Eric Bank is an M.B.A. who has covered financial and business topics since 1985, appearing regularly on Credible, eHow, WiseBread, The Nest, Zacks, Chron, BadCredit.org and dozens of other outlets. Eric specializes in taking complex subject matters and explaining them in simple terms for consumer audiences, particularly in the world of personal finance. Eric holds a Master's in Business Administration from New York University and a Master's in Finance from DePaul University.
Jon leverages 15-plus years of journalism expertise to inform financial consumers about emerging trends and companies making an impact in the industry. He is most knowledgeable in the areas of budgeting, credit card rewards, and responsible credit use. Jon has a passion for writing and editing, and his articles have appeared in publications produced by The New York Times.
Ashley Fricker has more than a decade of experience as a finance contributor and editor, and has specialized in the credit card industry since 2015. Her credit card commentary is featured on national media outlets that include CNBC, MarketWatch, Investopedia, and Reader's Digest, among many others. She has worked closely with the world’s largest banks and financial institutions, up-and-coming fintech companies, and press and news outlets to curate comprehensive content and media. Ashley holds a bachelor's degree in multimedia journalism from Florida Atlantic University.
Below are our staff picks for the year's best prepaid and debit cards. Unlike traditional credit cards, these cards require that cardholders load funds onto the card before using.
Disclosure: When you apply through links on our site, we often earn referral fees from partners. For more information, see our ad disclosure and review policy.
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Our in-house experts rate Prepaid Debit Cards based on:
Monthly and other fees
Deposit amounts
Rewards offered
Ease of approval
Account features such as mobile deposits and overdraft protection
We also consider other cardholder needs and data points specific to the category. We then compare it to similar card offers and evaluate the terms before assigning a numerical value, in which 5.0 represents the best. Ratings are updated as issuer changes occur, and issuers have no influence on our ratings.
Our in-house experts rate Prepaid Debit Cards based on:
Monthly and other fees
Deposit amounts
Rewards offered
Ease of approval
Account features such as mobile deposits and overdraft protection
We also consider other cardholder needs and data points specific to the category. We then compare it to similar card offers and evaluate the terms before assigning a numerical value, in which 5.0 represents the best. Ratings are updated as issuer changes occur, and issuers have no influence on our ratings.
Cashback – Earn 1% cash back on up to $3,000 in debit card purchases
each month
No. Fees. Period. That means you won’t be charged an account fee on our
Cashback Debit account.
Early Pay – Get your paycheck up to two days early with no charge
No Credit Impact - You can apply without affecting your credit score.
Fraud Protection - You’re never responsible for unauthorized debit card
purchases. If you suspect someone else has used your debit card without
your permission, let us know.
Member FDIC
Fee-free overdraft protection
No minimum opening deposit and no minimum balance
Add cash into your account at Walmart stores nationwide
Our in-house experts rate Prepaid Debit Cards based on:
Monthly and other fees
Deposit amounts
Rewards offered
Ease of approval
Account features such as mobile deposits and overdraft protection
We also consider other cardholder needs and data points specific to the category. We then compare it to similar card offers and evaluate the terms before assigning a numerical value, in which 5.0 represents the best. Ratings are updated as issuer changes occur, and issuers have no influence on our ratings.
Our in-house experts rate Prepaid Debit Cards based on:
Monthly and other fees
Deposit amounts
Rewards offered
Ease of approval
Account features such as mobile deposits and overdraft protection
We also consider other cardholder needs and data points specific to the category. We then compare it to similar card offers and evaluate the terms before assigning a numerical value, in which 5.0 represents the best. Ratings are updated as issuer changes occur, and issuers have no influence on our ratings.
Our in-house experts rate Prepaid Debit Cards based on:
Monthly and other fees
Deposit amounts
Rewards offered
Ease of approval
Account features such as mobile deposits and overdraft protection
We also consider other cardholder needs and data points specific to the category. We then compare it to similar card offers and evaluate the terms before assigning a numerical value, in which 5.0 represents the best. Ratings are updated as issuer changes occur, and issuers have no influence on our ratings.
Our in-house experts rate Prepaid Debit Cards based on:
Monthly and other fees
Deposit amounts
Rewards offered
Ease of approval
Account features such as mobile deposits and overdraft protection
We also consider other cardholder needs and data points specific to the category. We then compare it to similar card offers and evaluate the terms before assigning a numerical value, in which 5.0 represents the best. Ratings are updated as issuer changes occur, and issuers have no influence on our ratings.
