Likely very few people can say they have racked up a $40 bill at McDonald’s. Sounds crazy, right? The average overdraft fee a bank charges for insufficient funds is $34. If you pay $5 for your food and accidentally overdraft your checking account in the process, that meal just cost you $40.
You might be wondering:
Is there a way to avoid overdraft charges? Yes, get a reloadable prepaid debit card. Prepaid debit cards, also called prepaid credit cards, provide an alternative to traditional banking services.
Here’s the deal:
There are tons of reasons why people get reloadable prepaid cards. Maybe you're one of the 17 million Americans without a bank account. Or maybe you recently filed for bankruptcy.
It’s possible that you want a regular bank account but can’t get one because you have a negative ChexSystems report or a low FICO score.
If you're thinking about getting a low or no fee prepaid debit card, we realize that picking the right one can be difficult, so we picked the best prepaid cards currently available.
Editorial Note: This content is not provided or commissioned by the credit card issuer. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by the credit card issuer. This site may be compensated through a credit card issuer partnership.
This article was last updated March 5, 2019 but some terms and conditions may have changed or are no longer available. For the most accurate and up to date information please consult the terms and conditions found on the issuer website.
How to get one: There are tons of places where you can get a Serve prepaid debit card. Buy one at a gas station such as 7-Eleven, pick one up at Rite Aid or Walmart, or request one online. There’s no fee if you order a card online, but you’ll spend $4 or $5 if you do it in a store.
Who accepts it: Well-known retailers and restaurants, such as Walmart, Target, and McDonald’s, accept Serve payments. We’ve had some issues using it at local mom-and-pop shops, so carry a backup debit or credit card if you plan to visit small businesses or stores that don’t accept American Express.
Features: Features vary based on which plan you choose. We love the 1% cash back option for the American Express Serve Cash Back card, but we also dig the $0 cash reload fee associated with the American Express Serve Free Reloads card. All 3 cards available from Serve offer fraud protection and no fee, in-network ATM withdrawals, and we’re thankful we can upload paychecks from our smartphone instead of mailing them to American Express.
Fees: Fees are reasonable for the American Express Serve card. They’re average compared to other prepaid debit and credit cards, which is partly why we named this the Best Basic Prepaid Debit Card. The regular Serve card only charges $1 per month for maintenance, and you can get that fee waived if you add at least $500 per month via direct deposit. We’ve already told you about the fee-free ATM withdrawals, but we’re going to go ahead and mention them one last time because they totally rock. Heck, sometimes regular bank accounts even charge for ATM withdrawals.Details:American Express Serve »
How to get one: You can order a Green Dot prepaid Visa online for free or purchase one for a few bucks at the store. Lots of tax prep offices, gas stations, and grocery stores - more than 100,000, if we’re being exact - carry Green Dot cards.
Who accepts it: You can use Green Dot anywhere that accepts Visa debit cards. We’ve found that many people who use other prepaid cards can’t rent cars or reserve hotel rooms, but Green Dot cardholders report that they generally don’t encounter issues doing either of those things. Keep in mind that renting a car or hotel room may result in a preauthorization hold on your account, which isn’t anything Green Dot can control.
Features: You can have your tax refund deposited as long as it doesn’t exceed $10,000. We like that Green Dot lets us keep tabs on our funds with text notifications that tell us about our daily and weekly balances. Oh, and if you’re worried you’ll forget to pay a bill, Green Dot lets you schedule payments via online bill pay an entire year in advance. Guess we can’t use the “I forgot to pay” excuse anymore when a bill is due.
Fees: At $7.95, the monthly fee for Green Dot is higher than most other prepaid cards on our list. However, you can get the fee waived if you make 30 purchases in one month or deposit at least $1,000. You also have the option to use the pay-per-purchase plan instead of paying a set monthly fee.
ATM withdrawals are free when you use MoneyPass ATMs and $2.50 at other machines. Expect to spend up to $4.95 if you reload your card using cash rather than direct deposit or paper check.Details:Green Dot Prepaid Visa Card »
How to get one: You can buy a NetSpend prepaid Visa for $4.95 at Walmart or CVS, but it’s free to order a card directly from NetSpend. If you order a card online, expect it to arrive in approximately 7 to 10 business days.
Who accepts it: NetSpend prepaid cards work at retailers who accept Visa debit cards. You can use it to shop online, pay bills, or buy things from a regular store. It’s also popular with employers who want to eliminate paper checks; numerous payroll departments recommend these cards to employees who don’t have bank accounts.
