Prepaid Cards: The Checking Account Alternative
- 100% Guaranteed Approval
- No Overdraft Fees
- No Bounced Checks
- Multiple ways to deposit money Direct Deposit, 100,000+ Locations
(Walmart, Safeway, Western Union, etc...)
- Access to a MasterCard® or VISA® Card
We work hard to present you with the most accurate prepaid card information, however, this information does not originate from us and thus, we do not guarantee the accuracy of the information.
Before you apply for a prepaid debit card we recommend that you review and verify the card’s terms and conditions on the prepaid card company's web site. Please let us know if you find any differences related to the Prepaid Cards shown on this page.
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- How do prepaid cards work?
- Should I get a prepaid card?
- Tips for picking the right prepaid card
- What does the term prepaid credit card mean?
How do prepaid cards work?A prepaid card is essentially a debit card with two major exceptions: it does not require a bank account and it comes with guaranteed approval. The way it works is that you load money onto a pre-paid, re-loadable account, and spend it until that money runs out. You can easily add money to your prepaid account with cash and in person at thousands of locations, including major grocery stores, drugstores, and gas stations. Prepaid cards also give you the option to have your paychecks directly deposited into your account. This is a much cheaper way to cash your paychecks than going to check cashing stores. A prepaid card works the same as any MasterCard or VISA card. Not only is it useful for making purchases and withdrawing cash, but it also gives you the option to pay your bills online, as opposed to mailing in a check.
Should I get a prepaid card?A prepaid card is a good option if you need an account that allows you to deposit money, pay bills, make purchases with plastic, and withdraw cash at ATMs. As a result, having access to a prepaid card allows you to buy things online and, depending on the policy of the particular company, even rent a car or book a hotel room. If you're wondering whether or not a prepaid card is right for you, it will help to know that prepaid cards have three primary applications: 1) As replacement checking accounts; 2) As financial literacy teaching tools; and 3) As check cashing alternatives. Below you will find an explanation of how prepaid cards serve these purposes and what you should look for when trying to find the right prepaid card for each:
- Replacement Checking Account: Pretty much everything you can do with a checking account/debit card can also be done with a prepaid card; you just won’t have an actual checkbook. If you plan on using your prepaid card as a replacement checking account, either because the cost of your traditional checking account has risen or you cannot get approved for a traditional checking account, you obviously want one that offers free direct deposit, ATM withdrawals, and online bill pay. In addition, if you are utilizing direct deposit, it's fair to expect not to be charged any monthly fees.
- Financial Literacy Teaching Tool: Loading your child's allowance onto a prepaid card is a good way to get them started on the road to financial responsibility. Prepaid cards offer online account management, which allows you to review your child’s spending habits with them. You can also give them enough money to last a couple of weeks in order to instill the importance of budgeting. Just getting used to making transactions with plastic will be a benefit as well.If you plan on using your prepaid card as a financial literacy teaching tool, you’ll want a card that has a low monthly fee and no fees for in-network ATM withdrawals or making purchases. In addition, you should avoid cards with inactivity fees or fees for customer service because you don’t want to get your child in the habit of having to make purchases or prevent them from asking questions.
- Check Cashing Tool: Many people cannot utilize direct deposit, but need to cash paychecks nonetheless. Check cashing stores tend to be expensive, so if you can find a prepaid card that allows you to load checks and withdraw cash for free, that would save you a lot of money in the long run. If you plan on using your prepaid card in this manner, you’ll most likely need a card offered by a large national bank with nearby branches, like the Chase Liquid Card.
Tips for picking the right prepaid card
- Compare All Available Options: Much like choosing the best credit card for your needs necessitates comparing offers across issuers and product segments, the odds of finding the right prepaid card decline the more you refine your search. So, start by leaving preconceived notions at the door, compare multiple prepaid card offers, and consider whether or not other types of financial products can fulfill your particular needs at a lower cost.
- Evaluate Costs Based on Actual Needs & Spending Habits: People have a tendency to become overly focused on major fixed costs like annual and monthly service charges. Such costs are certainly important, but you also mustn’t forget that prepaid cards are known for charging many different small fees that can add up over time. As a result, it’s important to determine exactly how you plan to use your prepaid card (i.e. how you’ll load funds, the number of ATM withdrawals you’ll make, etc.) and then evaluate the cost of each offer in terms of that usage. After all, there is a wide disparity between the best offers on the market (which can be essentially free to use) and those that can end up costing you a few hundred dollars each year.
- Don’t Forget About Online Bill Pay, Loading Options, or ATM Access: While cost is undoubtedly important, even a free prepaid card will be effectively useless if it doesn’t offer all of the features you need. As many as 31% of prepaid cards are unsuitable to consumer needs due to a lack of key features.
- Read the Fine Print: This advice applies to any financial product you’d apply for, but it’s especially important to verify that there aren’t any hidden fees or caveats associated with a given prepaid card because their newfound popularity means they aren’t regulated quite as well as other, more established types of products.
- Use the Island Approach: While the Island Approach is more commonly associated with credit card use, the idea of using different financial accounts to meet different financial needs can apply to prepaid cards as well. For example, some folks may want to get one prepaid card to use as an alternative checking account and another to monitor a child’s spending.