Your Chime Checking Account comes with a Chime Visa® Debit Card, and no monthly fees or maintenance fees.
Avoid out-of-network ATM fees and access to 50,000+ fee-free ATMs¹ — more than the top 3 national banks combined!
Direct deposits arrive up to 2 days early.²
Disclosures: 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.
¹Out-of-network ATM withdrawal and over the counter advance fees may apply except at MoneyPass ATMs in a 7-Eleven, or any Allpoint or Visa Plus Alliance ATM. Bank ranking and number of ATMs according to U.S. News & World Report® 2023.
²Early access to direct deposit funds depends on the timing of the submission of the payment file from the payer. We generally make these funds available on the day the payment file is received, which may be up to 2 days earlier than the scheduled payment date.
Our in-house experts rate Prepaid Debit Cards based on:
Monthly and other fees
Deposit amounts
Rewards offered
Ease of approval
Account features such as mobile deposits and overdraft protection
We also consider other cardholder needs and data points specific to the category. We then compare it to similar card offers and evaluate the terms before assigning a numerical value, in which 5.0 represents the best. Ratings are updated as issuer changes occur, and issuers have no influence on our ratings.
Our in-house experts rate Prepaid Debit Cards based on:
Monthly and other fees
Deposit amounts
Rewards offered
Ease of approval
Account features such as mobile deposits and overdraft protection
We also consider other cardholder needs and data points specific to the category. We then compare it to similar card offers and evaluate the terms before assigning a numerical value, in which 5.0 represents the best. Ratings are updated as issuer changes occur, and issuers have no influence on our ratings.
Our in-house experts rate Prepaid Debit Cards based on:
Monthly and other fees
Deposit amounts
Rewards offered
Ease of approval
Account features such as mobile deposits and overdraft protection
We also consider other cardholder needs and data points specific to the category. We then compare it to similar card offers and evaluate the terms before assigning a numerical value, in which 5.0 represents the best. Ratings are updated as issuer changes occur, and issuers have no influence on our ratings.
Our in-house experts rate Prepaid Debit Cards based on:
Monthly and other fees
Deposit amounts
Rewards offered
Ease of approval
Account features such as mobile deposits and overdraft protection
We also consider other cardholder needs and data points specific to the category. We then compare it to similar card offers and evaluate the terms before assigning a numerical value, in which 5.0 represents the best. Ratings are updated as issuer changes occur, and issuers have no influence on our ratings.
Our in-house experts rate Prepaid Debit Cards based on:
Monthly and other fees
Deposit amounts
Rewards offered
Ease of approval
Account features such as mobile deposits and overdraft protection
We also consider other cardholder needs and data points specific to the category. We then compare it to similar card offers and evaluate the terms before assigning a numerical value, in which 5.0 represents the best. Ratings are updated as issuer changes occur, and issuers have no influence on our ratings.
Our in-house experts rate Prepaid Debit Cards based on:
Monthly and other fees
Deposit amounts
Rewards offered
Ease of approval
Account features such as mobile deposits and overdraft protection
We also consider other cardholder needs and data points specific to the category. We then compare it to similar card offers and evaluate the terms before assigning a numerical value, in which 5.0 represents the best. Ratings are updated as issuer changes occur, and issuers have no influence on our ratings.
Our in-house experts rate Prepaid Debit Cards based on:
Monthly and other fees
Deposit amounts
Rewards offered
Ease of approval
Account features such as mobile deposits and overdraft protection
We also consider other cardholder needs and data points specific to the category. We then compare it to similar card offers and evaluate the terms before assigning a numerical value, in which 5.0 represents the best. Ratings are updated as issuer changes occur, and issuers have no influence on our ratings.
Our in-house experts rate Prepaid Debit Cards based on:
Monthly and other fees
Deposit amounts
Rewards offered
Ease of approval
Account features such as mobile deposits and overdraft protection
We also consider other cardholder needs and data points specific to the category. We then compare it to similar card offers and evaluate the terms before assigning a numerical value, in which 5.0 represents the best. Ratings are updated as issuer changes occur, and issuers have no influence on our ratings.