We first learned about NetSpend cards on I Got My Refund, a popular website that discusses when tax refunds arrive. Many IGMR members swear by NetSpend cards because they typically receive their federal refunds faster than other filers.
Features: The Bluebird card is the closest thing to a regular checking account on our list of the best prepaid cards. However, we voted the Bluebird as the all-around best prepaid debit card, so we’re awarding the honor of “Best Card for People Who Don’t Have a Checking Account” to NetSpend. NetSpend offers a purchase cushion of up to $10, but it also offers overdraft protection - a feature that is rarely found in prepaid debit cards. Overdraft fees are just $15 per transaction, and NetSpend generally covers up to $100.
Fees: The fees vary for NetSpend cardholders depending on which account option you choose. We like the Pay-As-You-Go Plan, but other folks may prefer to pay the $5.95 or $9.95 monthly fees for premier accounts. Expect to spend $2.50 to withdraw money from an ATM. If you want to avoid fees for withdrawing your funds, you can make free transfers to a PayPal account or regular bank account.Details:NetSpend Prepaid Visa Debit Card »
How to get one: Request a prepaid PayPal Mastercard online, or buy one at a participating retailer. We’ve seen them at Walgreens.
Who accepts it: This prepaid debit card is accepted pretty much anywhere that takes MasterCard debit payments, including eBay. If you find a company that doesn’t take the card, send them a payment using the card’s online bill pay service.
Receiving rather than sending? Give the payment agency your card’s account number so they can send funds via direct deposit. We’re psyched that this prepaid debit card clears direct deposits up to 2 days early - it makes it so much easier for us to pay bills on time.
Features: Transform digital payments sent via PayPal into cash when you withdraw funds with this prepaid debit card. You can withdraw cash at an ATM or request cash back when you make a purchase at a participating retailer. If you need to load cash to the card, there are more than 130,000 NetSpent Reload Network locations to choose from.
We like that there’s a free savings account linked to the card. You earn an impressive 5% APY for balances smaller than $5000, which is a higher rate than we’ve seen many traditional banks offer.
Fees: The fees aren’t awful for the PayPal prepaid debit card, but they are higher than other cards on our list. We just keep reminding ourselves about all the fees associated with traditional checking and savings accounts, and that helps us make peace with shelling out the $4.95 monthly maintenance fee and the $0.50 fee to check our available balance (it’s free over the phone but costs $0.50 at an ATM).Details:PayPal Prepaid Mastercard »
How to get one: Shell out $5 at your local Walmart if you need a Bluebird card immediately. They’re usually sold in the Money Center, which is where you cash checks and buy money orders. Some stores have them at the service desk or near the cell phones.
If you can handle waiting approximately 10 business days for your card to arrive, you can request one online for free.
Who accepts it: You can use Bluebird pretty much anywhere that accepts American Express cards. A handful of cardholders say they’ve had issues paying their electric bill or making monthly payments to credit card companies with their debit cards, but we’ve discovered a workaround. You can have Bluebird mail the payee a check via online Bill Pay, or you can write a preauthorized check and give it to a company or individual yourself.
Features: When it comes to features, we feel like nothing compares to the Bluebird card. This is the only prepaid card we’ve found that lets you write checks, and we love that they send you several checkbooks for free.
Depositing checks is simple. Instead of limiting you to direct deposit or forcing you to mail in paper checks, Bluebird has a convenient mobile upload option. If you need funds ASAP, you can pay a small fee to access them. If not, you can wait 10 days for funds to clear - free of charge.
Fees: If you’re of the “if it’s free it’s for me” mentality, Bluebird is the card for you. There’s no activation fee, no monthly fee, and no annual fee. It’s free to upload money with a debit card, add cash, or deposit checks. There’s no charge to withdraw money from a MoneyPass ATM, pay bills online, or write paper checks. Cash Pickup Powered by Ria is the only feature we’ve found that isn’t free, and that costs between $3 and $9 per transaction.Details:Bluebird from American Express »
The Scoop on Prepaid Debit Cards
Okay, we gave you the lowdown on the best prepaid debit cards above, but perhaps you still have a question (or 10) about prepaid cards in general. Not a problem - we’ve got answers to questions you didn’t even realize you had! Taking risks with financial products isn’t something most folks like to do, so look through the helpful info below before you select a prepaid debit card.
A prepaid debit card, often called a prepaid card, is a card that functions like a traditional debit card with some minor restrictions (more on that later). You deposit funds in advance, and you usually can’t spend more than you have in your account. One well-known exception is Netspend, which allows qualifying cardholders to overdraft up to 3 times per month. Each approved overdraft occurrence has a $15 fee, but that’s half the price of the average overdraft fee at a traditional bank.
