A Guide to Prepaid Debit Cards
Prepaid debit cards, otherwise known as general purpose reloadable cards, can be an alternative to traditional credit and debit cards. They often even look like other cards and bear many of the logos we’ve come to know — MasterCard, Discover, and Visa. But that’s where the similarities end.
What’s a prepaid debit card?
It can be used to make purchases in stores and online, receive direct deposits, pay bills online, and obtain cash at an ATM, all similar to what a debit card does, writes Consumer Reports. Unlike debit cards, though, you don’t need to have a bank account. The cards can be purchased in stores or online.
It’s a great way to control your spending. “Perhaps the most popular use of prepaid cards is to transfer funds from parents to children and particularly college students,” writes Bankrate. If you don’t have a high income, are frequently away from home, or are looking for a way to track your children’s spending, it can be a solid option. You won’t have to go through the hassles and costs of a bank account, either — all you need is a mobile phone and a prepaid card. It’s a great way to give kids a little more financial freedom while letting you monitor it.
It can also be a substitute for a standard bank account. If you’re living in a community that may not have a ton of banking options or have had prior issues with a bank that could make it difficult to open an account, it’s definitely worth considering. There are no credit checks required for prepaid debit cards, according to Bankrate.