CardRates.com is a free online resource that offers valuable content and comparison services to users. To keep this resource 100% free, we receive compensation for referrals for many of the offers listed on the site. Along with key review factors, this compensation may impact how and where products appear across CardRates.com (including, for example, the order in which they appear). CardRates.com does not include the entire universe of available offers. Editorial opinions expressed on the site are strictly our own and are not provided, endorsed, or approved by advertisers.
Review Breakdown: Prepaid & Debit Cards
Prepaid debit credit cards, especially those with no monthly fees and direct deposit, represent a popular way for consumers to enjoy the convenience of a credit card without the debt and interest payments. Below is a summary of the best reloadable debit cards on the market. Simply click the card name to visit its official application.
Our in-house experts rate Prepaid Debit Cards based on:
Monthly and other fees
Deposit amounts
Rewards offered
Ease of approval
Account features such as mobile deposits and overdraft protection
We also consider other cardholder needs and data points specific to the category. We then compare it to similar card offers and evaluate the terms before assigning a numerical value, in which 5.0 represents the best. Ratings are updated as issuer changes occur, and issuers have no influence on our ratings.
Our in-house experts rate Prepaid Debit Cards based on:
Monthly and other fees
Deposit amounts
Rewards offered
Ease of approval
Account features such as mobile deposits and overdraft protection
We also consider other cardholder needs and data points specific to the category. We then compare it to similar card offers and evaluate the terms before assigning a numerical value, in which 5.0 represents the best. Ratings are updated as issuer changes occur, and issuers have no influence on our ratings.
Our in-house experts rate Prepaid Debit Cards based on:
Monthly and other fees
Deposit amounts
Rewards offered
Ease of approval
Account features such as mobile deposits and overdraft protection
We also consider other cardholder needs and data points specific to the category. We then compare it to similar card offers and evaluate the terms before assigning a numerical value, in which 5.0 represents the best. Ratings are updated as issuer changes occur, and issuers have no influence on our ratings.
Our in-house experts rate Prepaid Debit Cards based on:
Monthly and other fees
Deposit amounts
Rewards offered
Ease of approval
Account features such as mobile deposits and overdraft protection
We also consider other cardholder needs and data points specific to the category. We then compare it to similar card offers and evaluate the terms before assigning a numerical value, in which 5.0 represents the best. Ratings are updated as issuer changes occur, and issuers have no influence on our ratings.
Our in-house experts rate Prepaid Debit Cards based on:
Monthly and other fees
Deposit amounts
Rewards offered
Ease of approval
Account features such as mobile deposits and overdraft protection
We also consider other cardholder needs and data points specific to the category. We then compare it to similar card offers and evaluate the terms before assigning a numerical value, in which 5.0 represents the best. Ratings are updated as issuer changes occur, and issuers have no influence on our ratings.
Our in-house experts rate Prepaid Debit Cards based on:
Monthly and other fees
Deposit amounts
Rewards offered
Ease of approval
Account features such as mobile deposits and overdraft protection
We also consider other cardholder needs and data points specific to the category. We then compare it to similar card offers and evaluate the terms before assigning a numerical value, in which 5.0 represents the best. Ratings are updated as issuer changes occur, and issuers have no influence on our ratings.
Our in-house experts rate Prepaid Debit Cards based on:
Monthly and other fees
Deposit amounts
Rewards offered
Ease of approval
Account features such as mobile deposits and overdraft protection
We also consider other cardholder needs and data points specific to the category. We then compare it to similar card offers and evaluate the terms before assigning a numerical value, in which 5.0 represents the best. Ratings are updated as issuer changes occur, and issuers have no influence on our ratings.
Prepaid cards act as a cash substitute wherever credit or debit cards are accepted. Prepaid cards are not credit products and do not offer cardholders the option to finance purchases over time. Nevertheless, prepaid debit cards provide convenience for consumers who can’t or prefer not to use credit cards. If you are prepaid-curious, read on to have your questions about prepaid credit cards answered.
1. What Is a Prepaid Card?
A prepaid card, which is more akin to a debit card, is a piece of plastic that externally resembles a credit or regular debit card. But behind the scenes, prepaid cards tap the cash you deposit into the card account rather than your credit line or checking account. Just as with a prepaid card you receive as a gift, someone has to load funds onto the card before it can be used, unlike a traditional credit card where the bank lends you money to spend that must then be repaid over time.
