KBID 1732 Date Created: 3/16/2012 Date Modified: 10/12/2023
Prepaid debit cards are cards that have been loaded with a dollar amount that you draw down with each purchase. They are not tied to a checking account, so there is no worry about overdrawing your account and the fees that may be assessed for doing so. Prepaid debit cards may be just the thing for those who do not have a checking account or for those who have gotten into debt using a credit card. Unlike credit cards, prepaid debit cards don't charge interest on purchases either, so you may actually be saving money in the long run. Prepaid debit cards can be a cost effective alternative to carrying cash or incurring check cashing fees.
These general-purpose cards can have considerable drawbacks though. Some prepaid debit cards come with multiple fees for ordinary use (fee types and amounts vary from card to card). If you already have a prepaid card or are thinking about getting one, consider the following: