Prepaid credit cards come with a number of advantages. Most
importantly, they connect you to the banking system even if you don’t qualify
for a traditional checking account. They can also save you time and potentially
money if you receive checks but have to go somewhere and pay fees to cash them
You can avoid constantly using cash with a prepaid card,
even receiving some protections on the funds in your account in some cases.
Plus, you can use your card for online shopping and other places that may not
even accept cash payments anymore. Many prepaid cards even offer online
accounts and mobile apps, making it easier than ever to manage your money
without worrying about getting a bank account.
While prepaid cards come with many advantages, there are
also several disadvantages. The most important thing to look out for are fees.
You’ll usually need to pay a monthly fee to keep your card active. You may also
be required to pay each time you reload your card with funds. Some companies
also charge each time you actually use the card.
If you’re not careful, prepaid card fees can quickly add up, costing you a lot in the long run.
You probably also won’t be rebuilding your banking history
with a prepaid card. While some banks and credit unions offer “fresh start”
checking accounts for people with a history in ChexSystems, prepaid cards
usually don’t do anything to help you in the long run, besides giving you time
to wait out your negative reports.
Finally, check what kind of limitations your prepaid card
comes with. Before choosing one, find out the answers to these questions:
- How frequently can you
reload each month?
- How many transactions can
you make each month?
- Is there an ATM withdraw
That way, you’ll be prepared for the total cost of your card
without any unpleasant surprises.
Frequently Asked Questions
Are there reload limits?
Your specific card may come with limits on how much you can reload, how often you can reload, and how much cash you can withdraw from an ATM. Check your card agreement so you can manage your card well.
Can your card have a negative balance?
In most cases, your card cannot have a negative balance. If you try to make a purchase and don’t have enough money loaded to your prepaid card, the transaction will be declined. Some companies offer a $10 cushion if you qualify.
What happens if your prepaid card is stolen?
If your card is stolen, you should immediately call your provider’s customer support line. If you can access your account online or via a mobile app, you may be able to deactivate the card remotely. Before choosing a prepaid card, check to see their liability policy if a card is lost or stolen. You may be not be accountable to pay for any fraudulent transactions.
Get a Prepaid Card Today
A prepaid credit card lets you manage your money without a checking account. Sign up now!
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