Prepaid cards are a convenient way to pay when you don’t want to use traditional credit or debit cards. Unlike a credit card, you can’t get into debt with a prepaid card. And unlike a debit card, you can’t incur overdraft charges or leave your entire bank account vulnerable to fraudulent charges or withdrawals — the money you load onto a prepaid card is all you can spend, period.
Prepaid cards get a bad reputation because of the fees some of them charge. The reality is that 1) prepaid cards charge fees because they’re not earning revenue from interest charges or overdraft fees and 2) you can minimize the fees you pay by choosing the right prepaid card. With that in mind, here are five prepaid cards to consider if you’re in the market.
Top 5 prepaid credit cards at a glance
Here’s a quick look at the best prepaid credit cards on the market currently and what they’re all about:
Netspend® All-Access ® Account
As convenient as prepaid cards are, often you give up earning interest on your purchases. With the Netspend® All-Access ® Account, you can earn 6% APY on the purchases you make each day. This means you’ll earn 6% APY on balances up to $2,000, which is $60 per year if you keep $1,000 in your account at all times. This is one of the many benefits you’ll get with this card.
Direct deposit available
You can enjoy the same direct deposit benefits you’d get with a debit card attached to a non-prepaid account. Just set up direct deposit and you’ll have quick access to your funds, getting you paid as soon as two days earlier than you would if you deposited it manually. If you have direct deposit, you’ll also get a $10 purchase cushion, letting you go up to $10 over, with the funds coming out of your next deposit.
Mobile check capture
When you do need to deposit a check, you can do so easily using your smartphone. The app connected to the Netspend® All-Access ® Account allows remote check deposit.
Fee-free cash withdrawals
Use your Netspend® All-Access ® Account at any MoneyPass ATM and enjoy fee-free withdrawals. You’ll typically find MoneyPass ATMS at 7-Elevens, credit unions and some community banks. To find a MoneyPass ATM near you, visit the MoneyPass ATM Locator.
Account overdraft grace periods
Spend a little more than you had in your account? No problem. You can sign up for Netspend® All-Access®’s optional overdraft service, giving you a 24-hour grace period for overdrafts.
Payback rewards
You can also sign up for cashback rewards on your purchases. Rewards will be matched to your individual shopping habits and credited to your account as you accrue them.
Brinks Prepaid Mastercard®
A recognized name in the financial industry, Brinks lets you get started with a debit card with no credit check or minimum balance required. Sign up for direct deposit and, if each check is worth $500 or more, you’ll get even more benefits, including:
- Reduction in fees from $9.95 to $5 per month
- Coverage of shortages of up to $10.
- Optional 5.00% APY savings account.
You’ll also get a few other benefits with the Brinks Prepaid Mastercard®.
Online banking access
Through the website or mobile app, you can access your account and check your balance, transfer funds, or locate the nearest reload station. You can also set up account alerts to your smartphone to stay aware of charges to your card.
Earn cashback rewards
Buy in qualifying categories and earn rewards through the PayBack Rewards program. Categories include participating restaurants, retailers, and services. Simply make the purchase at the participating merchant and Brinks will credit the cashback to your account.
Other benefits
With your Brinks Prepaid Mastercard®, you’ll get convenient extras, including:
- Virtual cards that hide your credit card number when making purchases online.
- Personalized cards let you design your card using a picture of your choice.
- Photo cards give your card an extra layer of security by including your picture on the card.
PayPal Prepaid MasterCard®
Unless you’ve been living under a rock for decades, you are well aware of the PayPal services and its tremendous reach, which is why it makes complete sense that so many people (roughly 203 million) make use of the PayPal Prepaid MasterCard. It’s well-known and trusted by consumers and retailers alike, has an enormous network, and this prepaid credit card has pretty low fees compared to others in the industry. PayPal’s prepaid MasterCard charges $4.95 per month for unlimited purchases. And look at all the freebies you get:
- Free direct deposit.
- Free money transfers from your PayPal account.
- No activation fee.
The card does charge you a $1.95 ATM fee (which is considerably lower than many of the other prepaid cards available), and you can also get cash back at select retailers and even restaurants. Set up direct deposit or transfer money from your PayPal account onto your prepaid card for fast access, or you can reload your card at any of the 130,000+ Netspend reload locations too.
The PayPal prepaid MasterCard charges a 2.5% foreign currency fee, which is lower than some of the cards on offer, but you can still get a better rate with no foreign transaction fee credit cards (if you get approved).
Best of all though, the PayPal prepaid MasterCard has lots of fun bonus offers it rolls out frequently. Some of the recent special offers included a refer a friend bonus that gives you and your buddy $5 cash when they sign up and load up their card or the 5% APR offer from The Bancorp Bank.
With so many convenient online retailers hooked up to the network, the PayPal Prepaid MasterCard is a great choice for online shopping.
