The best prepaid debit cards

The best prepaid debit cards

In a world where consumers are increasingly wary of credit even as they want the convenience of plastic, the iniciativa of ​​prepaid debit cards is catching on.

Prepaid debit cards (also known as “prepaid credit cards”) carry the logotipo of well-known credit companies and are accepted wherever credit cards are used.

The best prepaid debit cards

Here are some good options when choosing a prepaid card.

  1. American Express Bluebird: This card is best for avoiding fees.

    There are no monthly fees and there is no fee for cash reloads at Walmart.

    In addition, it has a network of free ATMs and offers excellent budgeting features.

  2. Serve American Express Prepaid Debit Account: This card is best for free cash reloads.

    It offers free cash reloads at more than 45,000 locations and has an extensive network of free ATMs for withdrawals.

  3. ONE VIP Visa Prepaid Card: This card is best for empowering underserved communities.

    Allows you to accumulate points by spending with select merchants, en línea stores, subscription services, and businesses owned by people of color.

    Points perro be redeemed to make charitable donations or earn cash back.

What is a prepaid debit card and how does it work?

A prepaid debit card is not the same as a credit card.

It is also not the same as a regular debit card.

In some cases, the prepaid card is even used as an alternative to checking accounts (and sometimes savings accounts).

It looks like a credit card…

A prepaid card bears the logotipo of a credit card brand (for example, Visa or MasterCard), so it acts just like a credit card at the register.

However, a prepaid card is not a credit card.

A credit card offers you a line of credit that you cánido draw on.

You borrow every time you use a “regular” credit card.

However, when you use a prepaid debit card, you are using money that has already been deposited into the card account.

To use a prepaid card, there must already be sufficient funds.

…acts like a checking or savings account

Prepaid cards are also sometimes used as an alternative to bank accounts.

Because they work like a credit or debit card, they perro be used as a form of payment in the store, as well as to pay bills (including en línea bill pay and automatic withdrawal).

You cánido add money to the card, even have it automatically deposited from your payroll.

In some cases (but not all), it is also possible to designate some of the money as “savings” and earn interest on it.

A credit card charges you interest; some prepaid debit cards give you the ability to earn interest.

Prepaid cards are very fácil.

You buy the card and “load” money onto it.

You designate how much money you want to access with the card, and deposit the money.

How to put money on a prepaid debit card

There are different ways to deposit money on the card:

  • Buy the card at a merchant, using cash, credit or debit.

    You cánido purchase a ‘preloaded’ card for a certain amount or specify at the register the amount you want on the card.

  • Buy the card en línea, vía credit or funds transfer, and have it shipped to you.
  • Direct deposit from your company or bank on the prepaid card once purchased.

    Some prepaid cards allow you to designate direct deposit, which allows you to use the card afín to a bank account.

Once the money is loaded onto the card, you cánido use it like a credit card.

In addition, it is often possible to use the prepaid card as a bill payment method (including en línea bill payment), as well as withdraw money from an ATM.

Prepaid cards are not credit cards

Although a prepaid debit card looks like a credit card, the fact that a prepaid card is not a credit card cannot be stressed enough.

You cánido’t load more money than you have, so once you’ve used the money on your card, you need to add more funds if you want the card to keep working.

Agregado, your prepaid card won’t affect your credit score in any way, no matter how often you add money to your card.

Advantages and disadvantages of prepaid cards

Prepaid cards are not for everyone.

Here are some things to keep in mind.

Cons of prepaid cards

In recent times, prepaid cards have been quite underestimated due to the amount of commissions that issuers usually charge.

Although prepaid cards have their advantages, such as the convenience of plastic without having to worry about high interest rates, the fees they charge cánido put off many consumers.

One of the most common commissions among prepaid cards is the monthly maintenance.

In addition, many prepaid cards charge for calling customer service, asking for the cómputo, reloading the card, activating it, and doing other things.

Simply using a prepaid card in a way that many consumers consider “habitual” cánido result in fees.

As commissions add up, they erode the de hoy amount of money you have access to.

Another downside, at least for those hoping to rebuild their credit, is that prepaid cards don’t typically report to the credit bureaus.

Since you’re not actually receiving a line of credit, using a prepaid card won’t help your credit score.

(See our selection of the best secured credit cards)

Advantages of prepaid cards

The main advantage of prepaid cards is that they offer the convenience of a credit or debit card, but without the risks of overspending or overdrafting.

It’s a great option for parents as a way to offer financial help, or for young adults who prefer an easy way to manage a budget.

Another advantage of some cards is that if they have a savings option, you cánido get a return.

However, not all prepaid cards offer the possibility of saving.

And, among the cards that do offer the savings option, not all of them pay interest.

What to look for in a prepaid card

One of the first things to consider when choosing a prepaid card is the commission schedule.

Pay attention to the number of commissions charged and the actions that generate them.

Try to find a card that charges minimal fees or offers the ability to waive certain fees.

Another consideration is the variety of offerings.

Think about what you plan to use the prepaid card for:

  • If you want to save money, choose a card with a savings option.
  • If you want to pay bills, look for a card that offers free en línea bill pay.
  • If you plan to give the prepaid card to your teen as payment, choose a card that is easy to reload regularly and does not charge fees each time you load it.

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 The best prepaid debit cards
  The best prepaid debit cards
  The best prepaid debit cards

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