Prepaid cards are a kind of card that allow you to entry cash you’ve loaded to the prepaid card account.
They could typically be known as “prepaid credit cards” or “prepaid debit cards,” however not like credit score cards, prepaid cards don’t contain borrowing any cash, which implies there’s no credit score test required. And not like debit cards, prepaid cards aren’t linked to your financial institution accounts.
Instead, you add cash on to the prepaid card account. When you make purchases with the cardboard, you utilize the cash you loaded.
A prepaid card could be a good different to a bank card if you wish to keep away from the temptation of racking up debt. It also can present the comfort of plastic should you don’t qualify for or have a checking account.
Here’s our tackle the best prepaid cards of 2022, plus some options to think about.
Card Best for Bluebird® American Express® Prepaid Debit Account No month-to-month charges Mango Prepaid Mastercard® Saving cash American Express Serve Cash Back® Cash again rewards Walmart CashCard Walmart buyers FamZoo Kids
- How we picked these cards
- How do I get a prepaid card?
- Do prepaid cards damage your credit score?
- Are prepaid cards price it?
- (*5*) to prepaid cards
Best for no month-to-month charges: Bluebird® American Express® Prepaid Debit Account
Here’s why: Lots of prepaid cards cost varied charges. But should you’re payment averse, you’re not completely out of choices — the Bluebird® American Express® Prepaid Debit Account may very well be a strong selection for you.
It comes with the next:
- No month-to-month payment
- No payment to get the cardboard on-line ($5 card worth in retailer)
- No ATM withdrawal payment at MoneyPass ATMs ($2.50 payment at different ATMs, plus the ATM operator’s payment, if any)
- No payment for money and debit card reloads at Walmart (however as much as $3.95 at different retailers)
You even have the choice to load cash onto your card totally free through direct deposit or a cell test deposit.
The solely disadvantage to free cell deposits is the 10-day ready interval. If you need your cash sooner, you’ll need to pay 1% or 5% of the test quantity, relying on the sort of test, with a $5 minimal payment.
Best for saving cash: Mango Prepaid Mastercard®
Here’s why: While another prepaid cards mean you can put aside cash in a separate financial savings account, you’ll be hard-pressed to discover a card that’ll reward you extra for doing so than the Mango Prepaid Mastercard®.
Its financial savings account presents an annual proportion yield, or APY, of as much as 6% on balances as excessive as $2,500. You’ll get a 0.10% APY on balances increased than that.
To qualify for the 6% APY, you’ll must make no less than $1,500 in “signature purchases” every month and have a stability of no less than $25 in your financial savings account on the finish of the month. “Signature” purchases are transactions during which you don’t use your PIN to authorize the sale.
But there are some charges to bear in mind of.
- There’s a $5 month-to-month payment, which the cardboard issuer waives should you obtain no less than $800 in direct deposits every month.
- There’s no activation payment.
- There’s a $3 payment for home ATM withdrawals (plus any payment the ATM operator would possibly cost).
- You could pay a payment to load money onto the cardboard, but it surely will depend on how and the place you load cash onto the cardboard.
Learn extra in regards to the Mango Prepaid Mastercard® in our editorial assessment.
Best for money again rewards: American Express Serve Cash Back®
Here’s why: Rewards are one of the largest options you’ll miss out on should you keep away from credit score cards. But with the American Express Serve® Cash Back, you’ll earn 1% money again, which is utilized to your account and can be utilized for future purchases, on each buy you make.
While that doesn’t compete with the highest money again credit score cards, it’s higher than nothing.
Here are some of the charges the American Express Serve Cash Back® comes with.
- A month-to-month payment of $7.95, except you reside in New York, Texas or Vermont
- No payment to get the cardboard on-line (as much as $3.95 card worth in retailer)
- No payment for withdrawals from MoneyPass ATMs (as much as a $2.50 payment per transaction for out of community ATMs, in addition to any payment the ATM operator could cost)
- Cash reload at retail places can value you as much as $3.95, relying on the retailer
To study extra in regards to the American Express Serve® Cash Back, learn our editorial assessment of all three Serve® cards.
Best for Walmart buyers: Walmart CashCard
Here’s why: If you’re a frequent Walmart shopper, you would possibly admire that you should utilize the Walmart CashCard to earn 3% money again for buying at Walmart.com, 2% at Walmart gasoline stations and 1% at Walmart shops — for a complete of as much as $75 in money again annually.
But the cardboard comes with some charges, together with the next:
- There’s a $1 card buy payment.
