We've selected the top prepaid cards of 2024, based on value-added features, fees, ease of access for funding/cash withdrawals, and past customer reviews.
Prepaid cards were first introduced to use as gifts and to serve the members of the "unbanked" community who needed an alternative to traditional banks for paying bills and making online purchases. Their popularity exploded, with competition driving card companies to include extra benefits and features. New card companies are popping up all the time, and many traditional banks and digital finance platforms are now offering their own prepaid cards. With all the cards available, it's hard to know what features to look for and which prepaid card company is the best. Below, we break down what to look for to determine the best prepaid card companies in 2023.
Prepaid cards come with a Visa, Mastercard, American Express, or Discover logo and operate similar to a debit card. However, they aren't connected to a traditional bank account. You can make purchases with prepaid cards online or in person, up to the amount preloaded on the card. Many cards allow funding through direct deposits, such as payroll checks. Most prepaid debit cards are reloadable, so you can add additional funds as needed through various methods, such as transfers and cash reloads.
User u/blablahblah on reddit.com offers a simple, first-person look into how prepaid cards work
“It's essentially just a debit card, except you can set it up through a store like Walmart instead of going to a bank and signing up for an account- you buy a card, load money on it, and then can spend it at any store that accepts the corresponding card type (Visa, MasterCard, Discover, or AmEx).”
Prepaid cards offer a number of advantages over traditional bank debit cards. Because most prepaid cards don't allow purchases that are more than what's available on the card, you can avoid having pricey overdraft fees. Additionally, since the prepaid card isn't tied to your bank account, you can safely make online purchases without worrying about your bank card number falling into the wrong hands. Because the available funds are limited, prepaid cards are a great way to send money to minor children without having to give them cash in person. People who aren't able to open a traditional bank account can use prepaid cards exclusively for all their banking needs.
Prepaid cards come in various types, each with its own primary benefit. You can have just one card or multiple prepaid cards, all at the same time. There's no credit check or qualifying process, so the choice of which cards to use is up to you.
A great prepaid card company isn't just great in one area. You have to look at the whole picture. One card may have many advantageous features, but it also may have a large number of hidden fees. Another card may have almost no fees but isn't accepted in as many places. When looking into prepaid card companies, you want to pay attention to fees, network acceptance, reload options, ATM accessibility, security protections, benefits, and features.
Fees are the biggest downside to prepaid cards. Some cards are upfront about their fees, while others aren't so forthcoming. Make sure you do your research ahead of time to find out what fees a card company charges. Here are the most common fees you'll find with prepaid cards:
Most prepaid cards are issued through one of the four major credit card networks: Visa, MasterCard, American Express, and Discover. While most places accept cards from all four networks, there are some that don't accept American Express or Discover. If you plan on using your prepaid card often with a particular vendor, make sure you find a prepaid card they accept.
The methods available to put money onto a prepaid card are just as important as being able to reloadable it in the first place. If you can only load it with cash at one location, it wouldn't be very convenient. Fortunately, there are many ways to load funds onto most cards.
While it may seem ironic that you would need to withdraw cash from a prepaid card, many people need cash after funding their cards with direct deposits. Some cards are part of networks made up of thousands of ATMs that allow free withdrawals, while others require you to pay a fee for any ATM use. Some ATMs, especially those at traditional bank branches, don't recognize all prepaid cards.
While many federal protections that cover traditional banks don't apply to prepaid cards, card companies can still offer them, so consumers can feel secure. Make sure to check for important consumer protections, such as the following:
Prepaid cards have evolved far beyond their role as an alternative to traditional banking. Many cards include extra features, making them even more convenient and appealing.
You'll find your ideal prepaid card company by matching their card features to your needs. If you're on a tight budget or fixed income, you might be mostly concerned about avoiding fees. However, if you plan to have your paycheck deposited and frequently need to withdraw cash, you may care more about ATM locations and access. A card that offers cash-back rewards could be the best option for someone who plans to make a large number of online purchases but wants the bank account protection a prepaid card offers. For parents, the ability to transfer funds on the fly to teens or college students might outweigh all other considerations. Whether a prepaid card company is right for you depends on how you plan to use the card and what features will benefit you the most.