You can use prepaid cards to shop 'til you drop, stuff your face at restaurants, or remain on good terms with your utility providers. Some people use prepaid debit cards to save money for vacations, birthdays, or special events because it keeps them from draining their regular bank accounts.
Prepaid debit cards work almost the same way that traditional debit cards work. You fund your card, and then you spend (or better yet, save) the money that’s on the card. One notable difference between prepaid cards and regular debit cards is that you generally fund prepaid cards somewhere other than a bank, like at Walmart or a gas station. The exception is if you have a prepaid debit card or secured credit card through a brick-and-mortar bank or credit union.
People often use terms like “prepaid debit card” and “prepaid credit card” interchangeably, but they shouldn’t. A prepaid debit card is generally used as an alternative or supplement to a regular bank account, and it doesn’t affect your credit. Well, we take that back - if you rack up fees on your prepaid debit card account and refuse to pay them, the company might send you to collections. That would go on your credit report.
A prepaid credit card is a misnomer for secured credit cards. A secured credit card helps you establish or repair credit using your own money rather than funds from the credit card company. Your balance and payment history show up on at least one of the three main credit bureaus, so make sure you pay on time. If you don’t, you might get hit with a late fee - and a significant decrease in your credit score.
You can request a prepaid debit card online or pick one up at a gas station, supermarket, check-cashing store, or Walmart. Some banks also offer prepaid debit cards, but you’re more likely to find them at retailers.
Many prepaid cards are free, but some places charge a few bucks for them. You may need a photo ID when you buy the card, but you probably won’t need the mound of documents that traditional banks often request. The process for getting a prepaid card is usually quick and simple.
The deposit process for your prepaid debit card varies depending on which company you use. Walmart lets you deposit cash, money orders, or checks on Bluebird cards by visiting the Money Center. Some Walmarts also let you add cash at the service desk and registers, and we’ve even seen stores with special ATMs that accept cash deposits for the Bluebird card. You can also mail checks or money orders to Bluebird or use the check-capturing feature on the mobile app for virtual deposits.
Most prepaid debit cards we’ve researched accept virtual deposits. There are sometimes long wait times of 7 to 10 business days for checks to clear, so deposit paper checks ASAP if you need them for an important bill. You may also have the option to fund your account with a traditional debit or credit card, which is awesome if you forgot you set up your prepaid account for automatic billing and need to make sure a payment clears.
Prepaid debit cards used to get a bad rep as outdated and inconvenient because they didn’t accept electronic deposits. Times have changed, and we can’t think of a single prepaid debit card that doesn’t let cardholders use direct deposit. There are limits, though, so keep that in mind if you’re raking in the moola each pay period. Some cards limit direct deposits to $5,000 or $10,000 per payment, and we’ve seen a couple cards that don’t let employers or government agencies deposit more than $2,000 at a time.
If you’re expecting an unusually large deposit, like for a federal tax return or a lump sum for a long-awaited SSDI payment, contact your card company in advance. They may make an exception and push the deposit through instead of flagging your account.
Unless you’re planning to win the Powerball or rake in some major cash from your job, you probably won’t exceed the balance limit on your prepaid debit card. Most prepaid cards, including Bluebird by American Express, cap your total account balance at $100,000. This differs from traditional checking and savings accounts because banks usually let you deposit as much money as you want. However, traditional bank accounts are legally obligated to report cash deposits of $10,000 or higher to the federal government. You can’t fully avoid money-related restrictions unless your savings account consists of an envelope under your mattress.
If your income barely exceeds your bills, you may find it comforting that the majority of prepaid debit cards don’t require you to maintain a specific daily or monthly balance. You probably won’t get hit with hefty maintenance fees or threatened with account closure if you only have a few bucks in your account.
You can shop online with a prepaid debit card as long as your purchase price doesn’t exceed the balance in your account. You also have to make sure the website accepts your card carrier. For example, you can’t use the Bluebird card if a vendor refuses American Express payments, and you may have trouble shopping from overseas companies if your card doesn’t cover international transactions.
Prepaid debit cards have numerous benefits when you compare them with traditional debit cards, including:
Some people prefer the anonymity of a prepaid card. As with traditional debit cards, your deposits are still traceable by the federal government, but you don’t have to drop off funds in person (unless you want to). Many prepaid cards let you deposit funds from your smartphone, and some special ATMs accept cash deposits for prepaid cards.
