When Coral Zarrillo received a $50 prepaid Master Card as a gift from her grandmother last Christmas, she didn’t think much about it until months later when she went to use it on iTunes, only to discover much of its value had been drained by fees.

“I was not happy,” the 18-year-old Coquitlam resident said.

“I was confused because I hadn’t used it at all, so my first instinct was, like, someone else took it and used it.”

However, in looking up the card’s account online, Zarrillo discovered that the card’s issuer was deducting monthly maintenance fees of more than $4 from the money her grandmother had loaded onto it.

Zarrillo said she thought the card, issued by People’s Trust under the brand name Vanilla, would work something like cards for prepaid minutes on a cellphone, which you have until you use them.

It was only after discovering that her gift Master Card was being drained that Zarrillo read the back of the card and discovered exactly what fees were attached to it.

Both Master Card and Visa offer such cards, but the cards are issued by banks, other financial institutions or companies, and it is the issuers that set fees.

Prepaid cards can be an alternative to carrying cash; however, consumers need to be aware of the costs attached to them, which can outweigh the convenience of using them.

It is not Visa that sets fees, Sue Whitney, head of new products for Visa Canada wrote in an email.

Issuers are required to clearly list fees, but so far consumer-protection authorities have not put limits on fees, which can include activation fees, transaction fees and monthly maintenance fees when cards aren’t used and can all eat into a card’s balance.

Fees can vary widely. RBC Royal Bank, for example, made a point last fall of eliminating all fees except for a $3.95 activation fee, which was an action the company took ahead of expected new regulations on the products.

The Titanium prepaid Visa offered by the payday-loan company Money Mart charges a $20 activation fee, plus a $7.50 monthly maintenance fee, a $2.50 fee to reload money onto the card, a 50-cent transaction fee at point-of-sale terminals and ATM fees, as well as fees to receive a statement and a $10 fee to cancel the card.

In another example, BMO Bank of Montreal charges an annual fee of $6.95 for its prepaid travel card, plus fees if the card is used for cash advances from ATMs, ranging from $1.50 from its own machines up to $4.50 per transaction if used outside North America. There is also a $5-per-month fee that is charged once the card is expired and not being used, until the balance is reduced to zero.

Those monthly fees are among practices that the federal Ministry of Finance is seeking to curb with regulation changes it has proposed, but are not yet in force.

Finance spokeswoman Stephanie Rubec said the government is still working on a final version of the regulations, which were posted to the Canada Gazette last October.