Best Prepaid Debit Cards Of June 2024 (2024)

To create this list, Forbes Advisor analyzed 34 prepaid cards from 28 providers, including a mix of traditional brick-and-mortar banks, online banks, credit unions and fintech companies. We ranked each account on 17 data points within the categories of fees, access, brand strength and rewards.

The following is the weighting assigned to each category:

• Fees: 50%
• Access: 25%
• Brand strength: 15%
• Rewards: 10%

Specific characteristics taken into consideration within each category included activation fee, monthly fee, ability to waive the monthly fee, ATM fee, cash reload fee, rewards rate, ATM network, mobile check deposit fee, physical locations and app store ratings.

Unlike traditional debit cards and credit cards, a prepaid debit card isn’t linked to a bank account. Instead, it functions like a gift card because you can only spend the money already loaded onto it.

Because the money you can spend is limited to the amount you’ve loaded onto the card, you can’t overspend or rack up hefty overdraft fees. This control over your finances helps you manage your spending and offers you peace of mind.

Prepaid debit cards are issued by banks and usually have a Visa, Mastercard, Discover or American Express logo on them. You can use these cards at any online or physical location that accepts debit cards.

How Do Prepaid Debit Cards Work?

Before using a prepaid debit card, you must top it up with funds. There are several ways to do so. Depending on your card issuer, you could add money by:

• Transferring money from your checking account or another prepaid card
• Directly depositing your paycheck onto the card
• Loading physical cash onto the card at approved retailers or the financial institution that provided the card
• Purchasing a “reload pack” to add a specific amount to the card

Once you add money to the card, you can use it anywhere a typical debit card is accepted. Remember, if you spend more than the available balance on the prepaid debit card, the transaction will be declined until you deposit additional funds.

The primary difference between a regular debit card and a prepaid debit card is that the former is linked to a bank account while the latter isn’t. You have to load money onto a prepaid debit card—or “prepay”—before you make a purchase. When you use the card, you’re spending that money—much like how a gift card works. With a debit card, you’re spending money that’s in your bank account.

You can’t spend more than what you’ve loaded onto a prepaid debit card. Some debit cards will let you overdraft your account, but you could incur hefty overdraft fees. However, prepaid cards are more likely to have monthly fees and purchase fees.

Generally, you have to apply for a bank account to get a debit card. Many financial institutions will look at your ChexSystems report, which details your banking history, and they may deny your application if you have negative marks. Prepaid debit cards typically have no application process and don’t consider your banking history.

Before applying for a prepaid debit card, understand the advantages and drawbacks of using this kind of payment method.

Pros

• Prevents overspending and overdraft fees
• No credit or ChexSystems check
• Convenient to reload
• More secure than carrying cash

Cons

• Doesn’t help build credit
• Fees can be excessive
• Money stored on prepaid debit cards does not accrue interest

Elizabeth Aldrich, deputy editor at Forbes Advisor says:

“Nearly everyone is eligible for a prepaid debit card since there’s no credit check involved in opening one. You don’t even need a bank account. All you need to sign up for the card of your choice is basic information like your name, address and Social Security number. Once you’re registered, you can add funds and start using it.

You do need to be 18 years old to qualify for most prepaid debit cards.”

With so many prepaid debit card options, choosing the right one can be overwhelming. You can weed out the bad apples and narrow down your choices by doing the following.

• Consider the fees. First, consider the costs associated with each prepaid debit card—such as monthly maintenance, ATM, foreign transaction and cash reload fees. If you’re not careful, these charges can quickly add up and eat into your spending money.
• Compare features and benefits. Look into the benefits each card offers. Some cards provide liability protection, cashback rewards and other spending and safety perks.
• Read the fine print. Once you have an idea of what works best for your needs and lifestyle, read the terms and conditions of each card before making your decision. Look at rules about transferring funds, reload and spending limits and deposit options.

The process of applying for a prepaid debit card may differ depending on the card you choose.

• In-store. Major retailers like Walmart often allow you to purchase and load money onto a new prepaid debit card right in the store. However, before you can use the card, the retailer may ask for your personal information—such as your name, phone number and date of birth—to verify your identity.
• Online. Many prepaid cards, like the Regions Now card, provide streamlined online applications to help you sign up for a new card in minutes. You’ll typically need to provide basic personal information, including your Social Security number and physical address, to complete the application.
• At a branch. Banks like Truist and Chase offer prepaid debit cards you can apply for at your local branch. Speak with a bank representative to learn how to apply.

While prepaid debit cards come with many perks, they’re not the most suitable option for everyone. Consider these alternatives that may be a better fit.

• Traditional debit cards. Besides cash and money orders, traditional debit cards are perhaps the safest and most convenient alternative to prepaid cards. They also tend to come with fewer fees, especially if you opt for a no-fee checking account. However, you’ll have to apply for a checking account to get a traditional debit card. This process is easy, but you might not be approved if you have negative marks on your banking history.
• Second chance checking accounts. If you have multiple negative items in your ChexSystems report, which keeps track of past banking activities, you may have trouble getting approved for a regular bank account and debit card. Second chance checking accounts don’t check your ChexSystems report and come with traditional debit cards.
• Secured credit cards. Unlike regular credit cards, secured credit cards require an upfront deposit, which often serves as your credit limit. Despite this initial cost, they can be an excellent tool for building credit since you can typically qualify even if you have no credit or a poor credit history. Plus, unlike prepaid debit cards, most secured credit cards can help you improve your credit because issuers report activity to the credit bureaus.
• Becoming an authorized user. If you’re limited to prepaid debit cards because of your credit score, get your credit back on track by becoming an authorized user on a credit account that belongs to your spouse or a family member. As an authorized user, you’ll share a line of credit with the owner and get your own card for spending. This way, you can lean on that person’s good credit to establish your own.

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