Guide to Prepaid Debit Card Fees (and how to avoid them) :

All prepaid debit cards come with fees. Some more than others. In this guide, we examine the types of prepaid debit card fees most frequently encountered and give you tips on how to avoid them.

Man holding a sign saying "No Hidden Fees"

Every prepaid card charges some type of fee–even the low fee cards. But understanding those fees will not only help you choose the best card but also help you avoid many (even most) of those fees.

In this guide, we’ll explain each fee that prepaid cards charge, although certainly not every card charges every fee. Finally, we’ll show you some simple ways to minimize many of the fees or avoid them altogether.

List of Prepaid Card Fees

Click the link below to see the explanation.

Activation Fee: An Activation Fee is the fee that is charged when you first activate the card. Some cards call this fee a “start up fee” or a “purchase fee”. It’s basically the amount you have to pay to get the prepaid card and begin using it. It is a one time fee; once it’s paid you never have to pay it again.

Not all cards charge an activation fee. And for those cards that do, some waive the fee if you get the prepaid card online. You can find prepaid cards that do not charge an activation fee by using our Prepaid Card Search Tool.

For those prepaid cards that charge an Activation Fee, it can range from $1.00 to $9.95.

Monthly Fee: The Monthly Fee is the recurring fee you pay once a month to carry the card. It’s really just the charge you pay to be a card member, similar to annual fees some traditional credit cards charge. The fee can be anywhere from $1 to as much as $15 per month.

A few cards do not charge a monthly fee. Others offer opportunities to waive the monthly fee if your use of the card meets some criteria. For prepaid cards that waive the monthly fee, the waiver is typically available if you meet one or more of the following:

  • load a minimum amount to the card during the prior month (typically $500 or more),
  • maintain direct deposit to the card, or
  • make a minimum number of transactions (typically 30 or more).

Purchase Fees: A Purchase Fee is the charge you incur when you make a purchase with your prepaid card. Most prepaid cards charge either Purchase fees or a monthly fee, but usually not both. Of the cards that charge Purchase fees, many charge less for purchases that you sign for (credit transactions) versus purchases where you enter your PIN (debit transactions). Purchase fees for signature purchases range from $.50 to $1.00 and from $.35 to $2.00 for PIN purchases.

Cash Reload Fee: A Cash Reload Fee or cash load fee is the charge you incur when you add cash to the card, other than through direct deposit or bank transfer. Most prepaid cards don’t directly charge a fee when you load cash on the card; rather, the fee is charged by the retailer or reload network that provides the reload service.

For example, cash can be added to many cards by purchasing a reload card or reloading cash at the register using Green Dot Reload @ the Register, Vanilla Reload, or Western Union, to name a few. Those reload services are available at various stores and other retailers. The fee is charged by the retailer at the time you purchase the reload card or load cash at the register. Cash reload fees range from $1.50 to $4.95 per transaction.

ATM Withdrawal Fee: ATM Fees are incurred when you withdraw money from an ATM. You actually incur two fees–one charged by the card provider and another by the owner of the ATM. Fees charged by prepaid cards range from $1.00 to $3.00. The fee charged by the ATM network varies.

Some cards offer an ATM network with free withdrawals when using an ATM in the network. In those cases, both fees are waived. You can find prepaid cards that offer free ATM withdrawals by using our Prepaid Card Search Tool.

ATM Balance Inquiry Fee: Most cards charge a fee when you check your balance at an ATM. Again, you’ll actually incur charges from both the card issuer and the ATM owner. The portion charged by prepaid card issuers ranges from $.33 to $2.50. For prepaid cards offering free in-network withdrawals, balance inquiry fees are also typically free when made at a network ATM.

Additional Card Fee: Some prepaid cards charge this one-time fee for each additional card issued on the same account. The Additional Card Fee ranges from $2.00 to $10.00.

