Prepaid Cards 123

How to Choose the Best Prepaid Debit Card

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.

Cutting Through the Marketing

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.

Identify Your Must-Haves

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:

Network

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.

Limits

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:

Features

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: