Best Prepaid Credit Cards for the 'Unbanked'
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For the 6% of Americans that are “unbanked,” buying anything or paying their bills with anything other than cash can be difficult.
Approximately 13 million people, or 6% of the country’s population, are unbanked, which means they don’t have a checking or savings account at a bank or credit union, according to a survey by the Federal Reserve.
One way to deal with that is to have a prepaid credit card accepted by merchants just like a regular credit card that gives users a line of credit. But instead of a line of credit, users of prepaid credit cards load the card with their own money and use it like a debit card. It can beat carrying around a load of cash. Overspending isn’t a problem because you can only use up to the amount of money you’ve loaded onto the card.
The cards are also called prepaid debit cards and secured credit cards, though a security deposit isn’t needed. The biggest downside is that they often come with many types of usage fees since card issuers don’t make money from interest charged on balances because interest isn’t charged and balances aren’t allowed on prepaid debit cards.
Jump To
Overview of the best prepaid credit cards
Prepaid Card | Best for |
|---|---|
Bluebird American Express Prepaid Debit Account | Fewest fees |
Paypal Prepaid Mastercard | PayPal customers |
Brinks Money Prepaid Mastercard | Cash back rewards |
American Express Pay As You Go | Few monthly transactions |
Greenlight Prepaid Mastercard | Kids |
Netspend Visa Prepaid Card | Rewards and savings account |
Walmart Moneycard | Walmart customers |
FamZoo Prepaid Mastercard | Kids |
Best prepaid credit cards
Bluebird American Express Prepaid Debit Account
The Bluebird American Express Prepaid Debit Account is a reloadable prepaid debit card that can be used anywhere American Express cards are accepted. Bluebird is one of the few prepaid credit cards that doesn’t charge many fees or at least has low fees. It doesn’t charge a monthly fee, a fee per purchase, an inactivity fee, or for ATM withdrawals through the 30,000 MoneyPass ATMs it works with.
The main fees it charges are a reload fee of up to $3.95 to add cash to the card and $2.50 ATM withdrawal fees for using an out-of-network ATM. The card has a $5 activation fee when opened at a Walmart store, though there’s no charge for opening a Bluebird card online. It charges a $5 minimum fee on checks through a 1% fee on payroll or government checks and a 5% fee on other checks.
A nice benefit of the Bluebird card is that when you set up direct deposit from your employer, you can get your money up to two days faster if your employer submits paycheck information early. This is common with standard payday electronic deposits.
Like regular American Express credit cards, Bluebird offers free purchase protection. Accidental damage and theft for up to 120 days from the date of purchase are covered. Cardholders are also protected against fraudulent purchases if their Bluebird card is lost or stolen.
- Costs: $3.95 to reload cash, $2.50 for out-of-network ATM.
- Where to find: Bluebird
The solutions to simplify your everyday financial tasks.
- Personal Loans: Borrow $2,000-$35,000* for things like a medical bill, a home project, or an unexpected expense.
- Credit Cards: Get closer to your financial goals with clear and transparent credit limits from $300-$3,000.
PayPal Prepaid Mastercard
Whether or not you have a bank account, you may be using nonbank online payment services such as PayPal and Venmo, as 46% of all U.S. households do, according to FDIC data. If you have a PayPal account and are unbanked, then the PayPal Prepaid Mastercard can help you make purchases and do other transactions without being tied to a bank.
The card can be used wherever Mastercard is accepted and connected to your PayPal account to transfer money. Cash can also be added from more than 130,000 reload locations nationwide. The card also has a balance transfer feature to make moving money easier.
The card offers cash back rewards, which it calls Payback Rewards, through an optional program where rewards offers are based on your individual shopping habits. Rewards are credited to your card account and aren’t available through a check or other direct payment method.
The card charges an activation fee of up to $4.95 to open an account at a retail location, though opening an account online is free. It also charges a host of other fees, though cardholders do get to choose the color of the card they get as a physical, plastic card.
- Costs: $4.95 monthly fee, $2.50 for ATM withdrawal outside of the MoneyPass Network of ATMs, $3.95 for cash reload, 50 cents for ATM balance inquiry
- Where to find: PayPal
Brinks Money Prepaid Mastercard
Like regular credit cards, the Brinks Money Prepaid Mastercard gives cardholders cash back. These aren’t just cash-back rewards that can be redeemed for personalized rewards — though it does offer those too — but users can earn one point per dollar spent on signature transactions that can be redeemed for cash back on their account.
The card has three fee options: one with no monthly fee but a per transaction fee of $1.50, one for $9.95 per month but signature and PIN purchase transactions are free, and one plan for $5 per month with free transactions but direct deposits of paychecks or government benefits of at least $500 per month must be made.
If you can set up direct deposit, the reduced monthly plan is the best deal, while the no monthly fee plan costs more after four monthly transactions. A direct deposit could get funds in your account up to two days faster than normal.