Over-The-Counter Cash Withdrawal Fee: The Over-The-Counter Cash Withdrawal Fee is a fee charged for a teller-assisted withdrawal at a bank or other financial services location. Prepaid cards frequently have a higher limit for over-the-counter withdrawals versus ATM withdrawals, but the fee for the withdrawal is often considerably higher as well. The Over-the-Counter Withdrawal Fee can be assessed as a fixed fee or a percentage of the withdrawal amount, depending on the prepaid card issuer.

The Over-the-Counter Withdrawal Fee ranges from $1.95 to $25.00, for cards that charge a flat fee or 3% for cards that charge a percentage of the withdrawal. Prepaid cards issued by traditional retail banks, such as the Chase Liquid card, typically offer this service without charge at their branches. In addition to the Over-the-Counter Withdrawal Fee, you may also incur a fee from the bank or financial services location providing the service.

Paper Statement Fee: For most prepaid cards, statements are automatically provided electronically as the default. But you can request paper statements–for a fee with most cards. A Paper Statement Fee is charged per statement requested and ranges anywhere from $.99 to $5.95 per mailed statement.

Customer Service Fee: Although many prepaid cards provide free calls to customer service, some cards charge a fee. Typically, all account information such as transaction history and account balance is available online without charge, and some cards offer over-the-phone account information via their automated system without charge as well. So, for those cards that charge for customer service, charges typically apply only if you speak with a live person. Moreover, some cards provide for one free call per month or free customer service calls pertaining to lost or stolen cards.

ATM Decline Fee: An ATM Decline Fee is charged when you attempt to make an ATM withdrawal and don’t have a sufficient balance on your card for the transaction. The transaction will be declined, and some cards charge a fee when this happens. The fee can range from $0.15 to $2.00 per declined transaction.

Stop Payment Fee: A Stop Payment Fee is charged when you request that your prepaid card issuer cancel a check issued through its bill payment service. Stop Payment Fees range from $4.95 to $20.00.

Preauthorized Payment Decline Fee/Debit Decline Fee: A Preauthorized Payment Decline Fee (also sometimes called a Debit Decline Fee or an ACH Decline Fee) is charged by some card issuers when an ACH withdrawal is declined for insufficient funds on your card. An ACH transaction is typically a bill payment where you’ve authorized the vendor to automatically withdraw funds from your account to pay a bill, such as automatic payments that you set up through a utility company or lender. The Preauthorized Payment Decline Fee runs anywhere from $1.00 to $20.00.

Inactivity Fee: If you don’t use your card for a period of time (usually 90 days or more), some cards will charge a monthly Inactivity Fee while the card is not in use. Generally, that means that you have not made any purchases, made any cash withdrawals, or loaded any funds during the applicable period. This fee is sometimes also referred to as an “Account Maintenance Fee.” The fee ranges from $1.95 to $8.00 per month.

Card Replacement Fee: Most cards charge a replacement fee for a new card if yours is lost, stolen, or damaged. The Card Replacement Fee ranges from $2.00 to $10.00.

Foreign Transaction Fee: A Foreign Transaction Fee (or currency conversion fee) is charged when you make purchases outside the U.S. and in a currency other than the U.S. dollar. The fee is a percentage of the total transaction amount and ranges from 1% to 4.95%. This fee is in addition to the Purchase Fee, if any, charged by your prepaid card for purchase transactions generally.

Foreign ATM Fee: A foreign ATM fee is charged for ATM withdrawals outside the U.S. The fee is frequently higher than the domestic ATM Fee charged by the same card. The fee ranges from $1.45 to $5.00 per transaction.

Custom Card Fee: A few cards offer the option to customize the art on the prepaid card, by uploading an image at the time you purchase the card that is imprinted on the card. Of those that do, many charge a one-time Custom Card Fee that ranges from $1.75 to $5.00.

Liquidation Fee: Also referred to as a “Check Refund” or “Return Balance” fee, a Liquidation Fee is charged by some prepaid cards if you request a paper check to return the balance of your prepaid card at account closing.

