You may feel overwhelmed searching for a prepaid debit card. This is in part a result of a surge in new credit card issuers getting into the prepaid market such as the Capital One Prepaid Card. Below are the 7 key features in the best prepaid credit card offers. These factors are where many prepaid debit cards will vary from one card to another.
1. Type of Prepaid Card
Due to the massive growth in the prepaid debit card industry you can now be issued a prepaid Visa, MasterCard, or American Express card. The type of prepaid card you choose will directly impact where you can use your card.
For example, the American Express debit card is accepted at 90% of the locations a prepaid Visa card is. However you will not be able to use your American Express prepaid debit card at the remaining 10% of those retail locations.
2. Monthly Fees
The most common prepaid card fee, is a monthly maintenance fee. This fee can range anywhere from as low as $3 up to $19.95 per month. You should not pay anything more than $9.95 per month.
There are many prepaid cards that provide a much lower monthly fee. It is possible to get a prepaid card without paying any monthly fees. However this typically comes with stipulations such as, depositing a minimum amount of money on your account every month.
3. Activation Fee or Purchase Fee
If you get a prepaid card at a retail location you are going to be required to purchase the card. This will typically cost you between $2.95 to $4.95. The best prepaid cards will give you free activation and a free prepaid card.
It is important to read the fine print to make sure that you are not charged a fee once you activate your card. Even if you are able to apply online for free. For example, the Suze Orman Approved Card will charge you $3 once you activate your prepaid card. Instead, you should not be required to pay any money to buy a your card or activate your account.
4. ATM Fees
As the prepaid credit card industry has increased in competitiveness there are some cards that will provide you with free ATM access. The most common of these are using the All Point ATM networks. This is going to include free access to over 30,000 ATM’s located all across the country.
This is a nice, new feature that we have seen a few of the top prepaid debit cards provide their cardholders. Occasionally this free ATM access will be on a condition that you are using direct deposit on your prepaid debit card.
5. Methods To Deposit Money
It is standard for prepaid debit cards to provide you with free direct deposit. However you should also look for a variety of other methods to load money on your account. Some of the best prepaid cards give you a way to deposit money using PayPal.
Additionally they give you the option to visit Western Union or Money Gram to deposit money. And you can purchase a Green Dot Money Pack along with other common reload packs available at retail locations.
6. Hidden Fees
It is vital that you check the fine print of any prepaid card before you apply. It is more common in the past but still happens today where prepaid debit cards will be less than upfront with some of their fee schedules. For example, some prepaid cards will charge you a fee just to speak with a live customer service representative.
This unfortunately is a relatively common fee. Please make sure that you have free access to customer service, especially with a company that is holding your money.
7. Free Bill Pay
We have started to see a bill payment fee with some prepaid credit cards. The idea with a prepaid debit card is to provide you an alternative to a checking account. Through your prepaid account you are provided the ability to send bill payments to pay your bills.
We have recently started to see some prepaid cards provide you only a limited number of free bill payments per month. After that you are charged a fee every time you use the payment system. For instance, your first 5 bill payments per month may be free and then you are charged a fee for every additional bill payment you make.
Frequently prepaid cards will give you free electronic bill pay. However if you want to have a paper check sent they will charge you $1, every time you use bill pay with a paper check.
In our opinion, we believe that the online prepaid credit card market is the most cost-efficient and customer friendly today than in years past. This market is growing rapidly and many traditional credit card issuers have started to market a prepaid credit card. This provides you many cheaper options with better features and benefits than in the past.
One of the best prepaid cards we have reviewed is the prepaid Bluebird Card by American Express and Walmart. If you want to build credit, then we would suggest that you look into a secured credit card, that will report your account monthly to all 3 of the major credit bureaus. Unfortunately, even the best prepaid debit card, wont help you build credit.
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