The number of prepaid debit cards has grown considerably over the past few years. That's great for consumers. New lower-fee options are now available, and the number of features have increased. But if you're looking to get a new prepaid card or to replace the one you have, the options can be daunting to say the least.
That's why we created this guide. The guide will help you find the best prepaid debit card. It will also provide guidance on how to use the free tools on PrepaidCards123 to make your search easier.
Some of the benefits touted by prepaid cards are available with virtually all cards. So starting with an understanding of which items are the same for all cards can help you focus on the differences that will be important to you.
First, the application and qualifying process are the same for all cards. No prepaid card requires a credit check. The prepaid card issuers are not extending credit, so no credit check is necessary. Similarly, no prepaid card requires a ChexSystems® or similar report. All cards require only a valid address and social security number to get the card.
Second, every card has free web access showing the available balance.
Third, virtually every card has free direct deposit, although cards differ on the additional benefits offered to members maintaining direct deposit--such as a lower or waived monthly fee.
Fourth, all cards provide free transfers from a bank account.
Fifth, no prepaid card has overdraft fees. While one of the benefits of prepaid cards, it's a benefit that they all share.
Finally, all prepaid cards can be used like credit cards for purchases wherever the payment network (Visa, MasterCard, American Express, or Discover) is accepted. A transaction is processed as a debit when you enter your 4-digit PIN. All other transactions are processed as credit.
Getting your lowest cost card is important, but you have to make sure your prepaid card meets your needs. After all, if you plan to pay your bills with your prepaid card, then getting an inexpensive card that doesn't offer bill pay just doesn't make sense. So before looking at fees, consider how you'll use the card and determine what's critical versus what's not.
For example, are you going to use your prepaid card for everyday purchases? Or will you use it mainly just to pay bills? Will your prepaid card be a complete substitute for a traditional checking account? Do plan to use an ATM frequently to withdraw cash? Do you want a card that can help you budget your money? Answering these questions will help you narrow the search.
When you've determined how you'll use your prepaid card, focus on these specifics:
There are four major processing networks: Visa, MasterCard, American Express and Discover. For prepaid cards, the primary difference between the networks comes down to acceptance for purchases. If you intend to use your prepaid card as your primary card for everyday purchases, then we recommend narrowing your search to Visa and MasterCard. While American Express is widely accepted, fewer retailers accept American Express than Visa and MasterCard. Fewer still accept Discover Cards.
Every prepaid card has limits--maximum amounts for spending, ATM withdrawals, cash reloads, and the overall balance of the card. The amount of the limits differs substantially among prepaid cards.
In determining which limits are critical to you, consider the following:
Prepaid Cards offer a number of different features and benefits. When deciding which card to choose, separate the critical from the nice-to-haves. Consider the following core features to limit your search:
Mobile App/Text Alerts. More and more prepaid cards offer mobile apps for iPhone and Android, and most (but not all) of them have text alerts. Having at least one of these features is critical if you'll need to check your balance before making a purchase or to find an ATM while you're out. Mobile apps provide access to more features and information on the go than text alerts and will allow you to avoid potential charges from your mobile provider for text messaging.
Free In-Network ATM Transactions. While free ATM transactions are more of an issue of fees than features, we've included this as a potential must-have feature for one reason. If you intend to withdraw cash frequently from your prepaid card, an otherwise low-cost card will quickly become a high-cost one if it doesn't offer free ATM transactions.
You can easily search for prepaid cards that meet your network, limits, and features criteria using our prepaid card search tool. The search tool provides filters for each selection and returns all prepaid cards that meet your selected criteria.
Now that you've decided on your must-have features, the next step is to find which cards have the lowest cost. Rather than focusing on individual fees, calculate your total monthly cost based on your intended usage, which will give you a more useful basis for comparison.
The fees that will most likely make up most of the cost of using a prepaid card are the following:
You can easily estimate your total monthly cost by using our prepaid card search tool and entering your usage information. Your estimated total cost will be automatically calculated for each prepaid card meeting your search criteria.
Once you've narrowed your search and estimated your usage, you can choose a few of the lower cost cards to compare features and benefits that may not be critical but are nice to have--such as a high-interest companion savings account or a direct-deposit bonus. You can also compare less common fees that may not factor into your regular monthly cost of using the card but that you may incur sometime during the life of your prepaid card account--such as an inactivity fee if your account is dormant for a few months or a foreign transaction fee for purchases abroad.
You can easily compare all prepaid card fees, limits, and features side-by-side on PrepaidCards123. On the search page, click the compare checkbox under the card image in your search results to add the card to your saved list. Then click the Compare Cards button to open the comparison page. Here you'll see all of your saved cards listed. You can check or uncheck as many or as few of the limits, features, and fees that you want to compare.
If you follow this process, you will have identified the critical features that you're looking for in a prepaid card, chosen a lower cost card based on your usage, and considered other features or fees that may help you choose among a few competing cards. From here, you can make your final selection by clicking the Apply Now button under the image of the prepaid card, which will take you to a secure application page for your choice.