The Brinks card also comes with an optional savings account that pays an outstanding interest rate of 5.00% APY at a time when many high-yield savings accounts pay around 3.5% APY.
The card has free budgeting tools to help track your spending and set spending limits for yourself. Another feature is its mobile app, where you can add funds to the card through a mobile check deposit.
- Costs: Monthly fee up to $9.95, $1.50 transaction fee on a plan with no monthly fee, $2.50 per ATM withdrawal domestically and free internationally, 4% foreign transaction surcharge, $3.95 per cash reload at Netspend Reload Network location, $3 to transfer money via ACH to an outside account, 50 cents for a balance inquiry at domestic ATM.
- Where to find: Brinks
Serve American Express Pay As You Go Visa Prepaid Card
American Express offers four other prepaid credit cards, all basically prepaid debit cards. One we like the most is the Serve American Express Pay As You Go Visa Prepaid Card.
If you only need a prepaid card for a few monthly transactions, then this card may be what you’re looking for because it has no monthly fee. It does tack on a lot of other fees, depending on what you use it for, so you should be aware of how much you’re using it.
The card charges for using it at an ATM to withdraw cash: $2.25 per transaction from American Express, and the ATM operator may also charge a fee, even if you don’t complete the transaction. ATM fees are common for prepaid credit cards that don’t charge a monthly fee.
But this card offers another way to get cash without going to an ATM. You can withdraw cash when buying something in a store and asking for cash back. No extra fee is charged for getting cash back, but the card company charges a $1 fee for a signature or PIN purchase. In general, signature debits are cheaper for merchants with lower average transaction amounts, while PIN debit transactions are cheaper for merchants with higher average transactions.
- Costs: $1.50 one-time fee to open a card in a store, no monthly fee, up to $3.95 reload fee at reload locations, $1 for online bill pay, $1 per signature or PIN transaction, $2.25 ATM fee, $1 for ATM balance inquiry, $4.95 fee for international ATM withdrawal, 3.5% for international transaction, $3.95 inactivity fee for not completing a transaction with the card for 90 days.
- Where to find: Serve
Greenlight Prepaid Mastercard
The Greenlight Prepaid Mastercard is a way for children to learn how to spend money managed by their parents. Kids can earn money through chores, set savings goals, and spend and invest through its financial products. Parents set controls for the card and get real-time notifications every time their children spend money.
Parents can choose which stores where their children can spend money with the card and can set ATM cash withdrawal limits. The cards can also be used for mobile payments on Apple Pay or Google Pay.
Plans start at $4.99 monthly for up to five kids and two adults per plan. Greenlight doesn’t charge for ATM withdrawals, though the ATM operator may charge a fee. Kids can also use the card internationally since it doesn’t charge international transaction fees.
- Costs: $4.99 per month
- Where to find: Greenlight
Netspend Visa Prepaid Card
Like the Brinks card, the Netspend Visa Prepaid Card has a cash-back rewards program called Payback Rewards for cardholders to earn reward offers based on their shopping habits. The cash-back rewards are credited to your card account and aren’t given back as a check or other direct payment method. Using this program is optional.
Another nice feature is a virtual card number to keep your card’s number undercover and give you more control over online transactions. Up to six virtual accounts can be created per card.
The card has two plans. The pay-as-you-go plan has no monthly fee but charges $2 per purchase with a PIN, and with a signature. The monthly plan costs $5 but doesn’t charge a fee per purchase.
Both plans have these fees: $2.50 for an ATM withdrawal, $3.95 for a cash reload, 50 cents for an ATM balance inquiry, $5.95 per month for not using the card for 90 days, and $9.95 to purchase the card to start an account.
- Costs: $5 monthly with no transaction fees or monthly fee and $2 per transaction. Also: $2.50 for ATM withdrawal, $3.95 for cash reload, 50 cents for ATM balance inquiry, $9.95 to open an account, and $5.95 monthly for an inactive account after three months.
- Where to find: NetSpend
Walmart MoneyCard
Regular Walmart customers may like the Walmart MoneyCard, which gives cash back in a few ways, most notably at Walmart gas stations, stores, and Walmart’s website.
Cardholders can earn up to $75 in cash annually when using the card. They earn 3% cash back at Walmart.com, 2% at Walmart gas stations, and 1% at Walmart stores.
Another nice feature is that up to four family members aged 13 and older can get free MoneyCard accounts in the app with an activated, personalized card.
The card comes with a free savings account but only pays 2% interest for balances up to $1,000. The Brinks prepaid credit cards pay 5% APY.
- Costs: $5.94 per month, though fee is waived with direct deposits of $500 or more each month. Adding cash to the card costs $3 at Walmart registers, up to $5.95 elsewhere, and is free on the Walmart app. The ATM fee is $2.50, the ATM balance inquiry is 50 cents, and the foreign transaction fee is 3%.
