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Consumer Tips: Prepaid Cards

How do I choose a prepaid card?

If you decide to use a prepaid card:

  • find out what fees you will have to pay
  • see which card has lower fees
  • do not buy a card because you like the celebrity who talks about it.  It may have higher fees than other prepaid cards

 

How do I compare prepaid cards to other choices?

Prepaid cards can cost a lot to use.  You might want to compare other ways to spend your money.

Choose at least two of each to compare:

  • prepaid cards
  • secured credit cards
  • checking accounts in a bank or credit union

For each type of card or account, answer these questions:

  • What are the fees?  Look for:
    • low activation fees
    • low annual fees
    • low ATM fees
  • Will the card help your credit history?  Some cards send information to the three credit reporting companies.   That might help you build a credit history.
  • Does your deposit earn interest?  Sometimes you can earn interest on the money you put on a card or in a bank account.

Compare the answers.  You might find ways to spend your money that are cheaper than a prepaid card.

Prepaid Cards