Prepaid credit cards can help you control your finances if you don’t have a bank account, gift money, or teach your child financial responsibility. You can use a credit card to buy a prepaid card in a retail store, a financial services centre, or online, but to get the best deal, you should do some preliminary research to avoid cards with high fees.
Part 1 Buying a Prepaid Credit Card
1. Purchase a card from a retailer. Prepaid credit cards are available at the majority of gas stations, drug stores, grocery stores, and big box stores. Although it is up to individual stores to accept credit cards for such purchases, the vast majority of them do. In most cases, the amount on the card will be the same as the amount you paid. However, because store selection is limited and buying in store is often more expensive, it is generally a better idea to shop online.
2. Get a card from a financial services centre or a currency exchange. Prepaid cards are available at a variety of banks, credit unions, check cashing establishments, and currency exchanges. Some locations, like retail stores, may not accept credit cards as a form of payment, though this is uncommon. As with the Green Dot prepaid Visa, the fees associated with these cards are frequently less than what you would pay if you purchased the same card in a retail store. Because fees vary so greatly between cards, it is best to compare cards online before making a purchase.
3. Purchase a card online. There are a plethora of cards available online, all of which can be easily purchased with a credit card. Typically, you’ll find better deals here; for example, activation or initial purchase fees are frequently waived. Make sure to shop around for the best card.
4. Save the receipt. Always keep the receipt in case you or the person to whom you give the card has trouble using it.
Part 2 Finding the Best Card
1. Avoid paying exorbitant fees. Prepaid credit cards are not regulated in the same way that debit cards or regular credit cards are, and as a result, they come with a dizzying array of fees. Some of the most popular credit card fees can be found here. However, before purchasing a card, be sure to read the fine print and look for:
- Activation or initiation fees
- Monthly fees
- Per transaction fees
- ATM fees
- Balance inquiry fees
- Fees to add money to the card
- Fees for paper statements
- Fees for customer service calls
- Bill payment fees
- Fees for not using your card
- Fees when closing the account
- Overdraft fees
2. Avoid credit cards that charge a fee per transaction. Pay-as-you-go cards will cost you a lot of money if you use them frequently. Unless you only use your card in emergencies, a low monthly maintenance fee is a better option. In that case, check to see if your card has an inactivity fee.
3. Keep an eye out for credit cards that charge a fee per deposit and have deposit limits. Most cards will waive deposit fees if you fund your card through direct deposit, PayPal, or a bank transfer. Adding money at a retail store usually costs between $2 and $6. Some, on the other hand, charge for all deposits. You’ll want to add funds to these cards infrequently and in large amounts, so make sure there are no limits on how much you can add at one time or in a given month.
4. Make use of a card comparison website. BankRate.com and Consumer Reports provide comparisons and recommendations to help you choose the cards with the lowest fees. Bluebird – An American Express branded card that includes bill pay (can send paper or electronic checks from the account), no monthly fee, no activity fee, no customer service fees, no inactivity fee, and no declined transaction fee.
Chase Liquid – A Visa branded card with a $4.95 monthly maintenance fee (waived if card is linked to a Chase bank account), but no other fees if you use in-network ATMs for withdrawals and account inquiries. It does not have a bill pay feature.
Visa Rush Card Unlimited Plan – Has a one-time activation fee of $5.95 (if you use direct deposit) or $7.95 (if you don’t), but no other fees as long as you reload via PayPal or direct deposit and use in-network ATMs for withdrawals and balance inquiries.
Green Dot Prepaid Visa – Card with a $5.95 monthly fee (waived if you deposit a certain amount each month or have a certain number of transactions) but no other fees if purchased online and used at in-network ATMs for withdrawals and balance inquiries.
Creative Commons License