Prepaid cards carry the logo of the same Visa card, Mastercard, and American Express networks that process credit and debit card transactions and are accepted at the same places. You can obtain prepaid cards whatever your credit history (or lack thereof), which means they are a way for consumers with low or no credit scores to shop with plastic at retail and online venues. Prepaid business cards also exist and provide a safe way for businesses to manage their financial transactions. They’re “better than checks and safer than cash,” according to Mastercard.
Plus, they provide fraud liability protection which means account holders aren’t liable for any unauthorized transaction made with their account. Prepaid business credit cards provide real-time purchase alerts and other valuable features for business owners.
2. How Does a Prepaid Card Work?
Prepaid cards are simpler than credit and debit cards in most respects. That makes them relatively easy to use. The card is attached to an account you open when you first buy the card. You can reload funds to your account at any time, although there may be limits on the minimum and maximum deposits. To use the card at a retail location, you present it as you would a regular credit or debit card.
This usually means inserting the card into a terminal to read the card’s chip or swiping it to scan the magnetic stripe. The terminal will ask you, somewhat misleadingly, to choose either a debit or credit transaction. You enter your PIN for a debit transaction (this is called a PIN transaction) or sign your name for a so-called credit transaction.
A PIN transaction is usually costlier than a signature transaction. Either way, the purchase amount is subtracted from your card balance. If your balance is insufficient, your card will be rejected. Otherwise, press the approval button on the terminal to complete the transaction. For example, suppose your reloadable prepaid card balance is $100. If you use your card to make a $25 purchase, your new card balance will be $75.
However, if you try to make a $200 purchase, your transaction will be rejected. Some cards offer an optional overdraft protection feature that allows you to tap another account or small credit line to prevent an overdraft, but fees usually apply.
Online shopping with a prepaid card requires you to enter your card number, just as you would for a debit or traditional credit card transaction. The card should have a security code to make it compatible with regular credit cards.
3. How Do I Get a Prepaid Card?
First, consult our prepaid card reviews above to select the right card for you. Once you make your selection, visit the issuer’s website to check your purchase options, either at retail locations (like pharmacies and grocery stores), over the phone, online, and from some banks and credit unions. You’ll be required to load an initial amount when you buy the card, which may be subject to minimums.
You may have to pay a new card fee and/or an initial activation fee for the card. Some issuers waive these fees under certain circumstances, such as purchasing the card online. If you do buy the card online, you may be immediately issued a virtual card that you can use for card-not-present transactions (e.g., purchases made online, through a smartphone app, or over the phone) until you receive your physical card.
Some cards require you to register your new card by providing personal information such as:
Full name
Date of birth
Social Security number
Residential address
Phone number
Email address
Registration is important because certain features, such as online use or reloading money, may be restricted until registration is complete. Also, if you don’t register cards that require it, you won’t be protected against the card’s loss or theft.
You also may need to register to become eligible for deposit insurance on cards that offer it. You can activate your card in the issuer’s online account center or by calling the number on the card when you receive it.
4. Are Prepaid Cards Free?
The issuers of prepaid cards don’t make a dime on interest because a cardholder can’t charge purchases on credit. Therefore, issuers must find other ways to make money on these cards, which they do by charging fees.
Netpsend fees, current as of March 2024.
The first fee you’ll encounter is for activating the physical card. Issuers can charge a flat monthly fee or collect pay-as-you-go fees on every transaction. In fact, many issuers give you the choice of fee payment methods. For consumers who choose to pay monthly, some cards will reduce fees when the cardholder’s deposits exceed a specified amount.
Prepaid cards cannot charge a late fee because they do not extend credit nor let you spend beyond your cash balance. Other fees may also apply, such as an inactivity fee. Some cards waive the reload fee if you load your card through a direct deposit of paychecks or government benefits. Fees are usually subtracted directly from your account balance.
A few prepaid cards pay you interest on your cash balance, much like a savings account. You won’t get rich on these interest payments, but they’re better than nothing. The closest approximation to a totally free reloadable prepaid card is the Bluebird by American Express®. It charges fees to get a new card at a retail location, to add funds at certain locations, to use out-of-network ATMs, and to pick up cash via Ria.
