Prepaid debit cards are the fastest-growing payment method in the U.S., according to Consumer Reports. These cards allow consumers to do all the things they would with a normal debit card — shop in stores and online, pay bills and manage spending.
But they don’t help you build credit and can involve a number of different fees. Typically seen as a good option for people with low income, bad credit, teenagers, and college-bound students, prepaid debit cards offer a lot of functionality and benefits that even regular credit and debit cards don’t. But these cards aren’t for everyone.
Before you read our list of the top 5 prepaid debit cards, you should carefully weigh whether getting one of these cards is the best option for you. Oftentimes they come with high fees and unclear term agreements. So here are a few things you should consider before getting a prepaid debit card:
- Checking — Have you looked into getting a checking account? Oftentimes getting a checking account is cheaper than getting a prepaid debit card.
- Credit — A prepaid debit card won’t hinder your credit, but it won’t help it either. If you’re looking to build your credit history, don’t get a prepaid debit card.
- Features — With so many banks and companies offering prepaid debit cards these days look at all the features of the card you’re interested in getting. How convenient is it to load money? Where can you withdraw money (for little to no fees)? If you’re not comfortable with the card’s features, don’t get it and consider other options.
- Fees — Some of the fees that you might be responsible for should you get a prepaid debit card include activation, monthly service, ATM withdrawal, reloading, and card replacement. Can you afford to pay these fees? Go through each line of the prepaid debit card terms and compare the associated fees with what you might pay using an actual credit card instead.
With those points in mind, here are 5 of the best prepaid cards in the market today: