How to Spot a Good Prepaid Card Deal

When you can’t apply for a credit card, you might consider getting a prepaid card. These cards are similar to debit cards, but they’re not tied to a checking account. (Though some prepaid credit cards let you write a few checks a month.) The famous-for-being-famous Kardashian sisters launched a prepaid card recently and the reviews remind us all that some prepaid cards are duds. Here are some things to look for in a good prepaid card deal.

Low or No Monthly Fee

It’s common for prepaid cards to come with a monthly fee, but the best ones have low fees. Some even waive the fees if you deposit a certain amount each month or keep a certain minimum balance. Look for a prepaid card with a monthly fee below $7 per month or $84 a year. Ideally, you can get the fee waived by making a minimum deposit every month. Make sure the minimum deposit required to waive the fee is at least as much as your monthly income. No sense in trying to deposit $3,000 to waive the monthly fee when you only make $2,000 a month.

Free Direct Deposit

Direct deposit usually requires little to no processing on the receiving bank’s end. So there’s really no reason a prepaid card should charge you for direct deposit. In fact, the best prepaid cards have free direct deposit and will waive your monthly fees if you have at least one paycheck direct deposited onto your card. And if the card doesn’t have direct deposit at all, forget about it.

Cheap Reload Fees

A reload is when you add money to your prepaid card. You can often do this at many retailers or a bank branch if your prepaid card is offered by a bank. Most retailers charge you a fee around $5 to reload money on your prepaid card and some repaid cards charge you, too. The cheaper the reload fee, the better. Free reloads are best of all. If a prepaid card offers free reloads, you can expect to have a cap on the number of reloads you can do each month.

ATM Fees

You’ll pay an ATM fee whenever you use a PIN to withdraw cash from an ATM. The bank who issues the ATM will charge you a fee and so will your prepaid card. You can’t control what the ATM charges you, but you can choose a prepaid card that has low ATM fees. Between $2 and $3 is a reasonable fee.

Free Bill Pay

If you don’t have a checking account, you’ll probably use your prepaid account to pay your monthly bills. Some of the worst prepaid cards charge a fee to enroll in online bill pay as well as a fee per transaction. If you expect to use your prepaid card to pay bills, look for one that doesn’t charge for bill pay. There are plenty of them out there so there’s no reason to pay a fee on top of paying your bills too.