We no longer support this card category. If you’re looking to build credit, consider a secured credit card.
Prepaid cards are primarily a short-term financial solution for the un-banked. However, there are a few other reasons to take advantage of the many free prepaid debit cards available today. You may need a card for your child who is going off to college. By using these prepaid debit cards, you will be able to control the amount that they can spend.
Another reason is that you may not want a bank account and/or might not qualify for (or want) a regular credit card. With the economy like it is, a lot of people have turned the prepaid card to help them control spending. Having your employer or the government send your check by direct deposit to your prepaid card is the best solution for many. Plus, prepaid debit cards are safer and more convenient than carrying around cash. But watch out for the fees.
Free prepaid debit cards aren’t that complicated. You sign up, in most cases you are accepted immediately, without question. There is no credit check. Most cards do not have a sign up fee or an annual fee to use the service. Like any financial product, prepaid cards have their negatives. So make sure you read the terms and conditions and understand what you’re getting into.
More About Prepaid Credit Cards
A prepaid credit card is somewhat of a contradiction. It’s a credit card. But the available credit balance is covered by money that you have previously deposited to the card. So, the credit is actually granted by you.
You may be asking, well, what’s the point? The point of a prepaid credit card is to provide you with usable credit card and a credit history building financial tool (only on some cards), without needing a bank account, and without running the risk of going into debt. Some people might not be able to get a checking account or regular credit card because of bad credit.
There are many people who don’t want a regular credit card. They just don’t want the risk. While most in the anti-credit crowd turn to bank accounts and debit cards to meet their financial needs, some don’t want bank accounts either.
Many people for whatever reason don’t want to get a bank account. They just want to work, earn money, and then spend that money. There is no need for check writing or other financial services for these folks. If you’re in this category, then a prepaid card might be for you.
A prepaid card works by you first applying for the card (you will be instantly approved, guaranteed). Then you put money onto the card. Most people set up a free direct deposit from their employer to the card. Having a direct deposit on the card will also make the prepaid card free of fees in most cases (for instance, the Mango(TM) MasterCard® Prepaid Card). You can also add money to your prepaid card using a cash network found at your local grocery store. Once you have money on the card, you are free to use it wherever MasterCard and Visa are accepted.
Benefits of having a prepaid card include: having an actual card to bring along on travel (renting cards, checking in hotels, etc.), having a card to make online and over the phone purchases, and having a card to withdraw cash from the ATM.
Prepaid cards are also good for some people because: you’re guaranteed approval, there is no credit check, you don’t have to worry about interest rates or overdraft fees, and typically you’ll have some online bill pay options. Lastly, by getting a prepaid card, you’ll no longer need to make yourself a target to predators because you carry around so much cash.