Cold, hard cash is not without its charm, but carrying a lot of it means running the risk of theft. Personal checks and credit cards are safer, but not immune to fraud, not accepted everywhere and can come with high fees.
Fortunately, financial services companies are aware that these payment options aren’t for everyone. Whether for travel, as a gift for kids or just as a way to simplify your everyday transactions, choosing one of the best prepaid debit cards can make your life much easier.
Table of Contents
- 1 What Are Prepaid Debit Cards?
- 2 The Best Prepaid Debit Cards for 2020
- 2.1 Netspend – Best Basic, General-Purpose Option
- 2.2 Walmart Moneycard – Best for Bulk Groceries
- 2.3 Paypal – Best for Digital Operators
- 2.4 American Express Bluebird – Best for Families
- 2.5 Chase Liquid – Best for Teens
- 2.6 CashPass – Best for Big Spenders
- 2.7 Green Dot – Best for Travelers
- 2.8 Brinks – Best for Savings
- 2.9 Payoneer – Best for Freelancers
- 3 Comparing Prepaid and Regular Debit Cards
- 4 Which Major Banks Offer Prepaid Debit Cards?
- 5 What Is the Best Reloadable Debit Card with No Fees?
- 6 Are Prepaid Debit Cards Safe?
- 7 Final Words
What Are Prepaid Debit Cards?
In a sense, prepaid debit cards are like electronic money orders . Even without linking one to a normal bank account, money can be stored on one for use at physical vendors, ATMs, online and over the phone. In practice, they’re swiped much like credit cards, but without the possibility of sending your balance into the red (and having to pay high interest rates on what you end up owing).
One reason many people opt for them over regular credit and debit cards is poor credit or simply a lack of trust in this kind of payment system – even the best credit cards for bad credit require a minimum score or entail poor interest rates. Prepaids, on the other hand, have the virtue of straightforward simplicity. Combined with their versatility and robust protection against theft, this also makes them popular as gifts, or for use abroad as cash passports.
The Best Prepaid Debit Cards for 2020
As you will soon see, what is the best reloadable debit card, – is a question without any simple answer. There are huge differences when comparing the various options: some people use theirs mainly for routine shopping and therefore want an instant prepaid debit card with no monthly fees. Others, such as those who work from home, might not have a regular paycheck and need to top up their cards from a variety of sources. A few people make use of their prepaid cards as a budgeting tool and prefer cards that automate this chore and help you keep tabs on your spending.
Some of these features may be essential to you, others will only be bells and whistles. Making the right choice here can save you a significant amount of money, not to mention frustration, so this might be one instance where it pays to read the fine print. We do our best, but online prepaid debit cards reviews necessarily struggle to keep up with changing bank policies and offers – we recommend that you check out each option before making a firm decision.
Netspend – Best Basic, General-Purpose Option
One feature of this card will appeal to those who are paid by direct deposit: money from the government or your employer will generally show up in your account a few days earlier than by check, which may be enough to prevent you from having to take out a payday loan . In addition, the mobile app and text alerts help you to manage your money better, while the company offers a competitive rewards program and doesn’t charge overdraft fees (i.e. what you’d pay if trying to charge more to the card than your current balance).
The other fees they levy, however, can put a real dent in your savings. These include inactivity penalties as well as monthly charges. If you plan either to use this card only occasionally or simply keep one as an emergency cash reserve, you can find some much cheaper options suitable for college students and other young people.
Walmart Moneycard – Best for Bulk Groceries
While some companies charge you a fee for loading money on your card, Walmart does not as long as you do so at one of their stores – in fact, you can earn between 1% and 3% cash back when shopping with them (this is capped at $75 per year, though). There’s also no monthly service fee as long as you maintain a balance of over $1,000, and like with Netspend, expedited direct deposits come as standard. Also, although this is a store-branded card, there’s nothing stopping you from using it anywhere Visa or Mastercard is accepted.
Paypal – Best for Digital Operators
This online payment giant offers both prepaid and regular debit cards; either is worth checking out if you do a lot of business online. This makes it easy to get cash out of your Paypal account for withdrawal at an ATM, while there’s the option of opening linked savings account offering an impressive interest rate. There’s also no minimum balance, though the monthly service fee of $4.95 will bother some people – $60 a year for a card you might not use very often does seem like a bit much. You do receive cash back on selected Paypal transactions, however, which will offset that amount if you use their service frequently.
American Express Bluebird – Best for Families
Someone who plans on using their prepaid debit card infrequently or for small amounts should most certainly be on the lookout for one that charges you a minimum of fees, especially when the card is simply gathering dust. The Bluebird fits the bill nicely, with no monthly charge, free withdrawals at ATMs owned by one of the best national banks around, and deposit fees of $3.95 or less. This makes the Bluebird one of the best prepaid debit cards with no monthly fees and direct deposit. One thing you should know, however, is that fewer businesses accept American Express than Mastercard or Visa.
