If you can’t get a checking account or a credit card, a prepaid debit card might be an option for you. These cards are easy to get because there isn’t a credit check. Your credit history doesn’t matter with a prepaid debit card because you’re not buying items on credit. You’re using your own money for purchases.
Here’s how it works: You purchase a prepaid debit card online or at a retailer. Then you load cash onto the card and use the balance for purchases.
Prepaid debit cards are fine to use as a checking account replacement or as a budgeting tool. But just remember that these cards do not build credit.
If you decide to get a prepaid debit card, read the fine print several times. Some prepaid debit cards have lots of fees, including monthly fees, ATM withdrawal fees, loading fees, balance inquiry fees, transaction fees and even dormancy fees — also called inactivity fees — for not using your card recently.
The prepaid debit card world can get a little confusing, so I want to make it easy for you. Here are three of the best prepaid debit cards out there right now. They’re easy to use and they won’t cost you an arm and a leg.
[Read: The Best Starter Cards for Building Your Credit.]
Bluebird by American Express
I like the Bluebird card because there are very few fees. I just don’t think you should have to spend a lot of money to use your own money. And since you can get family accounts, Bluebird cards are also useful for giving your teens a little “plastic practice” by putting their allowance on the card.
Let’s take a look at the fees and features:
Card purchase fee: Free online; at retail locations it can cost up to $5.
Activation fee: None.
Monthly and annual fees: None.
Adding funds (reloading): You can use direct deposit, make an online debit card transfer, and add cash or use a debit card at Walmart and it’s free. But if you add cash at retailers other than Walmart, there could be a fee of up to $3.95.
ATM withdrawals: If you use ATMs in the MoneyPass network, there are no fees. But withdrawing funds outside of the network triggers a $2.50 ATM fee (ATM operator fees may also be applied).
Some positives: Online bill pay is free, and there are no foreign transaction fees. And if you use several Bluebird cards to give allowances to kids, you can transfer money between Bluebird accounts at no charge. You also get fraud protection, which is nice.
Some negatives: You can arrange to pick up larger amounts of cash from Walmart, but there are fees ranging from $3 to $9, depending on the cash amount you want to withdraw. And it can get expensive if you reload your card at retailers other than Walmart.
[Read: The Best Credit Cards for Bad Credit of 2018.]
Chase Liquid Card
The Chase Liquid card offers you free access to thousands of Chase ATMs and branches. You can open an account at a branch. Or, if you’re a U.S. citizen with a U.S. postal address and a Social Security number, you can apply online.
Let’s take a look at some of the fees and features:
Card purchase fee: None.
Activation fee: None.
Monthly fee: You pay $4.95 per month.
Foreign transaction fees: You pay 3 percent of the withdrawal amount after conversion to U.S. dollars.
Adding funds (reloading): You can use direct deposit for your paycheck, tax refund or government benefits. Or you can deposit cash or checks at Chase ATMs or branches. There are also options to deposit checks from your phone and to transfer funds from your checking or savings account.
ATM withdrawals: If you use Chase ATMs, there are no fees. But withdrawing funds at a non-Chase ATM carries a $2.50 fee.
Some positives: The card uses the Visa payment network, so it’s widely accepted by retailers. You can use Chase’s online bill pay for free. You can also use your Chase Mobile app to schedule payments and stay on top of your account activity. And you have zero liability for unauthorized purchases.
Some negatives: There’s the $4.95 monthly fee, and that isn’t ideal. But other than that, if you have a Chase nearby, this card is pretty inexpensive as long as you use Chase ATMs.
[Read: The Best Student Credit Cards of 2018.]
American Express Serve Free Reloads
This is one of three versions of the American Express Serve card. I like this card for consumers who don’t have access to direct deposit for their paychecks.
With some prepaid debit cards, loading the card at retailers can cost up $3.95 for each transaction. With the American Express Serve Free Reloads prepaid card, you pay zero for cash reloads.
Here’s a look at the fees and features:
Card purchase fee: Free online; at retail locations it can cost up to $3.95.
Activation fee: None.
Monthly fees: You pay $4.95 per month.
Foreign transaction fees: You pay 2.7 percent after conversion to U.S. dollars.
Adding funds (reloading): You pay zero for cash reloads at more than 45,000 locations, including Rite Aid, Walmart, CVS, participating 7-Elevens and Family Dollar. You can also add money from a bank account and use direct deposit.
ATM withdrawals: If you use ATMs in the MoneyPass network, there are no fees. But withdrawing funds from a non-MoneyPass ATM comes with a $2.50 ATM fee (plus any ATM operator fees that apply).
Some positives: You get free online bill pay. And you can send and receive money with others who have Serve cards at no charge. You also get fraud protection.
Some negatives: The monthly fee isn’t great, but if you plan to reload with cash, you’ll save money with this card. For depositing checks, you can use Mobile Check Capture, but it can take up to 10 days. There’s an option called Money in Minutes, but there are fees. You pay a 1 percent fee on government or payroll checks with preprinted signatures or a 5 percent fee on other checks. But there’s a $5 minimum in any case.
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Best Prepaid Debit Cards originally appeared on usnews.com