Simple Ways to Avoid Prepaid Card Fees

Although you may not be able to avoid all prepaid card fees, making some changes in how you use prepaid cards can help you minimize them. Here’s how.

Choose the Right Card

There’s no question that the first and most important way to minimize fees is to choose the right prepaid card. The best prepaid card for you will be one that meets your needs in terms of card features and limits with the least fees based on your usage. So, rather than focus on a single fee, calculate the total cost of the card based on your estimates of how you’ll use the card. We recommend that you review our Guide on How to Choose the Best Prepaid Card for more considerations and then use our free Prepaid Card Search Tool for a side-by-side comparison of costs based on your usage.

Use Direct Deposit

If your prepaid card is your main source of spending and paying bills, consider using direct deposit to deposit your paycheck to your card. There are a number of benefits of using direct deposit with your prepaid card, including reducing or eliminating the monthly fee for several prepaid cards. If you can’t use direct deposit, there are other ways to eliminate or reduce the monthly payment for some prepaid cards, such as using the card for a minimum number of purchases or loading a minimum amount on the card.

Minimize ATM Withdrawal Fees

Several cards offer free ATM transactions within their networks. If you use cash frequently, you may want to look for a prepaid card with free in-network withdrawals. Just as importantly, you want to make sure that the card’s ATM network has convenient locations near you.

Two of the largest ATM networks used by prepaid cards providing free ATM withdrawals are Allpoint and MoneyPass. You can see the locations offered by each by clicking on the links below, along with participating prepaid cards for each network.

Allpoint: ATM Locations

Participating Cards:

MoneyPass: ATM Locations

Participating Cards:

Even if you choose a prepaid card without free ATM withdrawals, you can still minimize your ATM fees by keeping your number of cash withdrawals to a minimum. These days, most purchases can be made with a debit card. So, simply paying by debit card rather than cash can mean fewer trips to the ATM.

You can further decrease the number of trips to the ATM by considering your cash needs for the month, and making larger withdrawals at one time rather than several smaller ones.

Finally, consider getting cash back at the register with participating retailers. Getting cash back requires entering your PIN at the register. Many grocery stores, pharmacies, and other retailers offer cash back on PIN transactions at no cost. And provided your choose a prepaid card without a purchase transaction fee, getting cash back at the register will be free.

Balance Inquiries Without the Fees

Balance inquiry fees are perhaps the easiest to avoid with free features offered by prepaid cards. First, all prepaid cards offer free online access to your account information, including your current balance, making it easy to check from your home computer. Second, if you need to check your balance while on-the-go, most prepaid cards offer a mobile app, text alerts, or both making it easy to check your balance without incurring ATM balance inquiry fees or customer service fees.

If you use either of these methods to check your balance, you can also avoid the ATM Decline Fees that would otherwise result from attempting to withdraw more than your current balance. Finally, if you have a prepaid card with free in-network ATM withdrawals, ATM balance inquiries are also free provided they’re in-network.

Moving On? Close Your Account

There’s no reason to keep a card you’re not using. If you’ve decided your card isn’t for you, close it, and avoid the inactivity fees. If there’s a balance on the card, transfer the money to your bank account rather than incur a liquidation fee for requesting a paper check. If you don’t have an account, spend down the balance on normal purchases. Many vendors will allow you to split payments across multiple payment methods so you can use the remainder of your card balance without having a purchase equal to the balance.

Choose Electronic Statements

Electronic, rather than paper statements, are the norm for most prepaid cards. But make sure when you sign up for a new card that you elect to receive electronic rather than paper statements and avoid the fee. Save time, save trees, save money.

Travel Abroad with the Right Card

Most prepaid cards charge a foreign transaction fee for purchases in another country. But there are a few that don’t. If you’re planning a trip outside the U.S., it may be worthwhile to get a prepaid card that doesn’t charge a foreign transaction fee, even if you just use it for the trip. With foreign transaction fees at nearly 5% for some cards, the fees on your trip can quickly add up.

Author: Mike Clark
credit partner

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