Although prepaid cards carry major network logos, such as Visa and MasterCard, and allow you to make purchases, they're still distinct from other payment types.
Debit cards are issued by a bank and tied to a traditional bank account. When you make a purchase with a debit card, the charge is debited from your bank account balance. If your funds are less than the purchase, your account can go into the negative. Most banks will charge an overdraft fee if the account isn't brought back into the positive before the pending charge is posted. Overdraft fees can be very high, typically about $35. Once the overdraft fee is applied, your account will go even further into the negative, which may cause the next posted payment to overdraft. If too many pending payments post while your account is in the negative, you may end up with hundreds of dollars in overdraft charges. This won't typically happen with prepaid cards because the purchase will usually decline if you don't have enough funds available. Some cards allow some purchases, gas for example, to go into the negative.
Credit cards allow you to borrow money against a line of credit to make purchases. The total amount charged during a billing cycle is sent to you in the form of a bill. If you pay the bill in full on time, you won't pay any interest. However, you have the option to pay less, down to the minimum required payment, and leave the rest of the balance subject to interest charges. You need a credit check to qualify for most credit cards, with the lowest interest rates typically requiring the highest credit score. While securing a credit card and making regular payments can help improve your credit score, paying more than 30 days late or using up too much of your available credit can bring it down. Prepaid cards don't require a credit check and using them doesn't affect your credit.
Traditional banks usually do a credit check before allowing you to open an account. If you have bad credit, or you've had issues with a previous traditional bank account, and it's been reported to an agency such as ChexSystems, you may not qualify for a traditional bank account. Anyone can qualify for a prepaid card, regardless of their previous banking history.
Regardless of any expert recommendations, you're the best person to determine which prepaid card company is right for you. Now that you know what features and benefits are available, you just need to look at which ones matter most to you. However, you don't have to decide on just one card. You could have one general purpose card for one reason, and then a second card with different features for another. Whatever route you go, make sure you take a look at the fees, network acceptance, reload options, security protections, benefits, and features offered by any prepaid card company you're considering before making a decision.
Prepaid cards can be obtained even with a bad credit score, and some newer prepaid card providers (like Card.com) provide a routing number and account number for direct deposits.
Even if a card has no monthly, transaction, or loading fees, you may still have to pay for ATM use. However, some cards, such as the American Express Bluebird card, can be used without having to pay any fees, including in-network ATM use. However, even with this card, fees may apply to transactions made on subaccounts.
Since prepaid cards operate without connection to a traditional bank account, anyone can get a prepaid card.
Prepaid cards are available at retailers ranging from big box to dollar stores. Gas stations, convenience stores, and drug stores may also sell them. Many banks offer them at their local branches, and you may also purchase them online.
Only Visa or Mastercard prepaid cards from financial institutions in the Zelle Network will work with Zelle. For example, the SmartAccess cards are associated with PNC Bank, so the Zelle app accepts them. However, many of the accepted cards are being discontinued and may not be available for new account holders. Other digital finance platforms accept prepaid cards. You may want to check with your preferred platform to see what cards they accept.
User u/jerontion ran into an issue when trying to use a prepaid Visa card on the Venmo app:
“I registered a visa gift card to venmo. When attempting to send a friend money using the card balance, it didn't work, only my bank acct did. Both cards linked and show as payment options, but one gives an error.” Others users in the comments related to the post and mentioned that only some cards work with these types of apps.
Activity from prepaid debit cards isn't reported to the credit bureaus, so they won't affect your credit score.
Prepaid cards aren't linked directly to a traditional bank account the way a bank-issued debit card is, so they can't be linked to multiple bank accounts. However, many cards have budgeting features included.
You can use prepaid cards to fund third-party providers that offer international and domestic transfers. Not all cards are accepted by all providers.
Many prepaid card issuers allow you to personalize your card with your own custom image.