Prepaid debit cards have always been a controversial topic, particularly the cards that carry insanely high fees just for making everyday purchases. Suze Orman’s entry into the prepaid card business, the Approved Card, prompted heated debate about whether it represented a conflict of interest, given Orman’s following. In 2010, after the Kardashians announced their branded prepaid card, they received bad press due to the card’s predatory fees and lack of customer benefits. That card was canceled soon after it was announced. Not all prepaid cards are as bad, but fees are common. You need to evaluate each offer to determine whether a prepaid card is right for you. For parents who want to monitor and control their children’s spending, while teaching their children how to responsibly handle money management, prepaid debit cards are some of the preferred tools.
The best prepaid debit cards are cards without fees, offering rewards for everyday purchases. While credit is almost everywhere in this country, many Americans do not have a credit card or bank account. They use cash for their needs. While this might be a cheaper method of paying for products and services, it isn’t always safe to carry around cash for purchases. Rather than resort to prepaid cards with high fees consider looking at some of these best prepaid debit cards available for consumers today.
The Green Dot® Prepaid MasterCard® is a card with a simple fee plan. Cardholders will not have to pay a monthly fee as long as they deposit at least $1,000 onto the card monthly or make 30 qualifying purchases posted to your account monthly. If these conditions are not met, the monthly fee is $5.95. Online activation will cost $0. There are fees for initial purchase, which varies by retailer, of up to $4.95, reloading the card fees also vary by retailer and is currently up to $4.95. This is not a credit card you need to load your own money on the card to activate and to use.
UPside Visa Prepaid Card. The UPside Visa Prepaid Card offers three different plans depending on your lifestyle, each with a different fee structure. A card designed for teenagers, the UPside Visa Prepaid Card allows parents to load cards free of charge from a checking or savings account. The Edge Plan charges an annual fee of $29.95 however UPside Edge cardholders earn cash back on funds loaded to the card. Loading the card via direct deposit from employers is free for Edge and Access plan users. Members who choose the Clear plan, while membership fee is free, will have to pay $2.50 for each direct deposit initiated from a debit or credit card. UPside Access has a $2.99 monthly membership fee. This is not a credit card but a prepaid reloadable card.
American Express Prepaid Debit Card. If you’re looking to avoid fees with your prepaid debit card, this choice from American Express might be the best option. You can load the card from a bank account online or by phone, or you can place your deposit in the form of cash by purchasing a “MoneyPak” at over 50,000 retail locations including Walmart, CVS, 7-Eleven, and Walgreens. There is a service fee of up to $4.95 that will be added to your purchase for purchasing a MoneyPak for depositing cash. American Express does not charge reload fees made through bank accounts and direct deposit linked to the card. Cash reloads and other reload methods may carry a third party purchase or service fee. This is not a credit card, however the card comes with many of the major benefits that all American Express cardholders receive, like roadside assistance, purchase protection, and entertainment access. This is not a credit card you need to load your own money on the card to activate and to use.
Vision Premier® Visa® Prepaid Card – Simple & Fair. The Vision Premier® Visa® Prepaid Card – Simple & Fair has only three fees in their portfolio based on whether you have direct deposit. And every other service they provide is free with no disclaimers, tiers, or restrictions for cardholders. The three fees with direct deposit are a $9.95 activation fee, $7.95 monthly fee, and a $2.50 ATM fee. The three fees without direct deposit are a $9.95 activation fee, $9.95 monthly fee, and a $2.50 ATM fee and free customer service for the first thirty days and $1.95 per call thereafter. This is not a credit card you need to load your own money on the card to activate and to use.
READYdebit® Platinum Visa® Prepaid Card. The READYdebit® Platinum Visa® Prepaid Card includes free direct deposit of your paycheck, free online bill pay and a bevy of other services, free of charge. There are two main fees associated with this card, however. The first is a one-time activation fee of $9.95, and the second is a monthly maintenance fee of $14.95. The card also carries fees for ATM withdrawal and bank teller cash advance. When compared to other cards on this list, these fees can add up over a full year, but the READYdebit® Platinum Visa® Prepaid Card is still better than most prepaid cards in the market today. This is not a credit card you need to load your own money on the card to activate and to use.
As you can see, the prepaid debit card industry is mired in fees. If you believe a prepaid debit card is right for you, tread carefully, read the terms and conditions, and know the fees. Even the best prepaid debit card can end up costing more money than you are prepared to spend. There are many other debit cards I’m not including in this list at all because they are best avoided. Using a prepaid debit card can help a responsible person who does not qualify for a credit card handle their expenses, but it can also be a recipe for disaster.
Updated April 1, 2014 and originally published January 21, 2011. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.