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How Do Prepaid Debit Cards work and are they right For You? Advertiser disclosure You’re our first priority. Everytime. We believe everyone should be able to make sound financial decisions without hesitation. And while our site does not feature every business or financial product available on the market however, we’re confident of the advice we offer, the information we provide as well as the tools we design are objective, independent simple, and completely free. How do we make money? Our partners pay us. This can influence the products we review and write about (and the places they are featured on our site) however it does not affect our suggestions or recommendations that are based on thousands of hours of research. Our partners are not able to pay us to guarantee favorable reviews of their products or services. . How do prepaid debit cards Function and Are They the Right Choice for you? You can load money up ahead onto the debit card that is prepaid, and then utilize it at ATMs, or to make purchases. It is possible to reload the card in multiple ways. by Spencer Tierney Senior Writer | Certificates of deposit and ethical banking, as well as banking deposit accounts Spencer Tierney is a consumer writer for banking at NerdWallet. He has covered finances for individuals since the year 2013, with a particular focus on certificates of deposit and other banking-related subjects. The work he has written for him was highlighted by The Washington Post, USA Today, The Associated Press and the Los Angeles Times, among other publications. He’s based at Berkeley, California. Mar 18, 2022 Edited by Yuliya Goldshteyn Assistant Assigning Editor for Banking Yuliya Goldshteyn is a bank editor with NerdWallet. She was previously editor, writer, and research analyst in a variety of industries which range from health care as well as market research. She earned a bachelor’s degree in the field of history from Berkeley at the University of California, Berkeley and a master’s degree in sociology from the University of Chicago. You can reach her via

. The book was reviewed by Kathleen Burns Kingsbury Wealth psychology expert and coach Kathleen Burns Kingsbury, founder of KBK Wealth Connection and host of the Breaking Money Silence podcast, is an internationally published as a speaker and author. As an expert in financial psychology, Kathleen has appeared on television, and her work has been published by The New York Times, The Wall Street Journal, “PBS NewsHour,” Money magazine, Today Money, Forbes and CNBC. Kathleen was an adjunct faculty instructor at The McCallum Graduate School at Bentley University from 2009 until 2019. She is currently teaching for Champlain College. At NerdWallet our content is put through a rigorous . We are so confident about the accuracy and quality of our content that we have outside experts inspect our work. Many or all of the items featured on this page are made by our partners that pay us. This affects the products we write about and where and how the product appears on the page. But, it doesn’t influence our opinions. Our views are our own. Here is a list of and . A prepaid debit card is an option to replace a bank account, which allows you to spend the cash you have loaded onto the card. As with the debit card, these cards are accepted at all merchants which accepts its payment network, like Visa and Mastercard. They’re safer and easier than using cash. A lot of prepaid debit cards don’t need credit checks, which means they’re easy to get. If you’re in one of the roughly 7 million U.S. households without access to a bank account They can be an option to spend money without using a bank. This article will explain how to get the prepaid debit card you need and how they work. How can I purchase a credit card that is prepaid? It is possible to purchase an prepaid debit card at a retailer, bank or credit card company another financial services company. If you buy one, your is usually a part of an account held by a bank or credit union. Note that they can also be called stored-value cards pay-as-you-go cards or, more specifically, general-purpose reloadable prepaid cards. Are you interested in comparing prepay cards? Check out our list of Nerdy Tip If you need to establish credit or have been refused a bank account, a prepaid debit card isn’t the ideal alternative. If you aren’t able to get an ordinary checking account, you can try . These accounts give you another chance at the mainstream banking system and its benefits. Saves Cash Managed CD Checking Market savings account is where you can store money securely while earning interest. Savings accounts are an account where you can keep money safe as well as earn interest. FDIC SoFi Savings and Checking APY 3.75% FDIC SoFi Checking and Savings APY 3.75 Percent SoFi Members with direct deposit earn up to 3.75% annually-percentage return (APY) on savings balances (including Vaults) and 2.50 percent APY on checking balances. No minimum direct deposit amount that is required to be eligible for 3.75% APY for savings, and 2.50% APY for checking balances. Direct deposit members will get 1.20% APR on all balances in checking and savings (including vaults). Interest rates are variable and can change at any point. The rates listed are current as of 01/04/2023. