For people who can’t qualify for a credit or debit card — or simply don’t want one — prepaid debit cards can be an effective alternative.
Prepaid debit cards make it easy to control your spending and avoid costly overdraft fees because you can spend only what you load onto the card. Some are even coupled with a high-yield savings account, making saving for the future more lucrative.
However, other prepaid debit cards come with a bunch of fees, so it’s important to compare the best ones to maximize your savings.
Why you should consider a prepaid debit card
Prepaid debit cards differ from credit and debit cards in that they’re reloadable — whatever money you add is the amount you’re able to spend. Also, they’re not tied to a credit line or checking account, so you don’t need to worry about paying interest or overdraft fees.
A prepaid debit card can be a great budgeting tool because once the balance is gone, it’s gone. You can add a certain amount of money to the card each week or month and easily hold yourself to spending only that amount.
Plus, since there’s no credit line, prepaid debit cards don’t require a credit check.
At a glance: The best prepaid debit cards
Here’s a quick summary of the best prepaid debit cards. Read on to learn more about each card and its features, benefits, and drawbacks.
Bluebird by American Express
If you’re fee-averse, the Bluebird by American Express is about as good as it gets.
You won’t be charged a fee for any of the following:
- Monthly maintenance
- Online account opening (you might be charged up to $5 to open an account at a retail location)
- Direct deposit
- Cash reload at Walmart (other retail locations might charge up to $3.95 per reload)
- Online reload with a debit card
- Mobile check deposit (takes 10 days for the money to be available)
- Withdrawal at MoneyPass ATMs (25,000-plus ATMs nationwide)
- Bill pay
- Stop payment
- Sending money to other Bluebird accounts
- Foreign exchange
- Replacement card
If you share your finances with a significant other or have a family, the Bluebird’s family accounts make it easy to manage your money together:
- You can have up to four cards total (including yours).
- Cardholders can fund cards online or with the Bluebird mobile app.
- You can set daily spending limits, create alerts, and turn ATM access on or off for each card.
With the Bluebird, you’ll get several benefits that aren’t common among prepaid debit cards, including:
- Purchase protection: in case an item you purchase is damaged or stolen
- Fraud protection: in case your card is lost or stolen
- Amex Offers: discounts and cash-back offers at restaurants and retailers
- Roadside assistance hotline: a tow truck or locksmith in case of an emergency on the road
- Access to advance ticket sales: tickets to concerts, sporting events, and other entertainment before the masses
Can’t reload via your checking account
The Bluebird offers a few free ways to add money to your account, but a checking account isn’t one of them.
If you have a checking account but no debit card, your only fee-free options to add money are direct deposit and cash reloads at Walmart.
American Express isn’t as widely accepted as Visa or Mastercard in the U.S. or internationally. Be sure to keep cash on hand in case a small retailer won’t accept your card as a form of payment.
Mango Visa Prepaid Card
As of July 2017, the average annual percentage yield (APY) for savings accounts in the U.S. is a measly 0.06%. With the best online savings accounts, you can get up to 1.10% APY, but even that number pales in comparison to what the Mango Visa Prepaid Card offers.
High savings APY
With Mango, you can get up to 6.00% APY on balances up to $5,000. So you could earn $300 per year with a $5,000 balance, compared to $3 per year with the average savings account.
The only caveat is that you must have a net direct deposit of $800 or more each month and a minimum balance of $1 at the end of the month. Mango defines net direct deposits as direct deposit transfers into your account minus transfers out.
You’ll earn 2.00% APY on balances up to $5,000 if you don’t meet the requirements. If your balance is more than $5,000, you’ll earn 0.10% APY on the portion of the balance over $5,000.
Although Mango doesn’t offer subaccounts, you can invite your significant other to join Mango and get a $10 referral bonus. They must enroll, activate the card, and receive a recurring direct deposit of at least $50 for you to get the bonus.
You also can refer family and friends; there’s no limit to how many referral bonuses you can receive.
You’ll pay a $3 monthly maintenance fee with the card. Other fees include:
- $2 fee every time you withdraw money from an ATM
- $1 fee for ATM balance inquiries
- 2 percent currency conversion fee when you use your card abroad
For cash reloads, you’ll pay up to $4.95 per transaction, depending on which retailer you use. Participating retailers include Walmart, 7-Eleven, Walgreens, Rite Aid, CVS, Kmart, and more.
If you plan to use the Mango savings account, the interest you earn could easily make up for the fees. You also won’t pay a fee for the following activities:
- Signing up
- Transferring money to another Mango card
- Bank transfer load
- Direct deposit
- PayPal transfer load
Some key features are missing
The Mango card doesn’t offer bill pay or mobile check deposits. You also can’t add multiple cards per account to share with family.
The card’s savings component is unbeatable, but if you’re looking for a prepaid debit card that offers the whole kit and caboodle, this one isn’t it.
No zero-liability fraud protection
Mango shares tips on its website to avoid fraud, but it won’t give you full protection from fraudulent purchases.
If fraud does occur, you can submit a dispute with Mango, which can take 45 to 90 days to resolve. But ultimately, there’s no guarantee you’ll get the money back.
American Express Serve Cash Back
The American Express Serve Cash Back is a rare prepaid debit card in that it offers rewards on purchases. Depending on how much you spend, you could easily make up for some, if not all, of the card’s fees.
The Serve Cash Back card offers unlimited 1 percent cash back on all purchases. The amount you earn gets added to your prepaid debit card account, and you can use it for future purchases.
