Did you know that nearly 10% of heads of households are employed with prepaid debit cards? These unique bank cards are similar to gift cards in that they have a balance that is paid in advance.
Seeing as prepaid debit cards are often issued by major banks and even credit card companies, they all come with associated fees. This can make them a costly alternative to normal debit cards at times but also a great alternative for those who don’t qualify for credit cards.
Instead of paying with cash, simply load a prepaid debit card and spend normally without the need for a credit check. Not sure which is right for you? We’ve curated a list of the 5 best prepaid debit cards for 2020.
What is a Prepaid Debit Card?
A prepaid debit card works in a very similar way to a gift card. You find the card you wish to purchase and you load it with a set amount of cash. The only difference is that, unlike a gift card, you can use a them anywhere they accept the card type (Visa, Mastercard, etc.).
Why use a prepaid debit card? They’re easy to get, especially if you have poor credit or don’t have a bank account. They are usually best for those who:
- Have poor credit and can’t get a credit card.
- Have no credit. If you’re too young to have a credit card or would like to teach your children about smart spending habits, a prepaid debit card is a great way to ensure they develop great financial habits while also avoid overspending.
- Cannot open a bank account because they lack the proper documents or a social security number.
- Are traveling and want to avoid carrying around lots of cash.
- Have no debit or credit card and need to make online payments or purchases.
All in all, prepaid debit cards are great for those who are trying to stick to strict budgeting rules. If you tend to overspend, they might be a great option for you as you’ll only be able to spend what you load onto the card. Some prepaid debit cards are with no fees, however, some come with certain fees.
Prepaid Debit Cards vs. Regular Debit Cards: Which is Better?
When you open a bank account with a bank you normally receive a debit card. Because you have an account, you don’t often have to pay fees for using the bank’s ATMs or for other things such as reloading the card with cash.
Prepaid debit cards, however, come with certain fees, which can include reloading fees, activation fees, purchase fees, and monthly fees. And sure, monthly bank fees are a thing you have to think about with regular debit cards and accounts, but you can often waive them.
On the flip side, with them, you don’t have to worry about being charged overdraft fees or insufficient fund fees and you also don’t ever have to worry about making payments as you might with a credit card.
The 5 Best Prepaid Debit Cards 2020
As mentioned, prepaid debit cards come with fees, so it’s important to shop around and ensure that you’re getting the right card for your needs and spending style. We’ve rounded up five of the best prepaid debit cards for 2020 based on various different factors that most Americans seem to need out of this kind of cash card.
Bluebird by American Express
Bluebird is accepted virtually anywhere where they accept American Express, which can sometimes make it a bit less widely useable than other cards that are Visa or Mastercard. However, there are close to zero fees associated with the card, and a few other perks.
📅 Monthly Fees & Costs: No monthly fee and no activation cost
🛍️ Purchase Fees: None
🤑 Reloading: You can reload the Bluebird card via a direct deposit, debit card transfer, card-to-card transfer, or mobile check deposit but each will incur a third-party fee depending on the method and financial institution; cash reloads possible for a $3.95 charge at some stores
🏧 ATM: MoneyPass network ATMs are free (over 30,000 in the network)
✅ Credit Check Required: NO
💰 Other Cool Features: Purchase Protection, Fraud Protection, free direct deposit, free bill pay, check writing, and savings-like account options
FamZoo Prepaid Debit Card
FamZoo prepaid debit card is a great option for younger savers and spenders. The prepaid debit card is designed for those with younger children who need to learn about managing their own finances.
📅 Monthly Fees & Costs: $5.99 per family or as low as $2.50 per month for a pay-in-advance plan; no activation cost
🛍️ Purchase Fees: None
🤑 Reloading: Direct deposit and digital wallet payments are free; bank account transfers are also free but can incur a cost of $0.95 at PopMoney.com; cash reloading fees are between $4-6 per transaction
🏧 ATM: MoneyPass network ATMs are free (over 30,000 in the network)
✅ Credit Check Required: NO
💰 Other Cool Features: Instant transfers, activity alerts, parent-paid interest, savings goals, and family billing
Starbucks Rewards Visa Prepaid Card
Do you ever heard of starbucks prepaid debit card? Whether you visit Starbucks frequently or not, the visa prepaid card they offer is a fantastic option when it comes to best fee-free prepaid debit cards. You’ll earn rewards for spending that you can redeem, but the card itself is great regardless of how much coffee you drink.
📅 Monthly Fees & Costs: No monthly fee and no activation cost
🛍️ Purchase Fees: None
🤑 Reloading: You must load a minimum of $25 to activate the card, and it has to be from a Chase checking or savings account or a debit card from another bank (this card is very well-suited for members of Chase banking)
🏧 ATM: Unfortunately, you can’t use the card to make ATM withdrawals
✅ Credit Check Required: NO
💰 Other Cool Features: Earn 1 Starbucks Star for every $10 you spend
Akimbo Prepaid Mastercard
If you have trouble budgeting your cash, the Akimbo Prepaid Mastercard is the best option for you. It’ll allow you to create and use separate cards for separate budgets. This means that you won’t ever spend money designated for groceries on something such as bills or entertainment.
📅 Monthly Fees & Costs: No monthly fee and no activation cost; if you’re going to add more than one sub-card, it costs $4.95 per card
🛍️ Purchase Fees: $.99 for each PIN purchase but no fee for signature transactions;
🤑 Reloading: You can reload your Akimbo card via a direct deposit, debit card transfer, card-to-card transfer, or mobile check deposit but each will incur a third-party fee depending on the method and financial institution; cash reloads possible for $4-6
🏧 ATM: $1.98 fee for each ATM withdrawal
✅ Credit Check Required: NO
💰 Other Cool Features: You can easily schedule auto-reloads for recurring expenses such as bills or subscription payments, plus the card’s app makes it easy to manage all of your sub-accounts for streamlined spending and budgeting
PayPal Prepaid Mastercard
If you receive payments frequently via PayPal (freelancers, contractors, small business owners, etc.) then a PayPal Prepaid Mastercard is a great option for spending. However, others who don’t frequently use the platform can benefit from the card’s low fees and other perks.
📅 Monthly Fees & Costs: $4.95 monthly fee that gets deducted from your PayPal balance
🛍️ Purchase Fees: N/A
🤑 Reloading: The card comes with a free direct deposit option that works with most major banks. If your PayPal account is already connected to your bank account or regular debit card, this is pretty easy to set up; cash reloads possible at over 130,000 reload locations all over the country
🏧 ATM: $1.95 ATM withdrawals (plus owner surcharge) at ATMs where MasterCard, Cirrus, or PULSE are accepted
✅ Credit Check Required: NO
💰 Other Cool Features: If you link the card to a PayPal account, you access lots of features such as the ability to use an online bill pay service and open a linked interest-earning savings account.
Other Banking Options
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Here're more you need to know about best debit cards, savings accounts and checking accounts:
The 6 Best Debit Cards That Pay Cash Back Rewards
The 5 Best Prepaid Debit Cards
Hidden Savings Account Costs You May Not Know About
Savings Account vs. CD: What's the Difference & How to Choose?
The Best Online Checking Accounts of All Time
The 6 Best No-Fee Checking Accounts