Mileage Plus® GO Visa® Prepaid Card
The Mileage Plus® GO Visa® Prepaid Card is a slightly different card than the other prepaids we are featuring here. That’s because it has an amazing miles program that you won’t find in most other prepaid cards, making it a great option for people who travel or want to build up miles so they can travel for less. The Mileage Plus® GO Visa® Prepaid Card has two plans to choose from:
Monthly Plan for $5.95 Per Month
You’ll earn one mile for every $2 you spend on qualifying purchases.
Annual Plan for $85 Per Year
You’ll earn one mile for each dollar you spend on qualifying purchases.
Both plans offer you a way to earn big miles; the question is just how fast you want to earn. Like other prepaid cards, the Mileage Plus® GO Visa® Prepaid Card has an excellent mobile app for fast and easy account management, requires no credit check, and has free account management and inquiries. The Mileage Plus® GO Visa® Prepaid Card also offers the same 5% APY that the PayPal card offers, a huge benefit for those who like saving smartly.
Another benefit of this card is being able to take out money from an ATM for free. While this isn’t the case for every machine, the Mileage Plus® GO Visa® Prepaid Card has a big network of ATMs that won’t charge you a thing.
In addition to all the usual perks that a prepaid credit card offers you, throwing in a stupendous miles earning program makes the Mileage Plus® GO Visa® Prepaid Card one of the best options available to date.
Walmart MoneyCard® Visa® or MasterCard® with Cash-Back Rewards
Walmart offers two versions of their MoneyCard®—theWalmart MoneyCard® Visa® and theWalmart MoneyCard® MasterCard®. Both cards are nearly identical and are great for anyone who shops at Walmart frequently. When you use the Walmart MoneyCard Visa® or MasterCard®, you’ll earn 3% cash-back at Walmart.com, 2% cash back at Murphy USA and Walmart Fuel Stations, and 1% cash-back at Walmart, up to $75 in cash-back rewards per year.
No credit needed
Like the other cards on this, you don’t need to go through a credit check to be approved for the Walmart MoneyCard® Visa® or MasterCard® with Cash-Back Rewards.
There’s also no overdraft fees with this card, and no bank account required to sign-up.
Other features
- You can send money forfree to another participating card issued by Green Dot Bank, including Walmart MoneyCard.
- Get access to your money up to 2 days early with free Direct Deposit, depending on your payment provider’s process and timing.
Why would you want to use a prepaid card?
Prepaid credit cards let you put money onto them in different ways, and however much you put onto the card, that’s how much you can spend. So, if you put $100 on your prepaid credit card, you will be able to spend $100, no more. These cards are good for several reasons including:
Easy approval process even if you have poor credit
Like secured credit cards, prepaid credit cards are great if you don’t have the best credit history to show for yourself. Unlike secured cards though, prepaids don’t require any annoying collateral and the only limits on the account are the ones you set for yourself. So, if you can’t get approved for a standard bank account or credit card, you can still get a prepaid. They’re easy to get approved for because the best prepaid credit cards aren’t looking at your credit score and don’t require any credit check.
Help you stay within budget
Even if you have perfectly good credit and can get approved of for a great cash back credit card, a prepaid credit card is a helpful way to keep you on budget. These cards offer the same ease of a credit card (just swipe and go) without the fear of overspending.
Setting limits and teaching your kids how to spend responsibly
Plus, since you are the one to load money onto the card and you can only use however much money you have put on the card, this is a good option for young adults or teenagers who haven’t learned how to be responsible with money yet. It’s a good teaching tool to train them how to spend consciously. You can also look at some good credit cards for students if you want to compare benefits.
Not living in fee fear
With normal checking accounts, there are several fees you always have to be conscious of if you don’t want to get charged. With a prepaid card, you won’t ever have to worry about overdraft charges because you can only spend what’s on the card.
There are also no late fees or interest charges to consider, taking a big load off your shoulders. Interest payments can be a major cause of hefty and unnecessary credit card debt, so this is a big incentive for many people.
Traveling safely
Finally, prepaid credit cards are some of the best credit cards for travel. This is because they aren’t linked to your checking account, so if someone steals your card, you’ll only be out the money that was loaded onto the card and not your entire savings or checking account balance. (There’s also theft protection, but we’ll talk about that later.)
Those who are new to credit card spending should be aware that prepaid credit cards don’t help you rebuild or build new credit. So, if that’s your end game, you should consider a secured credit card or poor-credit credit card, instead. If you want to avoid interest, bank fees, and saving or check cashing fees, want to keep spending in check, or can’t get approved for other cards, this is the credit card type for you.
How can I avoid prepaid card fees?
You can avoid paying too much in prepaid card fees by:
Shopping around for the best prepaid credit cards on the market
Compare the different features available on a card alongside the fees being charged to see if it’s worthwhile for you. We’ve done the majority of the work for you and made a chart of the better cards available below.
Setting up direct deposit
Since many cards will forgive the monthly fee if you load a certain amount of money onto your prepaid credit card each month, it’s a good idea to set up a direct deposit that automatically goes onto your card. This way you’ll always have that money in the account for you to access and reach the monthly load limit with ease. This can be your paycheck, social services payments, etc.