- Where to find: Walmart
The solutions to simplify your everyday financial tasks.
- Personal Loans: Borrow $2,000-$35,000* for things like a medical bill, a home project, or an unexpected expense.
- Credit Cards: Get closer to your financial goals with clear and transparent credit limits from $300-$3,000.
FamZoo Prepaid Mastercard
The FamZoo Prepaid Mastercard is another Mastercard meant to help kids learn how to use money. Kids can use the card at ATMs or merchants or can use it to get money from their parents, with the cash a parent hands over withdrawn from the child’s prepaid account.
Parents, however, may have difficulty understanding the card’s fees because FamZoo doesn’t do a great job listing the fees.
Reloading the card with cash costs up to $4.95, but FamZoo doesn’t say where the card can be reloaded. It also doesn’t list an ATM fee, though it says that inside its ATM network, a withdrawal is free, but outside of the network, a fee will be charged by the other network. But it doesn’t tell you which network it works with.
FamZoo makes it easy to see the card’s monthly fee: $5.99. That can drop to as low as $2.50 per month if you pay $60 ahead of time for two years of activation. A 12- and 6-month plan is also available with a discount.
- Costs: $5.99 per month per family. Cash reload is up to $4.95. ATM fee no listed.
- Where to find: FamZoo
Summary of best prepaid credit cards
Prepaid Card | Monthly Fee | Free Early Direct Deposit | Best Way to Add Cash | Free ATM Network |
|---|---|---|---|---|
Bluebird American Express Prepaid Debit Account | $0 | Yes | Walmart | 30,000 MoneyPass ATMs |
PayPal Prepaid Mastercard | $4.95 | Yes | 130,000 reload locations | MoneyPass Network |
Brinks Money Prepaid Mastercard | Up to $9.95 | Yes | Direct deposit | No. $2.50 per use |
American Express Pay As You Go | $0 | Yes | Direct deposit | No. $2.25 per use |
Greenlight Prepaid Mastercard | $4.99 | No | Parent transfer | Yes |
Netspend Visa | $5 | Yes | Direct deposit | No. $2.50 per use |
Walmart MoneyCard | $5.94 | Yes | Walmart app | No. $2.50 per use |
FamZoo Prepaid Mastercard | $5.99 | No | Parent transfer | Yes |
FAQs
Why would I need a prepaid credit card?
Not having a bank account is the biggest reason for a prepaid credit card. The FDIC survey found that the use of prepaid cards by unbanked households is 32%, and only 5% among banked households. Of course, you don’t have to be without a bank account to use a prepaid credit card.
Will a prepaid credit card build my credit?
No, you can’t build credit with a prepaid credit card that is more of a debit card than a credit card. Activity on prepaid cards isn’t reported to the credit bureaus, mainly because you’re not using credit with the card but are loading it with cash and using it as a debit card. You’re not incurring debt or being extended credit, so your credit score isn’t affected.
How do I add money to a card?
If you don’t have a bank account, you can add money to a new card in a few ways. Walmart and other retailers allow cash to be added for a fee. Some cards have a mobile app to scan a check with your phone and deposit it to the card, or you can sign up for direct deposit with a paycheck or government benefits.
Is a prepaid credit card easy to get?
Yes. You must be 18 or older, provide your Social Security number to verify your identity, and have a valid email address, among other identifying information that may be requested. No credit check is required because using a prepaid credit card doesn't affect your credit history.
Why you should use prepaid credit cards
For people without a bank account, prepaid credit cards are an easy way to buy things and pay bills with a credit card without having to carry around cash. The cards are also called prepaid debit cards and use the money you’ve already loaded onto the card, even if you don’t have a bank account.
A big downside is that many prepaid cards have very high fees. Some charge a monthly fee and don’t charge for transactions; others have no monthly fee and charge for almost any way you can use the card. Users might have to pay fees to activate a card, add money to it, buy something, use an ATM, or just check the balance on the card.
The solutions to simplify your everyday financial tasks.
- Personal Loans: Borrow $2,000-$35,000* for things like a medical bill, a home project, or an unexpected expense.
- Credit Cards: Get closer to your financial goals with clear and transparent credit limits from $300-$3,000.
The bottom line
Prepaid credit cards are easy to use and can be a good way to purchase something without paying in cash. Some cards even have perks that regular credit cards do, such as cash-back rewards, that give cardholders a little of their money back with each transaction.
The fees, however, can make a prepaid card expensive. Opening a checking account at a bank or credit union should be cheaper and are often free with direct deposit. Avoid overdraft fees by having enough money in your account to cover withdrawals.
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Writer
Aaron Crowe is a freelance journalist who specializes in personal finance writing and editing. He has worked at newspapers, where he won a Pulitzer Prize, and has written for numerous online publications. These include AOL, US News & World Report, WiseBread, Bankrate, AARP, and many websites focusing on housing, credit and insurance. He lives in California with his wife and daughter.
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