You can use a prepaid debit card just as you would any other debit card. The only difference is that you preload it with cash instead of it being connected to your checking account.
The benefits of a prepaid debit card may appeal to both those with and without bank accounts. Prepaid cards help keep you on a budget because you can’t make larger purchases than your current balance.
You won’t need to carry cash around and can also shop or pay bills online even if you don’t have a bank account. However, some prepaid debit cards have different restrictions and fees, so it’s wise to explore your options before choosing one.
The 8 Best Prepaid Debit Cards
FamZoo offers prepaid debit cards and a financial education for kids and teens. It allows parents to set up a virtual family bank for their kids designed to teach them how to earn, save, spend, and give money wisely.
Best Alternative to a Prepaid Debit Card
How We Chose the Best Prepaid Debit Cards
After reviewing over 40 of the most widely used prepaid debit cards from banks, credit unions, and other financial organizations, we have compiled a list of the top options based on multiple considerations, including fees, user-friendliness, and reloading convenience.
In addition to this, we thoroughly evaluated all the unique features and benefits each prepaid card offers. The selected prepaid cards on our list boast an optimal blend of these essential factors.
Frequently Asked Questions
What is the best prepaid debit card?
Finding the best prepaid debit card depends on your needs. If you’re looking for a prepaid card that replaces a bank account, try NetSpend. Bluebird by American Express is the best prepaid debit card for international use as the foreign transaction fee is $0. However, if you’re looking for a prepaid debit card for a child or teenager, go with FamZoo.
As you can see, the best prepaid card truly depends on what you want to use it for.
What is the best prepaid card with no fees?
No prepaid card is 100% free. However, Bluebird by American Express card is the closest you’ll get. This card can be reloaded for free through various methods, such as a cash or debit card transfer at Walmart stores, mobile check deposit, and direct deposit.
There’s no activation fee or card fee when purchased online, and no monthly or pay-as-you-go fees either. Using the card at a MoneyPass ATM, transferring money to other linked Bluebird accounts, or SetAside Accounts also incurs no fees.
What are prepaid debit cards used for?
You can use a prepaid debit card online or at retail shops just as you would with a traditional debit card linked to a checking or savings account. Major brands like Visa or MasterCard issue prepaid cards so you can use the card anywhere credit cards are accepted.
This includes physical retailers as well as online stores. Prepaid debit cards are highly accessible if you don’t qualify for a bank account or have problems shopping online without a debit or credit card. Prepaid debit card issuers don’t check your banking history when you apply.
What is the difference between a debit card and a prepaid debit card?
The most significant difference is that you don’t need a bank account for a prepaid debit card. Debit cards typically require a checking or savings account with a financial institution like a bank or credit union. Many people, however, can’t qualify for a checking account. If that’s the case, you can purchase a prepaid card that you can use in almost the same manner.
Instead of depositing funds into your bank account, you load funds directly onto the prepaid card. The exact process depends on the card you choose. Often, you can set up direct deposit, add funds online or through your phone, or add cash in person at a participating retailer.
Another difference is that while checking accounts and debit cards from your bank are FDIC-insured, most prepaid cards are not. So if the company goes out of business while you have funds on your card, you may not see that money.
Who should use prepaid debit cards?
A prepaid debit card may not be the ideal choice for you based on your credit history and financial standing. Prepaid cards often come with higher fees and more limitations compared to conventional debit cards. They also won’t help you build credit as they’re not a credit line.
However, prepaid debit cards can serve as a practical solution for those with a history of exceeding their checking account balance and for those looking to dodge overdraft fees.
Prepaid cards can also provide a useful tool for parents who want to control their children’s spending by allowing purchases within a set limit.
Many unbanked and underbanked consumers also rely on prepaid cards for financial management.
Do prepaid debit cards come with fees?
Yes, prepaid cards generally have higher fees than debit cards linked to your checking account. The following are some of the most common fees to be aware of:
- Monthly fees: A fee charged every month, regardless of usage.
- Transaction fees: A fee for each transaction completed using the card.
- Inactivity fees: Some prepaid cards, like the H&R Block Emerald Card, charge an inactivity fee. This is a fee you pay for not using the card for an extended period of time.
- Cancellation fees: Some providers charge a fee if you cancel your card prior to expiration
- Reloading fees: A fee for reloading the card at a physical location, which can be avoided by enrolling in direct deposit.
How do you put money onto a prepaid card?
There are multiple options for reloading a prepaid card, some of which have no fees associated with them. Here are the most common ways to put money onto a prepaid card:
- Retail locations: You can add money to your prepaid card using cash, checks, or money orders. Some cards have partnerships with specific merchants for no-fee reloading, such as Walmart with the Bluebird American Express Prepaid Debit Account.
- Reload packs: You can buy a reload pack with cash and transfer the money to your card online using a unique identifying number.
- MoneyGram or Western Union: You can transfer funds to your prepaid card by entering the information at a MoneyGram kiosk or agent location, or swiping your card at an agent location with Western Union Reload+.
- Debit card transfers: If you have a checking account, you can do a debit card transfer online or retail locations.
- Electronic funds transfer: You can link your checking account to your prepaid card and transfer funds between the two.
- Direct deposit: You can have your paycheck or government benefits directly deposited into your prepaid card account.
- Mobile check capture: Some prepaid cards have mobile apps, such as Ingo Money, which allow you to deposit a scanned check to the card.
- Bank teller: If you have a prepaid card issued by a bank, you can reload it with cash or a check by visiting a bank teller.
Before choosing a prepaid card, be sure to check the available reload methods and the fees for each method.
Can you use a prepaid debit card at an ATM?
The best prepaid debit cards have access to free nationwide ATM networks or branded bank networks for cards issued by banks. Make sure to check your prepaid card for participating ATMs.
There are two things to remember when making ATM withdrawals. First, check on the ATM fees from both your card issuer and the ATM you’re visiting. Additionally, check your prepaid card agreement to see if there is a daily withdrawal limit.
Can I transfer money from a prepaid card to my bank account?
In most cases, you can’t transfer money from your prepaid card to your bank account. You would need to first cash out the funds and then make a separate deposit into your account. However, prepaid card companies vary, so check their user agreements to see if they offer this service.
Do prepaid cards require a social security number?
No, this is one of the benefits of using a prepaid debit card. No credit scores, banking history, or residency status is required, as long as you have the funds to load onto the card. Prepaid cards provide a convenient alternative to cash for a wide range of individuals.
Chime is a financial technology company, not a bank. Banking services and debit card provided by The Bancorp Bank N.A. or Stride Bank, N.A.; Members FDIC. Credit Builder card issued by Stride Bank, N.A.
1. Out-of-network ATM withdrawal fees may apply with Chime except at MoneyPass ATMs in a 7-Eleven, or any Allpoint or Visa Plus Alliance ATM.