Reloadable prepaid cards work just like bank debit cards. Instead of making a deposit to your bank account, you need to add money to reloadable prepaid cards to use at stores, make an online purchase, withdraw cash at ATM, etc. I used to think that reloadable prepaid cards are merely an alternative to a bank account for those who can’t open it for whatever reasons. But I was wrong. There are many reloadable prepaid cards available, and many of them have useful features and unique benefits. By knowing each feature and benefit and choosing the right card, Reloadable prepaid cards are great tools for your money saving.
What types of benefit do they have?
Aside from safety of not carrying cash, some reloadable prepaid cards have unique benefits. For example, American Express Serve can sync with Amex Offer. Making qualifying purchases with the card gives you cash back in statement credit. (American Express Serve, Chime Card, etc.)
An account of reloadable prepaid card is just like a checking account that exists only online. After opening an account, you will have access to the routing number and account number, which you can usually see at the bottom of a paper check from a regular checking account, so that you can set up direct deposit, make a money transfer, etc. And some reloadable prepaid card allow you to open a savings account, too. These savings accounts offer incredibly high interest rate. (Mango Money Card, PayPal Prepaid, etc.)
Paying bills online is very convenient. Some prepaid cards offer online-bill-pay feature for not only utility and cables, but also credit cards. If you load the card with Reload Pack such as Vanilla Reload, MoneyPak purchased with your reward credit card, the cards help you earn credit card reward, meet the minimum requirement spending, get sign-up bonus. Almost all prepaid cards are loaded with Reload Pack. As long as you can buy reload packs by credit card, you can take advantage of it.
What are the Fees?
Once you find prepaid cards with features and benefits that interest you, you need to learn about the fees. There are multiple fees for each activity such as loading, balance inquiry, foreign transaction, ATM withdrawal, monthly maintenance fee, etc. Before opening an account, imagine how you use the card and make a list of fees that you may be going to be charged. Are these fees are acceptable? Almost all prepaid card charge a monthly maintenance fee, but many cards offer options to waive the fee. (for example, load at least $500 and waive the fee) Can you meet the requirements?
For those who wants to save money by using prepaid cards, paying the fee doesn’t make sense. Some fees may not be avoidable, but the return (cash back, interest of savings account, credit care reward on purchase of reload packs, etc.) should be greater than the fee. However, I don’t pay a fee for any prepaid cards I currently use. I choose a loading option that they don’t charge a fee. I load enough money to waive the monthly fee. I just earn statement credit or interest of savings account without paying a penny. For more information about Reloadable Prepaid card, please read other posts.