How to Compare Prepaid Credit Cards
If you're looking for the benefits of a credit card, but don't want to overspend, a prepaid card may be for you. Prepaid cards, however, come with a variety of different policies, charges, and advantages. While this can be confusing to navigate, you can figure out the best card for you with a little research. When deciding on a prepaid card, review policies carefully and choose a card with minimal fees that offers many perks. You can review a card's policy online and look for websites with databases of prepaid cards, such as Bankrate, to compare prices and benefits.
Comparing the Fees
Look for low monthly maintenance fees.Most prepaid cards charge what is called a monthly maintenance fee. The best prepaid cards offer the lowest fees. Fees between and are generally on the cheaper side. Avoid cards with large monthly fees. Some cards charge nearly simply for a maintenance fee.
- American Express cards, such as Bluebird and American Express Serve, tend to have lower maintenance fees. They're typically around a dollar or less.
- Green Dot and Chase Liquid cards have higher fees, often over a month. Visa's gold prepaid card charges almost a month for a maintenance fee.
Seek cards without an activation fee.Some cards charge money simply for activating your card and may also charge for reloading it. It can be frustrating to put money into an account, only to have it taken out immediately. Ideally, find a card that does not charge an activation fee.
- If you find a card that otherwise meets your needs, but has an activation fee, it may be worth paying if it's on the lower side. Card activation fees may only be a little over a dollar, but be careful of cards with an activation fee that's or more. Visa's prepaid rush chard, for example, can charge over for activation.
Review ATM withdrawal fees.Unfortunately, most prepaid cards have withdrawal fees for ATMs not associated with certain banks. Some cards have withdrawal fees for any ATMs. However, with a little diligence, you should be able to find cards that offer no ATM fees. BB&T money account cards, Chase Liquid cards, and Comerica Bank Independence Prepaid Card all have no ATM fees.
- ATM fees often look small, but they can add up fast if you're withdrawing money multiple times a month. Also, if ATM fees are coupled with maintenance and activation fees, the money you put in your card will dwindle fast.
Watch out for fees for PIN/signature transactions.As many retail outlets expect you to enter your PIN or sign after a purchase, avoid prepaid cards that charge a fee for this. PIN/signature fees will eat up your money fast and inconvenience you greatly each time you use the card.
Evaluating the Benefits
Review customer service policies.Problems do arise with prepaid credit cards, even quality ones. Look for companies that provide 24/7 customer service. In the event you have a question, or if your card was stolen or lost, you can deal with this right away.
Make sure cards are insured.Cards get stolen and lost on occasion. A lot of prepaid credit cards forego insurance, which puts you at risk of financial loss. Make sure your prepaid card offers FDIC insurance as a benefit.
Look for mostly unlimited ATM access.It may take some searching to find, but many prepaid cards offer unlimited ATM access. This means you would be able to withdrawal funds from any ATM without a fee. This can save a lot of money and help you avoid the hassle of finding ATMs that do not have fees.
- If you can't find unlimited access, look for cards that offer a larger number of fee free ATMs. Compare different cards to find the best deal. Mango Visa Prepaid always charges an ATM fee, for example, while there are 45,000 ATMs in network for Fifth Third Access Reloadable card.
See if you can open a savings sub account.A savings sub account can be used to transfer some of your prepaid funds into a savings account. This can help you better manage your money.
- Bluebird by American Express, for example, lets you open a savings account.
Find a card that lets you write checks.Writing checks can come in handy if you need to pay by check on the spot. Some prepaid cards come with the perks of allowing you to write checks. If you frequently write checks, opt for a card where check writing is a benefit.
- American Express Bluebird, for examples, provides check writing as a benefit.
- If you don't frequently write checks, however, you may not need a credit card that provides this perk.
Avoiding Red Flags
Make sure cards have policies regarding theft and loss.Cards do get lost and stolen, so review a company's policy regarding procedure in case this happens. If a company does not provide transparent policies regarding losing your card, do not work with that company. This could lead to financial troubles down the road.
Watch out for inactivity fees.You don't always need to be using your prepaid card. Some companies charge what is called an "inactivity fee," which essentially means you pay money for not spending money. This can slowly diminish the funds in your prepaid card over time, so avoid cards with inactivity fees.
- Companies who charge inactivity fees also frequently charge deactivation fees. You should be able to deactivate your card at any time without penalty, so watch out for deactivation fees as well.
Check to see if there are overdraft fees.Check terms and conditions regarding overdrawing your account. If a card has a lot of unexpected fees, it's easier to overdraw your account. Make sure there is overdraft protection and that you're not charged large fees for even small overdrafts.
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