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What to Look for in a Prepaid Debit Card


A prepaid debit card could come in handy when you’re going through debt settlement. Most of your credit cards are probably involved in the settlement process and you may have even lost access to a checking account. Life still must go on and you still probably have to make purchases. To eliminate the inconvenience of paying cash for everything or ordering a money order to pay bills, one can use a prepaid debit card.

A prepaid debit card is much like the debit card you had associated with your checking account. You make a deposit onto the card and each purchase you make takes away from your account balance. One of the main differences is that there’s no checking account associated with the card, though some prepaid debit cards do have check writing privileges. There are many prepaid debit cards on the market, so choose carefully.

Consider the Fees

Nearly all prepaid debit cards come with fees, some have more fees and higher fees than others. The goal is to probably choose a prepaid card with the fewest and lowest fees. That way less of your money goes toward fees and more of it is available for spending. Typical fees include monthly account fees, loading fees, and ATM fees. There may be a fee for speaking with a customer service representative, receiving an account statement, or if your monthly deposit is below a certain amount.

Monthly account fees probably don’t seem like much when you look at what you’re paying per month, but multiply the fee by 12 and you’ll see just how much you’re spending each year. Look for a prepaid card with a monthly fee below $5 and easily waived by loading a certain amount of money each month or by having direct deposit.

Major Payment Network

There are four major payment networks – Visa, MasterCard, American Express, and Discover. When you’re choosing a prepaid card, remember that Visa and MasterCard are accepted in more places than American Express and Discover. If your prepaid card doesn’t have any payment network, its use will likely be limited. For example, you probably won’t be able to use it to buy gas or groceries or to pay bills online.

Easy to Load Money

Before you sign up for a prepaid card, you should make sure it won’t be inconvenient to reload money onto the card. Some prepaid debit cards have a limited number of reload locations and if there’s not one located near you, adding money to your card will likely be a headache. If your job has a direct deposit option, look for a prepaid card that will let you direct deposit your funds. Some prepaid cards even waive your monthly account fee if you make at least one direct deposit each month.

Read the Terms and Conditions

Though the fine print may be confusing, you’ll likely make the best choice by understanding exactly what fees are being charged. You can also look for reviews of the prepaid cards you like best to get an idea of the fees you can expect to pay. Remember, fewer and lower fees are typically better.

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