Frequently Asked Questions
What is the difference between a prepaid debit card and a regular debit card?
A prepaid debit card is a reloadable card and works like any debit card. But unlike a debit card, a prepaid debit card is not linked to a pre-existing bank account, and you don’t add funds through a bank teller. Instead, you can load a prepaid card with reload cards, online transfers and other non-traditional methods.
You can only get a debit card if you already have some kind of relationship with a bank, such as a checking or savings account, for example. Most prepaid cards are also FDIC-insured, which means they’re safer to use than uninsured payment methods.
What is the difference between a prepaid debit card and a credit card?
When you charge with a prepaid debit card, you don’t charge against a line of credit like you would with a credit card, where there is a maximum amount of credit you can charge. Prepaid debit cards are tied to the amount of money you choose to load, which means that after using all the funds, you need to add more money to the card.
Because you can’t charge against a line of credit, there’s also no chance for you to end up with a balance to pay off every month, which results in never accumulating interest. Credit card issuers also check your creditworthiness at the time of account application, but prepaid debit cards don’t require a credit history.
Why should I get a prepaid debit card?
If you currently do not have a relationship with any banking institution but you need to pay for purchases with a card as opposed to cash, a prepaid debit card may be a good payment option. For example, a prepaid card would come in handy if you want shop online, book a hotel or pay bills electronically.
If you do not have a credit history or if you have bad credit, a prepaid card is easier to acquire. And, if you are being denied a regular checking account, a prepaid card could be an alternative.
* The credit score approval metrics are only guidelines and approval is not guaranteed. This information is based on data provided by Credit Karma