This card also entitles you to free customer service. Its most interesting feature, however, is the financial planning apps that come included. There are several cards with an app that allows you to set spending limits, view your balance online and so forth. American Express’s Insights platform, on the other hand, offers extended functionality that makes it easy to see whether you’re on the right track financially.
As some (though by no means all) people who opt for prepaid debit cards aren’t all that familiar with managing money, this is a perk worth mentioning. The same capability is particularly valuable since your Bluebird account allows you to order up to four additional cards for family members older than 13 – you can then monitor their spending and set budget limits if necessary.
Chase Liquid – Best for Teens
Without a doubt, young adults will struggle to learn how finance, saving and budgeting work without a bank account of their own. They can generally open a checking account (jointly with a parent) from the age of 14, but this is probably more than they need and can be over-complicated to manage.
The Chase Liquid may be what’s needed to fill this gap. In the first place, there are no fees related to issuing or replacing the card, loading money onto it or withdrawing cash at any of Chase’s 15,000 ATMs spread across the country. Despite the monthly fee of $4.95, this makes this card one of the most economical for someone making numerous small purchases, while they can review their spending online or using a mobile app. And, just to put a cherry on top, the rewards program means getting free coffee.
CashPass – Best for Big Spenders
The ability to charge thousands to your card is not important to everyone, but it does have certain advantages. The portability, wide acceptance and fraud protection make a prepaid debit card ideal for international travel, for instance, while being able to draw large amounts of money 24/7 can be invaluable in an emergency.
The CashPass allows you to spend up to $5,000 daily, load up to $10,000 on the card in one day (up to a maximum of $20,000) and withdraw $920 at an ATM. Like the American Express Bluebird, you can also order additional cards for family members, meaning that they’ll be able to get cash in a hurry when they need to.
The CashPass fee structure, though comparable to other high limit prepaid debit cards in 2020, is unfortunately not cheap. They’re completely upfront about this and the individual amounts are not huge, but the total adds up remarkably quickly. If you truly think you need those high limits, this is a good option, but not if you just plan to use it at restaurants and grocery stores. It seems that allowing access to such large amounts places a larger burden on them when it comes to avoiding fraud and money laundering, which explains why their customers pay extra.
Green Dot – Best for Travelers
Prepaid debit cards are perfect for travel abroad: they’re cheap and easy enough to get to carry a spare or two, they can often save you money fast on foreign exchange and, since they don’t allow overdrafts, force you to stay within your budget. What makes the Green Dot Unlimited card a good choice in this regard is that they charge no overdraft fees: if you try to charge more than the card holds, the transaction won’t go through, but neither will you be penalized.
Should your card get stolen or damaged, they will also send you a replacement, loaded with whatever your balance on the old card was when you reported it lost, within a few days. What’s even more attractive about this card is that it can be linked with a savings account paying 3% interest and also pays you 3% cash back on any purchase you make online. Unlike with most prepaid options, you can also order paper checks, essentially making this an international prepaid debit card with checking account if you need it.
Unfortunately, their foreign transaction fee also runs to 3% of the amount drawn, to which you can expect $3 or so to be added by the owner of the ATM. This is not unusual, though you may be better off with a cash passport instead, especially if traveling to multiple countries.
Brinks – Best for Savings
A prepaid debit card is typically not seen as a way to save. Still, with almost 20 million Americans not having a formal bank account, it’s worthwhile thinking about this as an alternative. As you have seen, plenty of “prepaid” cards now come with many of the perks associated with traditional banks, including rewards on some types of spending, the ability to write checks and interest-bearing savings. One unusual feature of this particular option is that it’s one of the few prepaid debit cards that let you overdraft – though only up to $10 below zero.
The Brinks Mastercard package currently pays an impressive 5% on the first $1,000 loaded onto your card, though the rate drops dramatically after that sum has been reached. Also, depending on which payment plan you choose, this interest might quickly be eroded by the numerous transaction fees they charge. Despite this, if you are having trouble dealing with a traditional bank, this can be a worthwhile way of seeing at least some growth in your money.
Payoneer – Best for Freelancers
The last company on our list is somewhat unique in that it caters explicitly to the self-employed, those working online in particular. For this reason, the card holder often won’t be the person paying funds into his own account: Amazon, Airbnb and several other marketplaces are integrated with this platform. Multiple countries and currencies are supported, as are several ways of making payments.
For many in this position, their best choices will be a prepaid debit card either from this company or from Paypal. Each has points in its favor: global reach, ease of use and several business-facing functions. Payoneer seems slightly more expensive, but choosing between them basically comes down to which you and your customers are more familiar with. It used to be difficult to transfer money between the two, but this has been fixed – if you accept payments from a variety of sources, you may well opt to go with both. If you don’t need quite the same range of capabilities, Movo might be more your thing, as this platform also allows you to transfer money easily.
Comparing Prepaid and Regular Debit Cards
In practice, there’s little real difference between paying for something with a prepaid or normal debit card. You enter your PIN or sign your name, the vendor gets paid and the corresponding amount is subtracted from your account with the card company. What is different is the relationship between bank and customer.
