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Prepaid Card

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What are prepaid cards?

Prepaid credit cards are used to access and spend money that you have loaded onto them in advance. It is used like a regular debit card, but no bank account is attached to it. You must load money onto the card before you can use it.

Who are they for?

Though they aren’t right for everyone, prepaid cards are very useful for a wide range of needs. For whatever reason, many people do not have a regular bank, have poor credit, or need to limit spending, and prepaid credit cards offer an effective alternative to traditional debit and credit cards. They are also useful as a tool to teach children and teens about spending and budgeting.

Prepaid credit cards can also be useful if you are traveling and want an easy way to access funds without carrying around a credit or debit card that may be stolen.

Anyone can get or use a prepaid credit card, and many products are available with differing terms and options, but this financial product has both pros and cons:


  • No bank account needed
  • No possibility of overdraft; you only spend money you have
  • If lost or stolen, loss is limited to what’s loaded onto the card
  • Since they are not attached to a bank account, the potential for identity theft is limited
  • You can use them almost anywhere, get cash from ATMs, or even have your paycheck deposited directly to the card
  • More accessible for people with poor credit


  • Prepaid cards typically carry a number of fees, including:
  • Activation fees
  • Loading fees
  • ATM fees
  • Monthly service fees
  • Reduced flexibility; you cannot borrow money or charge more than you have loaded
  • Restrictions on how much you can load or withdraw within a certain time period
  • Do not help you build or repair your credit

Calculator: How fast can your money grow?

Prepaid Cards vs Debit Cards

Where do I get a prepaid card?

Many prepaid cards are issued by major credit card companies, such as Visa and Amex, while others are owned by smaller companies. You can sign up online or buy cards at drug, grocery, or other stores. Depending on the card, you may need to purchase reload “packs” with cash at these same locations, but others allow you to load money online through a website or app. Be sure to read the terms of any card you consider to ensure you understand how and where you can purchase and load your prepaid card.

Fun facts:

  • A recent survey found that the average prepaid card charges nearly $300 in fees per year. With careful planning and research, though, you can still use a prepaid card for far less.
  • Prepaid cards are the fastest growing non-cash payment method in the US.
  • Recent studies state that more than $168.4 billion was loaded onto prepaid cards in 2015.
  • Some prepaid cards can be used at ATMs (does not include gift cards).



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