Everything else is free, including ordering a card online. There are no monthly or annual fees, activation fees, or fees for withdrawing funds, spending money, sending money, or obtaining account information. Some prepaid cards offer cash backrewards.
Prepaid cards are definitely not one-size-fits-all, so the best prepaid card to get depends on what’s important to you. Most folks prefer a card with minimal fees, but other considerations include:
Flexibility: Cards may offer multiple options for monthly or pay-as-you-go usage fees. We like the NetSpend® Visa® Prepaid Card for its flexible usage fees. This Visa prepaid card can be used everywhere Visa is accepted.
Budgeting: Some cards offer online banking tools to help you manage your money. The tools that accompany the Bluebird® American Express® Prepaid Debit Account let you categorize transactions, set spending limits, and track up to four cards, both online and through the phone app.
Cash back rewards: A few prepaid debit cards pay cash rewards, but the top one is the Discover® Cashback Debit. This card gives you 1% cash back on all purchases on up to $3,000 spent per month. The Walmart MoneyCard® also provides cash back rewards for purchases made at Walmart stores, and the Serve® American Express® Prepaid Debit Account pays 1% back on all purchases up to the set limit.
Savings: If you want to earn interest on your deposited balance, then check out The Mango Prepaid Mastercard®. You can earn 6% interest when you meet certain requirements.
Direct deposit: We think the PayPal Prepaid Mastercard® is your best bet if you arrange for direct deposit of your paychecks and/or government benefits. Using the card can shave two days off the time it takes to receive your money. You can transfer funds between the card and your PayPal account, but you do need a PayPal account.
These are not the only criteria that may be important to you. For example, if you travel abroad, you may want a prepaid card with no foreign transaction fee or fee for foreign currency translation. Alternatively, you may be subject to an ATM transaction fee if you use these machines extensively.
6. What Is the Best Prepaid Card With No Fees?
We’ve established that no prepaid card is 100% no-fee. But the one that comes closest to this ideal is the Bluebird® by American Express prepaid card. You can reload this card for free from several sources, including cash or a debit card transfer at a Walmart store, as well as mobile check deposit and direct deposit. Moreover, the card doesn’t charge an activation fee or a card fee when you buy the card online.
Each cash withdrawal from retail locations other than Walmart.
Money in Minutes check capture by Ingo Money®. Money in 10 Days check capture is free.
Out-of-network ATM fee
Ria® cash pickup.
One other cost savings shared by most prepaid cards is that you don’t need (and don’t have to pay for) a checking account. In fact, many unbanked and underbanked consumers rely on prepaid cards.
7. Do Prepaid Debit Cards Hurt Your Credit?
Prepaid cards cannot hurt your credit because they fly under the radar of the major credit bureaus (Experian, TransUnion, and Equifax). These credit bureaus track consumer credit and loan activity, which rules out a prepaid, debit, or gift card. Prepaid debit cards function essentially like debit cards. Users can make purchases, pay bills, and withdraw cash up to the card’s balance.
Unlike credit cards, prepaid debit cards do not extend a line of credit and do not involve borrowing money. This also means there’s no credit check required to obtain one, and issuers do not report to the three major credit bureaus. As a result, they neither help nor hurt your credit score directly.
By the way, a gift card is similar to a prepaid card, except they usually are not reloadable. Of course, there are exceptions to this rule — a gift card with a payment network logo on it is usually reloadable, such as the Vanilla Visa Gift Card. You can usually add money to Mastercard, Amex, or Visa gift cards.
8. Can I Build Credit With a Prepaid Card?
Just as prepaid cards can’t hurt your credit, neither will they help you build it. Credit refers to debt, which is money you owe to creditors and lenders. A prepaid card incurs no debt, so when it comes to your credit score, prepaid cards are as neutral as Switzerland.
A card issuer must report your account activity to at least one credit bureau for it to help build your credit history, which prepaid card issuers do not do. However, if you are willing to concede that building credit is a long-term endeavor, you may consider prepaid card usage as the first step on the journey. How? By giving you the opportunity to develop good money-management habits:
Prepaid cards are safer than cash. It’s not just that money in a lost wallet is gone forever. Many prepaid cards are insured and give you the opportunity to recover your money if the card is lost or stolen. Additionally, regulations instituted in 2019 expanded the protections available to holders of prepaid cards.
