You can get a prepaid card from banks, retailers, money transfer services, and online platforms
A prepaid card is a card you load money onto before you use it — you spend only what you've put in. Unlike a credit card, it doesn't report to credit bureaus and doesn't build credit history. But it does let you spend online and in stores without carrying cash, and some prepaid cards come with features that make them useful for specific situations.
Where you buy one depends on what you need it for. If you want a card quickly with minimal paperwork, a retailer like Walmart or Target sells them at checkout. If you want lower fees and more features, a bank or online platform may be better. If you're receiving a paycheck or government benefit, some employers and agencies partner with prepaid card providers to deliver payments directly to a card.
The catch: prepaid cards charge fees — sometimes many of them. Activation fees, monthly maintenance fees, ATM withdrawal fees, and balance inquiry fees are all common. Some cards charge you to reload money. Before you buy, compare what you'll actually pay to use it.
Key Takeaways
- Prepaid cards are sold at retail checkout counters, bank branches, and online platforms, with different fee structures at each.
- Retail prepaid cards are fastest to get but often charge the most fees; bank and online options usually cost less per month.
- Some employers and government agencies deposit paychecks and benefits directly onto prepaid cards, which can save you fees if the card is free to use.
- Prepaid cards do not build credit history because they do not report to credit bureaus, so they are not a path to a credit score.
- Always check the fee schedule before buying — activation, monthly maintenance, ATM, and reload fees add up quickly on cards you use often.
Retail stores: fastest but usually most expensive
Walmart, Target, CVS, Walgreens, and other major retailers sell prepaid cards at the checkout counter or customer service desk. You pick one up, pay the activation fee (usually $5 to $10), load money onto it right there, and walk out with a working card in minutes. No application, no waiting for mail.
The tradeoff is cost. Retail prepaid cards often charge a monthly maintenance fee ($5 to $10), ATM fees ($2 to $3 per withdrawal), and sometimes a fee to reload money. If you use the card regularly, these add up. A card you use twice a week for ATM withdrawals could cost you $30 to $50 a month in fees alone.
Retail cards make sense if you need a card today and plan to spend the money quickly rather than hold a balance. They're less practical if you're using the card as your main spending tool for months at a time.
Banks and credit unions: lower fees, more features
Many banks and credit unions offer prepaid cards with lower monthly fees or no monthly fee at all. Some have no ATM fees if you use their ATM network. A few offer small interest on your balance, though the rate is usually very low.
The tradeoff is that you usually need to open an account or meet a minimum balance to get the card, and you may need to provide identification and a Social Security number. This takes longer than buying at a register, but not much — often just a few days for the card to arrive by mail.
If you already bank somewhere, ask whether they offer a prepaid card. If you don't have a bank account, look for credit unions in your area; many have lower fees than national banks and are more willing to work with people rebuilding credit or new to the banking system.
Online platforms: compare fees side by side
Online services like NetSpend, Chime, Varo, and LendingClub offer prepaid cards you can sign up for on their website or app. Most have no monthly fee and no ATM fees within their network. Some offer features like early direct deposit (getting your paycheck one or two days early) or small cash-back rewards.
The catch is that you're trusting a company you can't walk into a branch of if something goes wrong. Read the reviews on independent sites, not just the company's own website. Check whether the company is FDIC-insured — this means your money is protected if the company fails, up to $250,000. The company's website should state this clearly.
Online platforms are worth comparing because their fee schedules are usually transparent and often lower than retail cards. But start with one that has good reviews and clear customer service contact information.
Employer and government payroll cards
Some employers and government agencies (including Social Security, unemployment benefits, and tax refunds) partner with prepaid card providers to deliver payments directly to a card instead of a check or bank transfer. These are sometimes called payroll cards or benefit cards.
The advantage is that the card is often free or very low-cost because the employer or agency subsidizes the fees. The disadvantage is that you have no choice of provider — you get the card they offer, and you may have limited options for withdrawing money without fees.
If your employer or benefits administrator offers a payroll card, ask for the fee schedule before you accept it. Some are genuinely free; others charge fees that eat into your benefit. Compare it to the cost of a regular bank account or online prepaid card before deciding.
What to check before you buy
Every prepaid card has a fee schedule. Before you buy, write down the actual fees you'll pay based on how you plan to use it. A card with a $5 monthly fee and free ATM withdrawals might cost you $60 a year. A card with no monthly fee but $3 ATM fees could cost you $156 a year if you withdraw cash twice a week.
Ask these questions: Is there an activation fee? A monthly maintenance fee? An ATM fee, and does it apply everywhere or only out-of-network? A fee to reload money? A fee to check your balance? A fee to close the account? Some cards charge all of these; others charge none.
Also check whether the card is FDIC-insured. This protects your money if the card company fails. Most major cards are, but not all. The company's website should say so clearly.
Prepaid cards versus other options
A prepaid card is not the only way to spend money without a credit card. A debit card linked to a checking account offers the same spending power with usually lower fees. A secured credit card requires a deposit but reports to credit bureaus and builds your credit score — useful if you're rebuilding credit. A basic checking account at a bank or credit union costs less than a prepaid card if you use it regularly.
If you're considering a prepaid card because you don't have a bank account, a basic checking account might be cheaper in the long run. If you're considering one because you want to control spending, a debit card linked to a checking account does the same thing. If you're rebuilding credit, a secured credit card is a better use of your money because it actually improves your credit score.
Prepaid cards are most useful when you need a card quickly, want to avoid a bank account, or are receiving a paycheck or benefit on a prepaid card your employer or agency chose.
Frequently Asked Questions
Do prepaid cards build credit?
No. Prepaid cards do not report to credit bureaus, so they do not build a credit score. If building credit is your goal, a secured credit card is a better choice — it requires a deposit but reports to all three credit bureaus and helps you establish a credit history.
Can I use a prepaid card to pay bills online?
Yes, most prepaid cards work anywhere a regular debit card works, including online bill payment. Check with the card company to confirm, and be aware that some may charge a fee for certain types of transactions.
What happens if my prepaid card is lost or stolen?
Report it to the card company immediately. Most prepaid cards offer fraud protection similar to debit cards — you're usually not liable for unauthorized charges if you report the loss quickly. The card company will cancel the old card and send you a replacement, though there may be a replacement fee.
Can I get a prepaid card without a Social Security number?
Retail prepaid cards sold at checkout usually require no identification. Online platforms and bank prepaid cards typically require a Social Security number or ITIN (Individual Taxpayer Identification Number). If you don't have either, a retail card is your fastest option, though fees will likely be higher.
Is there a prepaid card with no fees at all?
Some online platforms offer cards with no monthly fee and no ATM fees within their network. However, most charge at least an activation fee or a fee to reload money. Read the full fee schedule carefully — "no monthly fee" does not mean no fees.