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet Min. balance for APY: $0 Member FDIC Marcus Goldman Sachs Online Savings Bank with APY 3.50 percent 3.50% APY (annual percentage yield) with $0 minimum balance to earn the APY stated. Accounts must have a healthy balance in order to remain open. APY is valid until 02/07/2023. Min. balance for APY $0 These cash accounts offer a variety of services and features comparable to savings, checking and investment accounts into one. The cash management account is usually provided by non-bank financial institutions. They combine the features and services that are similar to savings, checking and/or investment accounts in one product. These accounts for managing cash are typically offered by non-bank financial institutions. On the website of Wealthfront, you can find Wealthfront Cash account APY 4.05% Min. amount of APY $1 on the Betterment’s website. Betterment Cash Reserve Paid Non-Client Promotion APY 4.00 percent annually percent return (variable) is at 02/06/2023. Min. balance for APY CDs is $0 (certificates of deposit) are a type of savings account that has an unchanging rate and term, and usually have higher interest rates than regular savings accounts. CDs (certificates of deposit) are a type of savings account with fixed rates and terms typically, and have higher interest rates than traditional savings accounts. CIT Bank CD APY 4.60% 1.5 years Term 1.5 Years Member FDIC Marcus by Goldman Sachs High-Yield CD APY 4.40 percent 4.40% annual percentage yield (annual percentage yield) as of 01/25/2023 . 1 year 1 year Member FDIC SoFi Checking and Savings APY 2.50% SoFi members who have direct deposit may earn up to 3.75 percent annually percentage return (APY) in savings account balances (including vaults) and 2.50% APY on checking balances. There is no minimum direct deposit amount required to qualify for the 3.75% APY on savings accounts and 2.50 percent APY on checking balances. Members without direct deposit will earn 1.20% APY on all account balances, including savings and checking (including Vaults). Rates of interest are subject to change and may change at any point. These rates are current at 01/04/2023. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet Monthly fee $0 Upgrade – Rewards Checking APY N/A Monthly fee $0 Deposits are FDIC Insured Current Account APY N/A Monthly fee $0 Deposits are FDIC Insured Chime Checking Account APY N/A Monthly fee $0 Member FDIC Axos Bank(r) Rewards Checking APY 1.25% Receive monthly direct deposits totaling $1,500 or more to earn 0.40% APY. Use your Axos Visa(r) Debit Card for a total of 10 transactions per calendar month (min three dollars per purchase) or enroll for Account Aggregation/Personal Financial Manager (PFM) in Online Banking to earn 0.30% APR. Keep an average daily balance of $2,500 in an Axos managed Portfolios Investment Account to earn 0.20% APY. Maintain an average daily amount of $2,500 within the Axos self-directed trading Investment Account for 0.20% APR. Utilize your Rewards Checking account to make your entire month’s Axos Consumer loan payment to earn 0.15 percent APY. Monthly fee: $0. Money market accounts have rates that are similar to savings accounts and have certain checking features. Money market accounts pay rates comparable to savings accounts and include certain checking features. Members FDIC UFB’s best Money Market Rate APY 4.21% Min. balance for APY $0 Member FDIC Discover Bank Money Market Account APY 3.20 Percentage Min. balance to APY $1 How prepaid debit cards work Prepaid cards differ in their functionality, however, they typically include these features fees: You may need to pay to activate or acquiring an account, or for making deposits or using ATMs that are not in network. There’s often a monthly fee however, it is sometimes waived — by having direct deposits, for instance. Some cards charge a fee for every purchase or ATM transaction. Options to reload: Customers can usually add money to a card in multiple ways, such as setting up direct deposits, adding cash to participating stores and depositing checks at ATMs. Certain cards allow you to transfer money online or make mobile check deposits from your smartphone. ATM access: Some prepay cards are connected to free nationwide ATM networks, such as MoneyPass and Allpoint, or to bank networks that are branded for banks’ cards. Amount limits: Some cards restrict how much you can pay, withdraw, or reload within a specific time frame that includes a specific day or a month. Security: Prepay cards that can be reloaded come with the liability and fraud protections required of debit cards by federal law. Certain cards provide protection against purchases, but it can be difficult to dispute transactions that were not authorized or correct errors. One safeguard many cards have are federal deposits insurance, meaning your money is protected if an issuer becomes bankrupt. Expiration dates: Prepaid cards have expiration dates. The balances on these cards should not expire, however you’ll need to get another card prior to the expiration date so you can continue using it. In a report from 2016 from the Consumer Financial Protection Bureau, several users complained about having funds on their cards after they expired, however, the issuer did not reissue cards that included those balances. If that happens to