Cash spending is hard to track. When you pay for everything with cash, it’s almost impossible to budget effectively. To track your spending, you’d have to keep all your receipts every day and then transcribe them to a spreadsheet or budget software. By contrast, prepaid cards can provide you with online or printed statements that make tracking easier. Some card issuers offer apps to automatically classify and track prepaid card usage. Budgeting and budget tracking are the foundation of financial responsibility, a core activity that will help you learn to control your spending habits.
Prepaid cards require you to monitor your balance. You can’t just load your card and forget it, lest you find your card declined at your favorite restaurant or grocery store. Staying on top of your card balances is another core activity for financial responsibility.
Prepaid cards facilitate online shopping. It’s hard to take advantage of low online prices if you don’t have a plastic card. A prepaid card enables you to make card-not-present purchases which may result in significant savings from month to month.
Prepaid cards teach you to live without debt. Credit cards make it easy to generate debt that requires you to cough up interest charges when you carry balances. Prepaid cards are like training wheels — the money management skills they help you develop can condition you to use credit cards without carrying balances. If and when you graduate to credit cards, paying your full balance each month means a 0% APR and no money spent on interest. That’s terrible for the credit card companies but great for you.
For whatever reason, schools today just don’t teach personal finance. It’s up to you to develop good financial habits, and using prepaid cards can be a helpful step in that direction. If you want a card that’s easy to get approved for that can help you build credit, consider a secured credit card.
These cards require a deposit for approval, similar to prepaid debit cards, and will report your account to the credit bureaus. This means the account will appear on your credit report with each bureau. And paying your bill on time and keeping your balance low will help you build credit over several months.
9. How Do You Put Money onto a Prepaid Card?
When it comes to reloading your prepaid card, you’ve got options, many of which are no-fee. The ways to put money onto your prepaid card include:
Cash, checks, or money orders at retail locations: Some cards have relationships with specific merchants that provide no-fee reloading. For example, the Bluebird® American Express® Prepaid Debit Account allows you to add money to your card at any Walmart checkout register without fees. Other participating retailers may charge a fee.
Reload packs: You can buy a reload pack for cash. Each reload pack has a unique identifying number. You then go online to transfer the money from the reload pack to your prepaid card.
MoneyGram/Western Union: You can enter transfer information at a MoneyGram kiosk or agent location. You don’t need the physical card with you to do the transfer. If you use Western Union Reload+, you can reload your prepaid card by swiping it at an agent location.
Debit card transfers: Prepaid cards do not require you to have a checking account. But if you do, you can use your regular debit card to transfer money to your prepaid cards online or at retail locations.
Electronic funds transfer: If you have a checking account, you may be able to link it to a prepaid card and electronically transfer money between the two accounts.
Direct deposit: You make a direct deposit of your paycheck and government benefits into your prepaid card account.
Mobile check capture: Some prepaid cards work with mobile apps, such as Ingo® Money, that allow you to scan a check and deposit it to the card.
Bank teller: A few banks issue prepaid cards. With one of these, you can walk up to the bank teller and cash reload your card, including with a check. You can also do a bank transfer transaction.
Before deciding on a prepaid card, check the different ways it accepts reloads and the fees for each method. Also be aware that the card issuer sets the daily and overall reload limits on its prepaid cards. Those limits may range from $500 to $10,000 or more for cash deposits.
10. Are Prepaid Cards Safe?
The Consumer Financial Protection Bureau introduced prepaid card protections in 2019. The safeguards include:
If you are the victim of unauthorized or fraudulent charges, your liability is limited to $50 when you report the problem within two days of discovery.
You can no longer be charged for seeking information about your card account.
If you opt for overdraft protection, the fees are capped for the first year at 25% of the credit limit. However, there is no cap after the first year.
These are good protections, but some dangers still lurk in the form of fee abuse by predatory card issuers. We recommend you decline optional overdraft protection, as it can accumulate a high overdraft fee total. Also, stay with cards that provide FDIC coverage.
11. Is there a Difference Between a Prepaid Debit Card and a Prepaid Credit Card?
No difference! Both terms refer to prepaid cards, but both are confusing. A prepaid credit card implies that the card has a credit line, but prepaid cards do not (unless you opt for overdraft protection, which we discourage). A prepaid debit card is better, but it implies that it is backed by a checking account, which it isn’t. It’s also important to understand that a secured credit card is different from a prepaid one.