Let’s say you spend $1,500 per month with your prepaid debit card. You’ll earn $15 per month in rewards — or $180 per year. Even among debit cards that offer rewards, you won’t get that kind of return.
Note that ATM withdrawals, fees, and bill pay transactions aren’t considered purchases and don’t earn cash back.
If you want to add children or a significant other to your account, the Serve Cash Back allows you to do so. Keep in mind, though, that purchases on a subaccount don’t earn cash back.
Like the Bluebird, the Serve Cash Back offers fraud protection if your card is lost or stolen. You’ll also get purchase protection in case an item you purchase is lost or damaged. For ATM withdrawals, you’ll get access to more than 24,000 ATMs fee-free through the MoneyPass network.
Although the card offers 1 percent cash back on every purchase, you’ll have to spend at least $595 per month to make up for the card’s monthly fee of $5.95. You’ll also pay up to $3.95 per cash reload, regardless of where you do it.
There are no fees for the following:
- Signing up online (up to $3.95 through a retailer)
- Direct deposit
- Bank transfer reload
- Bill pay
- Sending and receiving money between Serve accounts
- Adding a subaccount
- Card replacement
Like the Bluebird, the Serve Cash Back is issued by American Express. Because some small businesses might not accept American Express, keep a bit of cash in your wallet.
Should you choose a prepaid debit card?
Prepaid debit cards are a perfect choice if you have trouble with overspending or want help sticking to your budget. They’re also a nice alternative to credit and debit cards if you can’t qualify for either.
But if you’re looking to build credit, a prepaid debit card isn’t for you. Since there’s no credit line involved, prepaid debit cards don’t help build credit. If that’s what you’re looking for, consider a secured credit card instead.
As you compare the best prepaid debit cards, focus on the features that matter most to you. For example, if you spend a lot, you’ll likely earn enough rewards with the Serve Cash Back to more than make up for its fees.
If you’re more interested in avoiding fees, though, the Bluebird might be a better choice. The good news is that applying for prepaid debit cards doesn’t affect your credit or ChexSystems record.
Banks report checking and savings account activity to ChexSystems, and having several bank accounts on your record can raise red flags. So if one prepaid debit card doesn’t work out for you, there’s no harm in switching to another.
To avoid the extra work, though, make an effort to get the right card the first time.
Interested in refinancing student loans?Here are the top 6 lenders of 2018!
|Lender||Variable APR||Eligible Degrees|
|Check out the testimonials and our in-depth reviews!
1 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 6.97% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 6.30% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of Month/Day/Year, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 08/21/18. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at email@example.com, or call 888-601-2801 for more information on ourstudent loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
2 Important Disclosures for Laurel Road.
Laurel Road Disclosures
APR stands for “Annual Percentage Rate.” Rates listed include a 0.25% EFT discount, for automatic payments made from a checking or savings account. Interest rates as of 11/8/2018. Rates subject to change.
Variable rate options consist of a range from 3.27% per year to 6.09% per year for a 5-year term, 4.64% per year to 6.14% per year for a 7-year term, 4.69% per year to 6.19% per year for a 10-year term, 4.94% per year to 6.44% per year for a 15-year term, or 5.19% per year to 6.69% per year for a 20-year term, with no origination fees. APR is subject to increase after consummation. The variable interest rate will change on the first day of every month (“Change Date”) if the Current Index changes. The variable interest rates are based on a Current Index, which is the 1-month London Interbank Offered Rate (LIBOR) (currency in US dollars), as published on The Wall Street Journal’s website. The variable interest rates and Annual Percentage Rate (APR) will increase or decrease when the 1-month LIBOR index changes. The variable interest rates are calculated by adding a margin ranging from 0.98% to 3.80% for the 5-year term loan, 2.35% to 3.85% for the 7-year term loan, 2.40% to 3.90% for the 10-year term loan, 2.65% to 4.15% for the 15-year term loan, and 2.90% to 4.40% for the 20-year term loan, respectively, to the 1-month LIBOR index published on the 25th day of each month immediately preceding each “Change Date,” as defined above, rounded to two decimal places, with no origination fees. If the 25th day of the month is not a business day or is a US federal holiday, the reference date will be the most recent date preceding the 25th day of the month that is a business day. The monthly payment for a sample $10,000 loan at a range of 3.27% per year to 6.09% per year for a 5-year term would be from $180.89 to $193.75. The monthly payment for a sample $10,000 loan at a range of 4.64% per year to 6.14% per year for a 7-year term would be from $139.65 to $146.76. The monthly payment for a sample $10,000 loan at a range of 4.69% per year to 6.19% per year for a 10-year term would be from $104.56 to $111.98. The monthly payment for a sample $10,000 loan at a range of 4.94% per year to 6.44% per year for a 15-year term would be from $78.77 to $86.78. The monthly payment for a sample $10,000 loan at a range of 5.19% per year to 6.69% per year for a 20-year term would be from $67.05 to $75.68.
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
3 Important Disclosures for SoFi.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown.
All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 2.28% effective October 10, 2018.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.47% – 6.99%3||Undergrad & Graduate|
|2.47% – 6.30%1||Undergrad & Graduate|
|2.51% – 8.09%4||Undergrad & Graduate|
|3.02% – 6.44%2||Undergrad & Graduate|
|2.69% – 7.21%5||Undergrad & Graduate|
|2.79% – 8.39%6||Undergrad & Graduate|