Using free online services
Some prepaid credit cards will charge you for checking your balance over the phone, while others do not. You can avoid these charges altogether by using the free online resources that let you manage your account on the computer or mobile devices.
Avoiding ATM withdrawals
Many prepaid credit cards will charge you for ATM withdrawals. Plus, you’ll have to pay whatever service charge the ATM provider charges. This makes each transaction more expensive than other options. In general, purchases are the best way to spend money with your prepaid credit card.
Most important features of prepaid cards
So, what makes a prepaid credit card good? While air miles, cash back rewards, and APR offers are the usual factors to consider when thinking about credit cards, these are the most important features to look for in a prepaid credit card:
Easy to load card
You want a prepaid card that offers multiple locations around the country, as well as other convenient ways for you to load money onto your card (such as mobile payments, bank transfers, and online tools). If it’s a hassle to put money on, the card isn’t worth the plastic.
Acceptance network
Where and how you can use the prepaid card is just as important as putting money onto it. Cards like PayPal, for example, have a huge network of online retailers that accept its prepaid card.
Fees
This is an important equation for you to make. Look at all the fees that are being charged by the prepaid card including monthly fees, direct deposit charges, bill paying fees, ATM withdrawal fees, and more to see how much you will actually be charged at the end of each month. If the sum seems high, it might not be a good card for you. We looked for cards that had minimal fees.
No credit check/Ease of approval
The whole beauty of these prepaid cards is that it’s easy to get approved for. If a prepaid credit card gives you a hard time about approval or asks to do a credit pull, drop it fast. We only recommended cards that were a cinch to get approved for.
Of course, mobile access and extra perks also factored into our equation. For example, PayPal’s Bancorp 5% APY offer helped push this card to the top of the list.
Frequently asked questions
Here are some of the most widely asked questions we get when our readers ask about prepaid credit cards:
Do I need to have a good credit score in order to get a prepaid debit card?
No! That’s the best part of a prepaid credit card. You can get approved for the card even without any credit or poor credit. Since you aren’t borrowing any money off of the credit card issuer like you do with standard credit cards, issuers are more lenient about who they give these cards to. You won’t have your credit pulled with these cards, so credit history is irrelevant.
I’m currently in college, sophom*ore year, and I’m trying to build up my credit. I’m having a hard time getting approved for regular credit cards. I know prepaid cards offer easy approval, is this a good option for me?
Actually, no. If your end goal is to build your credit history so that you can get approved for a standard credit card or have a better credit score later on in life, then prepaid cards are not the right choice for you, and I’ll explain why.
In order to build credit history, your credit card issuer needs to report your activity to the major credit bureaus. These bureaus keep records of your payment history and build a file on you. Responsible spending and repayment builds healthy credit. Prepaid credit cards don’t report to the credit bureaus, so you aren’t building your credit when you use these cards. I’d recommend looking into one of these excellent student credit cards instead. Good luck!
These sound like credit card scams. Are prepaid debit cards safe?
Prepaid credit cards are perfectly safe as long as you go with a reliable issuer. With names like PayPal and Mileage, you don’t have to worry about scams. Plus, all of these cards are FDIC-insured, which means all of the money is insured so you won’t be left high and dry.
My cousin told me he got a prepaid debit card to pay for his streaming subscription because it’s safer and more private. How does a prepaid card help protect my privacy?
Prepaid credit cards are not linked to your bank account, so purchases made using the card aren’t linked to your name. For this reason, exactly, many people prefer to use a prepaid credit card to make purchases that they’d rather not have other people knowing about.
Should you get a prepaid credit card?
So, should you get a prepaid credit card? That depends on your situation. If you’re looking for great cash back rewards credit cards, enticing APR credit card offers, or impressive travel perk cards, then there are better cards to meet your criteria. Prepaid credit cards are great for you, though, if:
- You can’t open a free checking account or one with low fees
- You are tired of paying for unnecessary bank fees
- You’re a privacy hog, conspiracy theorist, or just someone who prefers not to link their online purchases to a bank account or credit card in their names
- You’re a parent who wants to help teach your kids responsible spending or give them a set allowance
It’s also a good option if you don’t have the best credit to get approval for a full-fledged credit card, and don’t want to deal with the hassle of a secured credit card. The beauty of a prepaid credit card is that your credit won’t be pulled and that you don’t need to offer any collateral in order to get approved for the card.
An alternative to prepaid credit cards
Secured credit cards allow those with poor credit and no credit the chance to rebuild their credit. After you get approved for the card, you’ll have to put down a deposit to secure a credit line. That deposit will be used if you fail to pay your bill.
Why you should consider a secured credit card
- Secured credit cards allow you to build credit (unlike prepaid cards). Prepaid credit cards are more like debit cards, but secured cards are reported to the credit unions, which can help your credit if you make on-time payments each month.
- They offer better rates.
- Some secured cards offer rewards. Some cards offer cashback.
- Charges on a secured credit card do not draw down your deposit balance. Prepaid cards you have to pay upfront. Secured cards act more like credit cards and you can pay off the balance at the end of each month.