Conventional banks usually emphasize building relationships with their customers, especially the more solvent ones who are likely to sign up for additional products. Wealthier individuals automatically have access to the cheapest deals and best service.
The link between a prepaid card issuer and its customers is much more hands-off and will probably exist only online. Few prepaid cards require any kind of credit check, as they simply don’t allow you to spend more money than you’ve loaded onto the card. It also used to be the case that bank account holders had more legal protections than prepaid users, but this is no longer the case – though fees in the prepaid world are still often higher than with traditional checking accounts.
The money left with prepaid providers is said to be in a “virtual” account, though this is of little practical significance. There’s also a difference between reloadable and single-use prepaid cards, which is pretty much explained by their names. Reloadable cards can be recharged by depositing cash at the card issuer’s partners or branches, wiring money from a normal bank account and sometimes by taking a photo of a check. Single-use cards can only be used until the initial dollar amount on them has been exhausted and, like gift cards , are often valid in certain stores.
How Does a Prepaid Debit Card Work?
Like with a bank account, you will want to keep tabs on how much is left on the card – which takes only a minute online – as well as problems like duplicated or unexpected charges. Depending on your service provider, you may also encounter chargebacks, where some vendors initially accepted your card but changed their minds for some reason.
Which Major Banks Offer Prepaid Debit Cards?
When it comes to prepaid debit cards, it’s often difficult to figure out who is actually issuing them: a payment network like Mastercard or Visa makes things work behind the scenes, a completely different company manages the account, while the actual money is kept in a regulated bank to take advantage of FDIC insurance.
Most leading banks, in fact, are involved with prepaid debit cards in one way or another. Cards sold under their own name will often be your best option due to their large branch networks and financial muscle. In fact, since they’re more likely to report to credit bureaus, using a big-bank prepaid card responsibly and for a long time can actually improve your lending score. Younger companies, on the other hand, often offer specialized products that may suit you better.
What Is the Best Reloadable Debit Card with No Fees?
Much as we might like it to be otherwise, all prepaid debit cards charge fees in one form or another. The important thing is to find the fee structure which will work best for you – your card is definitely going to cost you something; let’s just try to keep it to a minimum.
Are you planning to use the card as your main method of payment? You should be looking at cards that charge a flat monthly fee instead of having a pay-as-you-go schedule based on the number of transactions. If you just want a card for occasional use, you’re better off not paying something each month whether you use it or not, or having to fork out an inactivity fee if you don’t make a purchase for a certain length of time.
Brinks’ prepaid Mastercard, for instance, doesn’t charge a fee for swiping at the checkout, making it something serial shoppers would do well to consider. Chase Liquid, by contrast, allows you to load up money and withdraw it at any Chase ATM for free, making it a good option for people who prefer to deal in cash. Also, don’t forget rewards programs: depending on how you like to shop, Walmart or Paypal’s cards may be your most economical option. In any case, the best prepaid debit cards with no fees are those which suit your lifestyle best.
Are Prepaid Debit Cards Safe?
The simple answer to this is yes and no, but mostly yes. No technology is perfect, but prepaid debit cards are certainly on the more secure side. Many prepaid debit card scams are of the “social engineering” variety: if anyone threatens you with an unpaid tax or utility bill and demands payment via prepaid cards, they are certainly not who they say they are.
Compared to cash, they’re less attractive to steal, as a mugger won’t know the PIN number. Usually, as long as you report the theft immediately, the issuer will refund you whatever sum was left on the card, and even if not, the maximum amount you can lose is limited to the card balance.
For the most part, all you need to do is follow some common-sense precautions. Don’t enter your PIN number if a stranger is crowding your back, don’t allow anyone you don’t trust to handle your card and above all, check your transaction history every week or so. Yes, this is boring, but both accidental mistakes and deliberate overcharging do happen. As long as you bring this to the bank’s attention within a reasonable amount of time (and didn’t do something obviously irresponsible), they’re normally responsible for reimbursing you, after which they may or may not try to sort things out with the payee.
Can You Use a Prepaid Debit Card for Online Shopping?
Scam artists, it seems, are everywhere on the internet. However, as long as you share your card information only with trusted websites that use encryption and a secure payment gateway, the risk is minimal. Moreover, prepaid cards actually make you safer when shopping on the web: you’ll be in a heap of trouble if someone manages to gain access to your bank account – with prepaid, there’s no bank account to infiltrate and identity theft is much harder.
Especially if you can’t get or don’t want a regular bank account, turning to a prepaid debit card can be a lifesaver. Used with care, they can be economical as well as a big help with your budgeting – and in any case, sometimes the only alternative is to drag bags of cash around.
For most people, these cards are a solution that’s only necessary temporarily. However, with estimates on the number of Americans who have no or only partial access to banking services topping 60,000,000 – often not by choice – it’s no surprise that prepaids have exploded in popularity. This trend is only likely to continue in 2020, meaning more choice and more power in the hands of consumers. If you find yourself in this position, looking into prepaid options might save you a huge amount of bother .
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