The Best Pre-Paid Credit Cards & Who Should Use Them

the best prepaid credit card

As someone who chooses not to use credit cards (even though there are some good rewards programs) I am always interested to find creative ways to get by in a world that is so heavily entrenched in credit card commerce. I think garage sales are about the only place you can still go and not have an option to use a credit card. ;)

While I have long been a debit card user (especially since I found a cash-back debit card) I have been intrigued by the idea of ┬áprepaid credit cards. The idea is pretty simple – it is basically just like a Visa gift card that you can swipe to make purchases, with a few additional features/downsides.

After doing some investigating you find that prepaid credit cards actually can be very expensive to use. Many charge fees for activation, ATM withdrawals, purchases, inactivity, monthly service charges, etc.

the best prepaid credit cardAccording to an article in the NY Times about prepaid debit cards they can end up costing the average user $20-$30/month in fees. So they are definitely not cheap. Clearly, getting a free checking account with a debit card (Perkstreet Financial is my fav) is a much better option.

What if you can’t get a checking account?

But for people who can not get approved to open a checking account, a prepaid credit card is another option. They are far from a perfect solution since they are generally pretty expensive to use. A possibly cheaper option would be to use a cash-only system and get a savings account at a local credit union. Explaining your situation to the banker and trying to establish goodwill by regularly depositing into a savings account will help give them more reason to allow you to open a checking account.

The challenge is while a cash-only system works for a lot of things, it is very inconvenient and expensive as well. Paying the monthly bills, for example, requires that you drive to pay the biller directly or purchase money orders and mail them. For this reason, the prepaid credit cards that offer free online bill-pay could make life a lot easier.

Many of the prepaid cards also offer a direct deposit option allowing customers to deposit their paychecks each pay period.┬áSo while they are an expensive option, the case could be argued that if you can’t get a checking account, they might be worth it for some customers.

Apply for a prepaid credit card

If you fall into that category and think a prepaid card might work well for your situation, below are a few options. I did some digging and found some of the better prepaid credit cards out there today. Like I mentioned above they all have some kind of fees, so visit the website, read the fine print, and know the rules of your card before you decide to apply for the card.

Below are some of the best prepaid credit cards I found…


Are you a prepaid credit card user?

Have you used a prepaid card in the past or currently? If so, what did you like or not like about it? Got any suggestions for those shopping around?

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7 Comments
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  1. Great piece. I am leery of using my card for purchases on the web, but I would miss out on some great buys if I didn’t. My solution was to get a Walmart Money Card, which is affiliated with GreenDot.

    It has some drawbacks though. It’s $3 a month plus $3 per each time you add funds to it at the Walmart service counter.

    On the plus side, if someone were to gain access to the account, only a modest sum is usually at stake. Also it is convenient to add funds considering there is as Walmart in most major cities.

    It seems some of the cards you mentioned could perhaps be a better value. Again, thanks for the great article!

  2. A prepaid card that I have used with great success that doesn’t charge any fees (at least not that I’m aware of) is the Neteller – Net+ credit card. It has been useful for me in keeping myself and my family on budget as I know the exact amount that is available to me to spend and I also know that when its gone … its gone. It doesn’t give me any points or other benefits but for what it does, it does it well.

    • @Glass
      Thanks for sharing, I checked it out – it looks like the only fee they have is $6 per ATM withdrawal. That is pretty steep, but if you aren’t using an ATM, it looks pretty good!

  3. Besides comparing fees between various prepaid cards, consumers should also look at what add-on services are available.
    The UPside Visa card comes with the ability to write a free paper check per month (e.g. for payting rent) and a direct mobile airtime refill service, for people who also have a prepaid phone. It also has the option of a companion card for a loved one and has a reward program offering cash back points.
    The RushCard has a discount prespcription drugs card.

  4. Prepaid credit cards do not charge finance fees. Prepaid cards helps you avoid debt by paying for purchases beforehand.These cards can be used anywhere Visa or MasterCard are accepted. By comparing terms and conditions you can chose best prepaid credit card.

  5. I use the 1-2-3 rewards prepaid card from kingsoopers(citymarket). It is $3 to load any amount, $3 for inactivaty, and there are charges for atm(i have never used so I dont know the charge amount). It does work as the grocery card, point for gas and $5 for 1000 points for groceries. Regular discounts for marked items in the grocery store(kingsooper/citymarket).
    There s direct deposit option.
    I have been using card to pay bills and keep track of spending, also so no one has my bank account info.

    Brenda

  6. You should check out the new AmEx’s prepaid card! I would like to read your review, I think the card has some potential to be at your best prepaid cards list.

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