{"id":211858,"date":"2024-03-10T13:42:43","date_gmt":"2024-03-10T13:42:43","guid":{"rendered":"https:\/\/michigandigitalnews.com\/index.php\/2024\/03\/10\/how-to-use-a-prepaid-debit-card-the-tool-that-lets-you-leave-your-cash-at-home\/"},"modified":"2025-06-25T17:20:54","modified_gmt":"2025-06-25T17:20:54","slug":"how-to-use-a-prepaid-debit-card-the-tool-that-lets-you-leave-your-cash-at-home","status":"publish","type":"post","link":"https:\/\/michigandigitalnews.com\/index.php\/2024\/03\/10\/how-to-use-a-prepaid-debit-card-the-tool-that-lets-you-leave-your-cash-at-home\/","title":{"rendered":"How to use a prepaid debit card\u2014the tool that lets you leave your cash at home"},"content":{"rendered":"

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Fortune Recommends\u2122 has partnered with CardRatings for our coverage of credit card products. Fortune Recommends\u2122 and CardRatings may receive a commission from card issuers.<\/em>\u00a0<\/p>\n

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Without a credit card or debit card, trying to make purchases online or perform many other financial tasks can be an inconvenience. Therefore, if you have bad credit or you prefer to avoid traditional plastic payment methods, you might consider using prepaid debit cards as a cash alternative.\u00a0<\/p>\n

Around six million Americans\u20144.5% of U.S households\u2014are \u201cunbanked\u201d with no access to a checking or savings account according to the most recent data available from the Federal Deposit Insurance Corporation (FDIC). Meanwhile, 18% of adults in the United States do not have an open credit card account according to the U.S. Government Accountability Office.\u00a0<\/p>\n

As you can see, if you don\u2019t have access to traditional credit cards or debit cards, you\u2019re not alone. Yet before you use a prepaid debit card as an alternative (or in addition) to these types of cards, it\u2019s wise to understand how prepaid cards work along with their limitations.\u00a0<\/p>\n

What is a prepaid debit card?\u00a0<\/h2>\n

A prepaid debit card is a type of plastic payment method you can use to make purchases. The card works like a gift card in the sense that you must preload it with money before you can use it.\u00a0<\/p>\n

Many prepaid debit cards come with the backing of major credit card networks like American Express, Visa, or Mastercard. Such cards may feature Amex, Visa, or Mastercard logos. You can typically use the cards with any retailer that accepts credit cards from those networks or standard debit cards.<\/p>\n

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SPONSORED PARTNER<\/p>\n

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Netspend Prepaid Card<\/h4>\n
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Our take<\/h5>\n


\nThe Netspend Prepaid Card gives users peace of mind that they won\u2019t be turned down at the register for going over their balance by a few bucks.
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Monthly fee<\/td>\n

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$5.00<\/td>\n


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ATM fee<\/td>\n

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$0<\/td>\n


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How do you use a prepaid debit card?\u00a0<\/h2>\n

Prepaid debit cards look similar to credit cards and debit cards on the outside. Yet prepaid cards do not operate the same as other traditional payment methods.\u00a0<\/p>\n

To begin, when you purchase a prepaid debit card you do not need to complete a credit application. No credit card issuer will check your credit report<\/a> or credit score<\/a> when you open an account. There will be no hard credit inquiry that has the potential to damage your credit score. And unlike a credit card, you don\u2019t have to worry about needing a good credit score<\/a> to qualify for a new account<\/a>.\u00a0<\/p>\n

When you open a prepaid debit card, the account does not come with a credit limit<\/a> for you to borrow against. It\u2019s impossible to create credit card debt<\/a> using this type of card. And since you\u2019re not borrowing money or revolving a balance from one month to the next, you also won\u2019t incur any interest charges<\/a> when you use a prepaid card.\u00a0<\/p>\n

Instead, with a prepaid debit card you pre-load a certain amount of money onto the account. This amount represents the maximum amount you can spend on the card before you\u2019ll need to reload additional funds.\u00a0<\/p>\n

Keep in mind that most prepaid cards usually feature fees you must pay when you use the account. Some prepaid cards may be more expensive to use than others. Below are some of the common prepaid card fees you may encounter.\u00a0<\/p>\n