you contact the prepaid card provider to determine if the issue could be resolved. If not, you can seek help access the CFPB website. Other benefits Certain cards with prepaid offers checking, on-line bill payments as well as multiple versions of the cards for relatives. There are a few that offer rewards such as cash back on purchases, similar to the rewards credit cards can do. Consider you might need a debit card what you need? Learn more about the limitations on prepaid debit card. Prepaid debit cards have major limitations compared with banking credit and accounts. Although they usually offer online services, a lot of debit cards do not have banking services, such as the ability to withdraw cash or reload it at no cost. The money you load on a card probably won’t generate interest either. If you’re only looking to keep cash on hand for safekeeping and don’t expect to take many withdrawals then it might be best to find a high-rate savings account to store your funds. Prepaid debit cards don’t affect your credit score, and therefore will not help you build it either. Credit is not affected As they aren’t credit card, you cannot build credit using them. To do that, you’ll need to . The absence of banking facilities: Prepaid card don’t automatically have the same features that you’d expect from accounts for checking, like access to an ATM as well as branch or ATM networks. online or mobile banking, as well as bank services such as wire transfers, as well as the capability to stop payments. Past horror stories: Several prepaid cards have been affected by technology outages that last several days or even weeks. When the parent company of RushCard changed the processor for its payments into Mastercard in 2015, a technological glitch caused hundreds of thousands of customers out of their RushCard accounts for several days. The Walmart MoneyCard service went down in 2016. Netspend reached a settlement with a federal regulator over allegations that customers were prevented from accessing their accounts. Netspend also offered refunds to those who were qualified. If you want an account that doesn’t charge monthly fees, take a look at our list of . Also, there are options for those with poor credit or bank histories. Whether used as a budgeting tool or as an alternative to bank, prepaid debit cards can aid in the storage and spending of money. Prepaid debit cards are different from. debit and credit cards. Here’s a brief overview of the distinctions prepaid debit cardsPay before: You load money onto the card through cash, direct deposit, checks or a transfer from another account prior to paying for transactions. No checking account is required. Debit cards – pay immediately: You make use of the money from your checking account when making purchases or withdrawing money at an ATM. Credit cards that pay later: You borrow cash from a bank each time you use the card and pay the money back in the future. >> Ready to see the options available to you? Look through our selections of the Prepaid debit cards. If a debit card that is prepaid isn’t the right choice for you, you could choose a more suitable alternative using an account that is free of charge. Though certain checking accounts have monthly fees there are many online banks offer accounts with no annual fees or minimum balance requirements, and you can choose a different option if you’ve had problems with bank accounts prior to now. Take a look at these three accounts which include one that does not require your (ChexSystems is the agency for reporting that banks use to follow clients who have had problems with their prior bank accounts). The NerdWallet ratings are made by the editorial staff. The scoring formulas take into account many data points for every financial service and product. At Chime deposits are FDIC Insured Monthly fee of $0. Access to ATMs free of charge: Over sixty thousand ATMs. Bonus features such as no overdraft charges. No ChexSystems records check. Further information from Chime Chime says: “Cash withdrawal and third-party fees can be charged. Chime is a technology-based financial firm, not a bank. Banking services offered by debit card issued by The Bancorp Bank or Stride Bank, N.A. ; Members FDIC.” NerdWallet’s ratings are determined by our editorial team. The scoring formulas are based on several data points associated with each financial service and product. Monthly cost: $0. Free ATM access: Over 43,000 ATMs. Bonus features: Account pays interest. NerdWallet’s ratings are determined by our editorial team. The scoring formulas consider multiple data points for each financial service and product. Monthly fee: $0. Access to ATMs free of charge: Over 70k ATMs. Bonus features: Account pays interest. About the author: Spencer Tierney is an expert in the field of certificates of deposit at NerdWallet. The work of Spencer Tierney has been featured in USA Today and the Los Angeles Times. On a similar note… Get the best checking account NerdWallet’s recommendations for the top checking accounts. Go deeper into banking. Receive more money management tips – right to your inbox. Sign-up and we’ll send you Nerdy posts about the money topics which matter to you the most as well as other methods to help you get more from your money. Make the right financial moves

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