You can use a prepaid debit card to save for special occasions or unexpected emergencies. Some people use their prepaid cards to escape abusive situations because they provide a secret way to save money. People also use prepaid debit cards to hide funds from significant others who battle addiction issues or find it difficult to stick to a budget. If you have children, you can create a family account through Bluebird or other prepaid debit card providers and transfer funds directly to their accounts in just a minute or two.
After hours upon hours of detailed research from a combination of reputable sources and personal experience, we compiled a list of the 6 best prepaid debit cards above. In case you don’t have time to scroll up and check it out, we’ll list our favorites here:
We also put the secured Capital One MasterCard on our list of the best prepaid debit cards even though it isn’t technically a debit card. That’s because many people mistakenly assume prepaid debit cards and prepaid credit cards are the same thing, so we wanted to include it in case it helps you find the perfect card for your lifestyle.
PayPal-Related Questions About Prepaid Cards
The PayPal prepaid debit card is a MasterCard for PayPal account holders. The card lets you access the funds in your PayPal account without transferring them to a verified bank account or sending them to an authorized payment center. You can apply for this prepaid debit card if you do not have an existing PayPal account, but you receive limited access to the features and benefits (like online card services) that PayPal members have.
Apply online if you want to skip the purchase fee, or pick up a card at a participating retailer. If you buy this card from a retailer, you’ll have to pay a fee for the MasterCard plus immediately load at least $10 or $20 into your account. You can’t load more than $500 the first time you add money to the card.
You’ll shell out a monthly fee of $4.95 per month for the PayPal prepaid MasterCard. If you’re concerned about the fee, talk some of your friends into getting a card. You receive $5 for each qualifying referral. You can also earn cash-back rewards on some purchases, so that helps make the monthly fee less of a hassle.
PayPal doesn’t make you choose between a regular PayPal MasterCard and a prepaid PayPal MasterCard, so feel free to apply for both if you want. We’ve discovered that many freelancers, eBay sellers, and business owners who store the majority of their earnings in PayPal have both cards. That way, they still have immediate access to their funds if one of the debit cards gets lost or stolen.
Think that you don’t mind waiting? Keep in mind that PayPal is notorious for taking weeks to issue or replace debit cards, and people have been griping about the long wait times for years. For this reason, it may be beneficial to have your prepaid PayPal debit as a backup in case your regular PayPal card disappears.
Depends on the card. Although PayPal’s FAQs no longer state that you can’t verify your account with a prepaid card, forums are filled with comments from frustrated prepaid cardholders who can’t link their cards. If you want to verify your PayPal account with a prepaid card, make sure it’s one that collects your personal billing information. Your billing address for your prepaid card has to be the same as the one on your PayPal account or the system won’t approve your verification request.
PayPal does let users verify their accounts with the PayPal prepaid MasterCard. We’ve also heard that PayPal approves verification requests from Green Dot cardholders.
But why does verification even matter? Well, PayPal has spending and withdrawal limits for members who aren’t verified, and many of those limits are lifted after verification.
Yes, as long as the prepaid card meets the qualifications outlined above. Make sure your prepaid debit card and PayPal account have the same billing address, and remember that some prepaid cards aren’t compatible with PayPal.
For the most part, yes. Prepaid cards often proudly state that they’re backed by the FDIC, which is a fancy way of saying you don’t lose your money if the company that issued your card files for bankruptcy. We can’t recall seeing any prepaid cards during our research that weren’t protected by the FDIC.
Other security measures are in the works, but they don’t kick in until April 1st, 2018. These new guidelines mimic the requirements that traditional banks honor, including:
Even though the changes don’t start until 2018, many card issuers have already started implementing them.
You generally can’t overdraft a prepaid debit card as easily as you can overdraft a traditional checking account. Many companies only let you spend what’s in your account, so it’s not possible to dip below $0. There are exceptions, though, like if your cardholder charges a monthly fee and you don’t have the funds to cover it.
You can also end up with a negative balance if a company places an authorization hold on your card (more details on that in the section about hotels and rental cars). We’ve heard reports of cardholders ending up with a negative balance after paying at the pump for gas, which is probably why many prepaid cards require you to pay the cashier directly when you get fuel. If you’re wondering why gas can mess with your balance, it’s because some gas stations just preauthorize your card for $1 and charge the final fee a couple days later.
If you’re renting a vehicle or booking a hotel room, there’s a good chance that the amount they initially debit your account might change. Could be less, could be more - depends on how long you keep the rental and whether you take good care of it.
