2024's Top Prepaid Credit and Debit Cards | Bankrate (2024)

Prepaid debit cards are similar to debit cards, except prepaid cards aren’t connected to banking or checking accounts. Instead, funds are loaded onto thecard — either online, in person at specific locations, by depositing checks or reloading with cash — then reloaded when those funds run out.

Think of them as a cross between gift cards and debit cards — they have a card number, CVV code and expiration date like debit and credit cards. They also don't usually impact your credit score, as prepaid card issuers typically don’t check your credit when you apply, and they won’t check your banking history (though this isn’t always the case).

However, you should keep in mind that most prepaid cards have fees associated with them, such as:

• Reload fees
• Monthly fees
• ATM withdrawal fees
• Inactivity fees
• Transaction fees

Prepaid cards are an excellent option for anyone with difficulty accessing traditional banking services, but features vary among cards. Here are some things you should keep in mind while shopping for a prepaid card.

• Take a look at the fees. One of the reasons many people have a difficult time accessing traditional banking services is because of the costs. If your prepaid card charges a litany of fees, such as ATM fees, monthly service fees or reload fees, you should consider if the card is worth it.
• Know your loading options. How difficult or easy will it be to reload your prepaid card? Are fees attached? Some prepaid cards will allow you to reload your card with ACH transfers, but you’ll often reload manually at an ATM. It’s important that you have access to several ATMs in your area.
• Make sure the card offers mobile access. Mobile banking is becoming increasingly popular, and for good reason. It’s convenient, safe and can give you peace of mind. The best prepaid cards will offer you the option to use the cards online and have access to a mobile app.
• Consider if you’re banked or underbanked.While prepaid cards function similarly, there are significantdifferences between prepaid cards and debit cards, specifically where funds are stored, which can be a significant factor for those who are unbanked or underbanked. Prepaid cards provide several benefits to people who don’t have access to traditional bank accounts (unbanked people) or whose access to banking services is inconvenient or too expensive (underbanked people). If you’ve struggled to gain access to traditional banking services because of upfront costs (such as deposit minimums or initiation fees), a prepaid card might be the answer.

You can use Bankrate's Compare Credit Cards tool to help shop for the best prepaid card with as few fees as possible.

How to maximize a prepaid card

When it comes to managing your spending and avoiding debt, a prepaid card can be valuable. With the right features and responsible usage, you can maximize the benefits of a prepaid card while staying in control of your finances.

• Set a goal

  Prepaid debit cards let you use plastic when shopping online or in stores without a traditional checking account. It’s great for scenarios like a parent or guardian giving a teenager a card to make purchases with a monthly budget or if you need to cut back on spending and want to set hard limits. Understand what you’re using a prepaid card for and how it can ultimately help you reach your financial goals.

• Research and compare cards

  Each prepaid card may come with its own set of features, fees and limitations. You can find a card that aligns with your specific needs by conducting thorough research. Look for cards with low or no activation fees, reasonable transaction fees and useful benefits tailored to your requirements.

• Set a budget

  One of the key advantages of using a prepaid card is that it allows you to set a budget and stick to it. By loading only the amount you plan to spend onto the card, you can avoid overspending and accumulating debt, so it's essential to do so with a strategic approach.

• Strategize your reloads

  Consider your spending patterns and avoid reloading large sums unnecessarily, as it might tie up your funds or expose you to additional fees. Plan your reloads effectively. Strike a balance between having enough funds and not maintaining an excessive balance on the card.

• Be aware of drawbacks

  Prepaid cards may not offer the same consumer protections as credit or debit cards in case of fraud or unauthorized transactions. It's crucial to review the terms and conditions the card issuer provides regarding liability protection and dispute resolution processes. As a precaution, make sure to set some money aside for an emergency or rainy day fund.

When evaluating the best prepaid cards, we take into account several factors, including how cards score in our proprietary card rating system and whether they offer features that fit the priorities of a diverse group of cardholders, from low fees to wide acceptance to earning rewards.

We analyzed the most popular prepaid card options and scored each card based on its fee structure, rewards rate and earnings, perks and more to determine whether it belonged in this month’s roundup.

Here are some of the key factors that we considered:

India Davis is an editor specializing in credit cards and updates. She believes in putting the reader first and carrying out a brand’s voice to its fullest potential. She has…

Courtney Mihocik is an editor at Bankrate Credit Cards and CreditCards.com specializing in credit card news and personal finance advice. Previously, she led insurance content at…