A secured card requires a refundable deposit, but it extends credit to you up to the deposit amount. A prepaid card also requires a deposit, but it doesn’t secure a credit line. Rather, that’s the money you spend when you use the card. Another difference is that a secured card can help you build credit, whereas a prepaid card cannot. Why do these terms pop up at all? Some of it is marketing, as card issuers attempt to compete for online search results. In other words, there is no expectation that the average search engine user clearly understands the nuances of these terms.
12. Can I Use a Prepaid Card to Get Cash at an ATM?
Most prepaid cards allow ATM withdrawals. The biggest variable is fees. Typically, prepaid cards charge nothing for cash withdrawals from in-network ATMs. Out-of-network ATM withdrawals are a different story, and prepaid cards may charge several dollars per withdrawal, plus whatever the cash machine operator may charge. The challenge for a prepaid card owner is to locate a conveniently situated in-network ATM.
That gives an advantage to prepaid cards that have extensive ATM networks. Our top pick for prepaid cards with no ATM fees is Serve® American Express® Prepaid Debit Account, which provides free withdrawals from the MoneyPass ATM network throughout the country. The card charges $2.50 for each withdrawal from an out-of-network ATM.
The card offers many free services, including no reload fee at more than 45,000 retail locations. There are three different Serve cards, each with different features and costs, so you’d need to evaluate each to determine which is right for you.
13. Do I Need a Bank Account to Get a Prepaid Card?
Prepaid cards are aimed squarely at unbanked consumers. Many millennials and Gen Z types are not big fans of banks. In 2019, the FDIC reported that 7.1 million American households were unbanked (i.e., had no bank-based checking or savings accounts). The biggest complaints were a lack of trust toward banks and fees that were perceived to be too high.
A prepaid card provides consumers with much of the convenience of a Mastercard or Visa debit card but without the hassle and expense of owning a checking account. If you do have a checking account, many prepaid cards let you link to it for convenient money transfers. Some banks issue prepaid cards, which means you can reload or withdraw funds by visiting a local branch.
Our favorite prepaid card that requires no bank account is the NetSpend® Visa® Prepaid Card. It charges no fees for online card purchases, direct deposits, and mobile check loading. You can reload the card at more than 130,000 retail locations nationwide. Netspend will reward you by waiving the monthly fee if you meet the minimum deposit requirements.
14. What Other Fees Are Associated With Prepaid Cards?
We’ve identified 29 fees that prepaid cards can extract from you. We haven’t found any prepaid cards that charge all 29 fees, but one may be lurking out there below the radar. The best prepaid cards charge the fewest and the lowest fees.
Over-the-counter withdrawals at financial institutions and/or retail locations
Pay-as-you-go plan
Replacement cards
Stop payment
Transaction declined
Transfer transactions (including Western Union, MoneyGram, Customer Service Agent, etc.)
The difference between high- and low-fee cards could cost you hundreds over the course of a year. That’s reason enough to research the best and cheapest prepaid card that works for you. Be sure to read your cardholder agreement so you’ll understand exactly which fees your account is subject to.
Editorial Note: Our site content is not provided or commissioned by any credit card issuer(s). Opinions expressed on CardRates.com are the author's alone, not those of any credit card issuer, and have not been reviewed, approved, or otherwise endorsed by credit card issuers. Every reasonable effort has been made to maintain accurate information; however, all credit card offer details, including information about rewards, signup bonuses, introductory offers, and other terms and conditions, is presented without warranty. Clicking on any offer on CardRates.com will direct you to the issuer's website, where you can review the current terms and conditions of the offer.
The information on this page was reviewed for accuracy on .
About the Author
Eric Bank
Finance Expert
Eric Bank is an M.B.A. who has covered financial and business topics since 1985, appearing regularly on Credible, eHow, WiseBread, The Nest, Zacks, Chron, BadCredit.org and dozens of other outlets. Eric specializes in taking complex subject matters and explaining them in simple terms for consumer audiences, particularly in the world of personal finance. Eric holds a Master's in Business Administration from New York University and a Master's in Finance from DePaul University.
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