Prepaid cards are a great alternative to a debit card if you don’t like having to deal with the bank on a regular basis or you just want a convenient way to spend without carrying around a walletful of cash. With so many different ones to choose from, taking the time to compare prepaid cards is a must if you don’t want to end up shelling out for unnecessary fees or getting services you don’t really need.

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The Chime Card is putting a new spin on the prepaid market by making it possible for users to earn rewards on the things they buy. Essentially, it combines the bonuses that you get from using a traditional credit card with the no strings attached philosophy of a prepaid debit. Chime users can earn in-store credit that can be used at participating merchants or lock in discounts when they spend a certain amount.

Those are some pretty sweet incentives, but how do you know when it’s worth to switch from another prepaid card? We decided to take a closer look at Chime and how it compares to the Bluebird card from American Express to see whether the rewards are enticing enough to justify making the leap.

Maximizing your rewards with the card

Getting the most out of Chime means knowing when and where you can get the biggest rewards. Earned credits can range from $1 to $10, depending on how much you spend and they work similar to cash back. For example, one of the deals that was offered recently allowed card holders to get $10 in earned credit when they made $50 in purchases at Amazon. The $10 is added back to your card balance and you can spend it anywhere that Visa cards are accepted.

The store credits are usually in the $2 to $5 range but it’s a trade-off since there’s no set limit on how much you have to spend to get it. Using another recent deal as an example, Chime users could get $5 in store credit from Old Navy just for making a purchase. The credit is applied automatically so you don’t have to deal with the hassle of trying to track down a coupon or find a promo code.

One of the upsides of the card is that you can use it to save money on gift card purchases for other retailers. So for example, if the daily deal is $5 back on a $5 purchase at Amazon, you can use Chime to buy gift cards that you can give to other people or keep for yourself. If you keep your purchase within the $5 limit, that’s basically like getting an Amazon gift card for nothing since the cash is credited back to the card anyway.

On the flipside, one potential drawback you have to contend with is the fact that promotions expire pretty quickly and you’re limited as to how often you can redeem them. The deals that show up on your card are also limited to the merchants that are in your local area so if you live in a smaller town and you’re trying to score a discount for a big-name retailer, you might be out of luck.

Weighing the rewards against the cost

While the rewards are nothing sneeze at, the place where you might run into trouble with the Chime card is the fees. Compared to Bluebird, which has just one fee for making ATM withdrawals out-of-network, there’s a whole host of little charges to contend with.

Chime charges you $2.50 each time you take out money at the ATM and just checking your balance at the ATM is another $0.50 per transaction. If you make a withdrawal in a foreign country, the fee is $2.50 plus 3% of the total transaction. It’ll cost you $25 to get a replacement card express delivered to you if you lose yours.

The one fee you really have to watch out for is the one that applies when you stop using your card for awhile. If you don’t buy something with your Chime card for 180 days, a $5 maintenance fee automatically kicks in. If you’re only getting the card for occasional use, that $5 can easily cancel out anything you’re saving by using it.

Where Bluebird has the edge

Even though Bluebird doesn’t offer the extra perks of Chime’s reward structure, it also doesn’t carry any of the extra baggage in terms of the fees. Not only that, but it’s designed to function like a debit card with some of the features that American Express credit card users enjoy. That means you can pay your bills with the card, create a “SetAside” account to save for future purchases and write checks to cover certain expenses but you’ve also got built-in purchase protection, roadside assistance and access to discounts on entertainment events.

Bluebird also lets you track your spending, which is great if you don’t like the hassle of balancing a checkbook or you don’t use a finance app like Mint. You can add checks using mobile deposit or direct deposit and easily transfer money to and from your regular bank account. All of your account activity can be monitored using the mobile app, which takes the guesswork out of keeping tabs on your balance. The Chime app does some of the same things but it’s primarily meant to be used for tracking down deals in your area.

Final verdict

If you’re just out to get some rewards but you don’t want to worry about running up debt on a credit card, the Chime card is worth considering. Faithful Bluebird users, on the other hand, probably won’t be so quick to abandon ship based on how the features and fees stack up. In the end, Chime seems like more of a great companion card for deal seekers who already go the prepaid route, rather than one you’d want to use by itself.

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  • sherrie

    I have a chime card. First we didn’t get off on a great start but when something went wrong at my local bank I switched my direct deposits to my chime card and I was so happy because my money posted a day earlier I have a lot of prepaid cards but this one was the only one in my purse that day and im happy I made the choice…I even tease my coworkers and now they want to sign up.

    • Simon Zhen

      I’m very interested in how well the rewards are working for the cardholders. Do you find that you’re actually taking advantage of the spending offers? Also, do you find that these incentives are actually tempting you to spend more than you normally would?