthly maintenance. Up to $5.95 for plans that also require you to pay a transaction fee every time you use the card; $9.95 for plans that include unlimited signature and PIN purchases. (Annual plans available for $69.95.)
• 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 $3.50 to $4.95.
• Loading and reloading. Putting more money on the card, $3.95 to $5.95.
• Refunds. If you change your mind and want the balance on your pre-paid 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 in the mail can cost $1 to $5.95.
• Replacement cards. If you misplace your pre-paid debit card and want it replaced, it'll cost you anywhere from $3.95 to $10. Need it expressed? Add another $20. It's probably best to keep track of the first card you're issued.

In our mind, those fees offset any advantages.

If you're traveling, just take one of your regular credit cards with you.

And how can we recommend pre-paid debit cards to low-income consumers who can least afford big bank fees? Almost anyone could save money with a real bank account, complete with checks and a traditional debit card.

So, is there anything pre-paid cards might be useful for?

Maybe one.

If you have lots of employees without bank accounts, you might help yourself and your workers by switching from paychecks to pre-paid debit cards.

Those employees often take their paychecks to check cashing stores. A recent study by the Brookings Institution found that check-cashing customers in 12 cities, including Chicago, Atlanta and San Francisco, paid $5 to $50 to cash a $500 check.

Giving those employees a pre-paid debit card, with clear instructions to take all the money from it in a single transaction at an ATM machine, might save a few bucks.

But that advantage is quickly lost if employees are expected to pay activation or monthly fees, or if they use the card more than once and start ringing up transaction charges.

There is certainly no advantage for employees that have bank accounts and can cash or deposit their paychecks for free. Every dollar spent accessing your money on a pre-paid debit card is a dollar wasted.

We've even spoken with a lawyer whose client wanted to pay with a pre-paid debit card. We urged that attorney to just say: "No." Which she did.

Let's face facts: We can easily see why banks and credit card companies love these things. We can't see why you should.

By Darci Smith

Interest.com Contributing Editor

Have a question about your finances? Ask us at editors@interest.com