- You’ll pay a $5.94 month-to-month utilization payment, which may be waived should you arrange a qualifying direct deposit.
- There’s no payment so as to add money utilizing the in-store app at Walmart — however including money on the register will value you $3, and different places will run you as much as $5.95.
- Expect to pay charges for ATM withdrawals, teller money withdrawals, overdrafts, international transactions and extra.
You also can financial institution with the Walmart CashCard. Some of its banking options embrace overdraft safety, early paycheck entry by means of direct deposit, and invoice pay. You also can earn 2% APY on any cash you will have in financial savings.
Best for teenagers: FamZoo
Here’s why: The FamZoo card provides mother and father a prepaid choice to permit their children the possibility to earn and spend cash. It additionally has built-in instruments that may assist train monetary duty.
Parents load up a important funding card, which they will then use to switch cash between every member of the family with a card. As a mother or father, you should utilize the cardboard to distribute cash for issues like errands, chores or allowance — it’s as much as you. You also can request reimbursements or contributions to a shared household fund.
Here are some of the cardboard’s different key options and costs you could know.
- There’s a $5.99 month-to-month household subscription payment, however you’ll save should you prepay for 6-, 12- or 24-month packages.
- FamZoo doesn’t cost sure frequent charges, like for ATM withdrawals, however different charges could apply.
- There are a number of methods to reload, however charges and switch speeds can differ.
- You can solely load $2,500 per day, and the max complete you’ll be able to carry on the household cards is $5,000. Plus, different limits on masses, transfers and withdrawal limits apply.
There are additionally useful monetary instruments that may assist children study to watch spending, make budgets and save utilizing automated deductions. Parents can choose to reward accountable monetary behaviors with parent-paid curiosity and parent-paid chore commissions.
Looking for extra household finance instruments? Check out our article on cash and finance assets for teenagers.
How we picked these cards
The best prepaid cards should not solely nice budgeting instruments, however additionally they present rather a lot of different options and are comparatively inexpensive. We thought-about a number of components as we compiled our record, together with charges, additional advantages, free reload choices and methods to get a refund.
We additionally needed to focus on cards that go above and past the norm. The cards we selected have particular options, like a high-rate financial savings account, compatibility with well-liked digital wallets or possibly an enormous free ATM community.
How do I get a prepaid card?
Depending on which card you need, there are a number of other ways you’ll be able to apply.
- In-store — Some retailers, like Walmart, mean you can buy and cargo cash onto a brand new prepaid card.
- Online — Many prepaid cards mean you can apply by means of their web sites.
- At a financial institution department — Some banks, like Chase, supply prepaid cards which you can apply for at your native department.
Do prepaid cards damage your credit score?
Prepaid cards don’t damage your credit score. Unlike credit score cards, you aren’t borrowing any cash from the cardboard issuer — you’re accessing your personal cash that you simply’ve uploaded to the cardboard account.
Because of this, prepaid cards don’t require a tough credit score inquiry, which may have a barely unfavorable impact in your credit score scores.
But prepaid cards additionally don’t have any constructive impact in your credit score. With a bank card that experiences to the three main shopper credit score bureaus, making funds on-time and in full and maintaining your total stability low may also help you construct credit score historical past. Prepaid cards don’t report any of your exercise to the bureaus, in order that they gained’t aid you construct credit score.
Are prepaid cards price it?
Prepaid cards could make sense in sure conditions — for instance, should you don’t have a checking account otherwise you simply don’t need the temptation of utilizing credit score.
But there may be downsides to prepaid cards. One main draw back? The comparatively excessive charges only for holding, loading, and even withdrawing cash from the cardboard. And you gained’t construct credit score through the use of a prepaid card. If you’ve already obtained a checking account, or suppose you is likely to be occupied with opening one, think about your options as an alternative.
(*5*) to prepaid cards
As you resolve if a prepaid card could be the best selection for you, listed here are some options to prepaid cards to think about.
Free checking account
If you’re prepaid cards in your cash administration as a result of of the charges that may include financial institution accounts (like overdraft charges), you is likely to be occupied with a free checking account from a financial institution or credit score union as an alternative.
Secured bank card
Prepaid debit cards can’t help you in constructing credit score like a secured bank card can. Compare presents for secured credit score cards on Credit Karma to study extra about your choices — some secured cards don’t require credit score checks and even financial institution accounts to use. Keep in thoughts, nonetheless, that they do require a safety deposit, so that you’ll need to put cash down to make use of this sort of card.
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