This happens with traditional debit cards and credit cards, so you’re not being punished for having a prepaid account. However, it can put you in a bind if you’re traveling and need money for gas or food. Contact the hotel or rental company before they run your card; many of them are happy to share the amount of the preauthorization hold. You can also pay with cash and ask the company to only use your card as a backup if your charges exceed your payment, but this doesn’t always prevent hefty holds on your account.
You don’t need good credit - or any credit, for that matter - to get a prepaid debit card because the card issuer does not run a credit check. The exception is if you’re currently going through a bankruptcy. The prepaid card companies probably won’t know or care, but your bankruptcy trustee may request that you don’t open new accounts until your case is discharged.
Regardless of credit, you may have an issue getting a prepaid debit card if you’ve burned the company before. For example, PayPal might not give you a prepaid debit card if you currently have a negative balance. Other companies might deny your request if you recently had an account shut down for violating the card issuer’s guidelines. Aside from those issues, it’s very difficult to get rejected for a prepaid debit card.
Fees and Costs Related to Prepaid Debit Cards
Fees for Visa gift cards vary depending on where you buy them. We usually see processing fees of $3.95 or $4.95 for Visa gift cards sold at retailers, but you also have to pay the price of the card. Cards are generally sold in $25 increments.
You can also buy Visa gift cards online. Processing fees generally range from $2.95 to $7.95, plus the cost of the balance on the card. Keep in mind your recipient might get charged a monthly account fee or get hit with charges if they don’t use the card within 6 or 12 months.
We hate to bear bad news, but many prepaid card fees are unavoidable. However, we’ve got tips to help you avoid some of the fees associated with prepaid debit cards:
If you get hit with an unexpected fee, don’t hesitate to contact the card company. Sometimes they’ll waive fees if you ask nicely or have a valid reason why you don’t feel you deserve to pay them.
Sometimes. We discussed fees a bit above, but we didn’t really talk about which cards have fees. Every prepaid card we’ve researched has some sort of fee, but you can avoid monthly maintenance charges if you request an American Express Bluebird card. In general, that card seems to have very few fees when compared with other prepaid cards. There are prepaid debit cards issued by MetaBank that have no monthly fee, but you get hit with fees for ATM balance inquiries and other common card-related activities.
As far as costs go, the American Express Serve debit card comes in second with a budget-friendly $1 monthly maintenance fee. Avoid cards from The Bancorp Bank if you’re looking for low monthly fees; most of them charge nearly $10 per month.
You can usually request a prepaid debit card online from the company that issues the card you want. If that’s not an option or you need the card ASAP, try the following places:
You can also get a prepaid debit card from some tax prep places, but they usually only give them to people who file a state or federal return.
We’re not saying you should hide from legal garnishments and bank levies, but we’ll admit it’s usually more difficult to garnish a prepaid debit card than it is to garnish a traditional bank account. For starters, the person suing/garnishing you has to know about your account. If you’re being garnished by a government agency such as the IRS, they probably know your account exists.
Also, keep in mind that some debtors send garnishments directly to your employer. That means your job can garnish your paycheck and then give you what’s left, and there’s no legal way around it (well, unless you file bankruptcy - but we’re not saying you should do that either).
If you try to hide from a garnishment, you might end up with a lien on your property. Government agencies can place a lien on your car, home, boat, or other valuable assets. The same goes for agencies such as Child Support Enforcement or the equivalent in your state.
If your kid is at least 13 years old then yeah, you can probably add them to your prepaid account as an authorized user. Younger kids who want their own card might have to stick with Visa gift cards rather than applying for a long-term prepaid account.
Kids usually can’t get their own prepaid bank account until they turn 18, but the rules vary by company.
The SMIOne card is the answer to your prayers if you’ve got an ex who swears the child support check they never sent is in the mail. SMIOne works directly with the agencies that collect child support, and then it deposits funds from the noncustodial parent directly on a prepaid Visa card a couple days later. If you’re waiting on a garnished tax refund from the noncustodial parent, expect to wait anywhere from 30 days to 6 months. This gives the noncustodial parent time to file a claim arguing that they should get to keep their refund.
Once you have an SMIOne card, you can use it for payments other than child support. It’s commonly used for direct deposits related to government benefits, employers, and the IRS. You can use the card anywhere Visa is accepted, and you usually get one free ATM withdrawal each time funds are deposited. Guidelines vary by state.
Did we forget anything? Share your questions or opinions about prepaid debit cards below. We’re here to help!