Mother and daughter online whopping with credit card and laptop

If you’re looking for a way to manage your money without the use of a traditional bank account, you could consider using prepaid cards. These payment cards limit your expenditure, and you don’t need a credit check to get one. If you need to practice budgeting your money or just want an alternative to credit cards, we’re going to cover what a prepaid card is and how they compare to other types of payments.

What is a prepaid card?

A prepaid card is similar to a debit card in that you can use it to make purchases at retailers and online, but you can only spend the balance available. If it’s a reloadable prepaid card, you can add more money to it, but if it’s not, the card becomes unusable. Reloadable prepaid cards offer an alternative to those who need a place to manage their money without having to go through a traditional bank.

You can get a prepaid card from a retail store, grocery store or online and add money to it by way of cash, check or a linked checking account. Most prepaid cards have associated fees so it’s important to read the fee schedule and agreement.

There are many different types of prepaid cards. Some are open-loop (network logo) cards, and these can be used anywhere the affiliated network is accepted (for example, Visa, Mastercard, Discover, etc.). And some prepaid cards are closed-loop (merchant specific) cards that are only good at specific retailers.

Prepaid cards vs debit cards

Unlike a debit card, which is funded with money from a bank account (and may be connected to multiple bank accounts through overdraft protection), funds in a prepaid card are added manually or automatically through direct deposit. You also don’t need to go through a credit check or qualify for a bank account to get a prepaid card; you just need to have your identity verified with a government-issued ID.

Prepaid cards are perfect for anyone who doesn’t want to use a traditional bank account or for parents who want to teach their kids how to manage money without the use of cash or credit.

Prepaid cards vs credit cards

Prepaid cards can offer an alternative for those who either don’t want to use credit or who can’t qualify for a credit card, as they don’t require credit checks, can be used anonymously and let you set spending limits. Any purchase made with a prepaid card is the same as paying cash.

When you use a credit card, you’re essentially borrowing money from a financial lender to cover your purchases; you’ll pay the lender back at a later date. This allows you to build better credit so you can borrow more money in the future. There are many different types of credit cards on the market to help you do this, but some people may not qualify due to poor or no credit.

However, prepaid cards will not help you rebuild credit like a secured credit card can, so it’s important to take your financial goals into consideration when choosing whether a credit card or prepaid card is best for you.

Top prepaid cards

Here are some of the top reloadable prepaid debit cards for anyone looking for a way to manage their money without a traditional bank account.

Netspend® Visa® Prepaid Card

The Netspend® Visa® Prepaid Card is a prepaid debit card offered by the NetSpend platform. It gives you all the features of a regular debit card, including direct deposit, mobile deposit, the ability to send money to others and online or mobile money management. They also offer a pay-as-you-go fee plan. You also get some perks like a $10 purchase cushion (at the lender’s discretion) and access to the NetSpend network of merchant locations where you can reload your card. The fee schedule varies depending on how often you use the card, but you can reduce monthly fees if you receive at least $500 in direct deposits per month.

Brink’s Prepaid Mastercard®

The Brink’s Prepaid Mastercard® is similar to the NetSpend Visa card and requires no credit check or traditional bank account, however, you do need to go through an ID verification. This card can also earn you cash back on selected purchases and provides fraud protection in case of unauthorized use. There are three fee-plan options: a pay-as-you-go, monthly and a reduced monthly plan that can save you money if you have at least $500 in qualifying direct deposits each month. Plus, with direct deposit, you could get paid up to two days early and qualify for a $10 purchase cushion and optional savings account that can earn you up to 5.00% APY.

PayPal Prepaid Mastercard®

The PayPal Prepaid Mastercard® is a prepaid debit card that you can reload straight from your PayPal account, your PayPal Cash Card or from a NetSpend reload network location. If you get your funds directly deposited, you could get your funds up to two days earlier than traditional banks. This card also comes with the ability to earn extra rewards based on individual spending habits, and you’ll get the option to open a savings account through Bancorp Bank. Plus, with access to your account on mobile and online, you can check your account transactions, monitor your balance and find a nearby reload location so your card is ready for use anytime you need it.

Prepaid Visa RushCard

The Visa RushCard is a prepaid debit card on the Visa network. With the Visa RushCard, you can set up bill pay, shop anywhere Visa is accepted, get cash from the ATM or manage your money on the go with the mobile app. You also get safety features like the ability to lock your card, protection against unauthorized purchases and account alerts. When you’re ready to reload money to your card, you can use the Green Dot network of merchants to add money at the register of a participating merchant. You can also reload using a mobile deposit, direct deposit from payroll, have friends and family send money or by transferring from another bank account.

How to add money to a prepaid card

If your prepaid card is reloadable, you might be able to add money with mobile check deposit, direct deposit, transfer or cash at participating merchant registers. Specific steps on how to add money will be different with each card, check your user account for details.

With most prepaid cards, these are the primary ways you’re going to add money to your prepaid card:

  • Cash at the register: Each prepaid card is connected to a reloading network of participating merchants. The merchant will let you add money to your card at the register. Some of the major prepaid card networks are Green Dot, rePower by Mastercard, the NetSpend network and MoneyGram.
  • Check via mobile deposit: If you register for an account online, your card may offer check deposit via mobile.
  • Direct deposit: You can have your paycheck directly deposited into your prepaid debit card account. Plus, most issuers will offer a reduction in monthly fees for cardholders that use this feature.
  • Bank transfer: You also have the option to transfer money into your card from an outside bank account. Some issuers let family and friends send you money from an outside account.
  • Money packs: Visa and Green Dot have reload packs that you can put money onto rather than load onto a single card. You can get these reload packs at most retailers. You then load funds from the pack onto your prepaid card, or cards if you have more than one.

Prepaid cards offer flexibility and convenience for anyone looking for a way to manage their money without the need for a traditional bank account. It can help those who want to budget or those who need help managing their daily spending since it’s easy to set spending limits. With all the prepaid card options out there, just be sure to understand the fee schedules and keep an eye on balances to make sure the card always has money available.

Disclaimer: This content is not provided or commissioned by the credit card issuer. Opinions expressed here are author’s alone, not those of the credit card issuer, and have not been reviewed, approved or otherwise endorsed by the credit card issuer. This content was accurate at the time of this post, but card terms and conditions may change at any time. This site may be compensated through the credit card issuer Affiliate Program.