Prepaid Debit Cards

Prepaid Debit Cards

Prepaid debit cards are similar to both ATM debit cards and regular credit cards, yet offer a different kind of card that is especially helpful to those with bad credit. Prepaid credit cards are also helpful to parents wanting to give their kids a credit card with “training wheels” to teach them how to handle credit card debt. Most prepaid debit cards are available to anyone, even if they do not have a bank account or credit history. The credit limit extended to you is based on how much money you deposit into the account ahead of time – or how much you “prepay” the card.

Prepaid debit cards work by the cardholder prepaying an amount of cash into their card account. Then they can use the card the same way that they would use a debit or credit card, and can make withdrawals or purchases against the cash balance in the account. If you use up your cash then the card limit runs out – and at that time you can recharge or resupply your card by making another cash deposit.

Check the details of each prepaid debit card, because they all charge various fees and apply different rules. Some companies limit the number of transactions you can make without paying a fee, while others charge fees on every transaction – including when you deposit money to your account. They may have application fees that are not refundable, customer service fees, ATM fees, and money transfer or wire fees. Most prepaid card companies require that you make a minimum deposit amount – which could range from $50 to $300, depending on the prepaid debit card that you sign up for. Many also offer helpful cash management and bill paying tools through convenient online account access which can assist with establishing an improved credit history.

The best prepaid card will generally be the one that offers good prepaid card features but without lots of miscellaneous fees and charges. Study the FAQ section of the prepaid card’s website or look for the terms and conditions page – which companies sometimes sneakily hide or bury where you have to look long and hard to find it. There you’ll see their fee schedule. Compare the charges levied by the most attractive prepaid cards you are considering, including monthly maintenance fees, transaction fees, and account set-up costs. The best prepaid card will be the one that charges you the least money to use, based on your individual spending habits and purchase patterns.