Where prepaid cards come from and why you'd use one
A prepaid card is a plastic card you load money onto in advance, then spend down like a debit card. You can buy one at a retail store, open one online through a bank or fintech company, or receive one from an employer or government program. Unlike a credit card, a prepaid card does not build credit history because you are spending your own money, not borrowing.
People use prepaid cards for different reasons. Some use them to budget — loading a set amount each week makes overspending harder. Others use them because they cannot open a traditional bank account or credit card due to past banking problems or no credit history. Some employers and government programs (like unemployment or tax refunds) load money directly onto prepaid cards instead of mailing checks.
The tradeoff is real: prepaid cards charge fees that a checking account usually does not. Monthly maintenance fees, ATM fees, and reload fees add up. But if you are trying to rebuild credit or just need a way to spend money safely without a bank account, knowing where to get one matters.
Key Takeaways
- Prepaid cards are sold at retail stores like Walmart and CVS, online through banks and fintech companies, and sometimes issued directly by employers or government programs.
- Retail prepaid cards (like Green Dot or NetSpend) are fast to buy but often charge monthly fees; bank-issued prepaid cards may have lower fees but require online setup.
- Some prepaid cards report to credit bureaus if you link them to credit-building features, but most do not build credit on their own.
- Fee structures vary widely — compare monthly maintenance costs, ATM fees, and reload fees before choosing, because they can cost $100 or more per year.
Retail stores: the fastest way to get a prepaid card today
You can walk into Walmart, Target, CVS, Walgreens, or most grocery stores and buy a prepaid card off the shelf. Common brands include Green Dot, NetSpend, Vanilla Visa, and AccountNow. The card itself costs $0 to $10, and you load money onto it at the register or online right away.
The advantage is speed and no credit check. You do not need a bank account or good credit history. The disadvantage is fees. Most retail prepaid cards charge a monthly maintenance fee (typically $5 to $10), plus fees for ATM withdrawals, customer service calls, or reloading money. If you use the card lightly or only for online shopping, you might pay more in fees than you spend.
Read the fee schedule before you buy. Some cards waive the monthly fee if you load a minimum amount each month (often $500 or more), or if you set up direct deposit. Others charge per transaction. The card's packaging or the store's website will show the fee structure, though you may need to scan a QR code or visit the issuer's website to see the full list.
Banks and online fintech companies: lower fees, more setup time
Traditional banks and newer fintech companies (like Chime, LendingClub, or Varo) offer prepaid cards online. You create an account on their website or app, verify your identity, and the card arrives by mail in 5 to 10 business days. Some offer instant digital cards you can use before the physical card arrives.
These cards often have lower or no monthly fees, especially if you set up direct deposit. Chime and similar services market themselves as checking account replacements and charge no monthly maintenance fee. However, they still charge ATM fees at out-of-network machines, and some charge fees for overdrafts or expedited shipping.
The tradeoff is time and identity verification. You will need to provide your Social Security number, date of birth, and address. The company runs a soft credit check (which does not hurt your credit score) and may check ChexSystems, a banking history database. If you have been flagged in ChexSystems for unpaid overdrafts or fraud, some banks will decline you. If you need a card today, this route does not work.
Employer and government programs: prepaid cards you do not choose
Some employers offer payroll cards — prepaid cards that receive your paycheck automatically. Some government programs (unemployment insurance, tax refunds, pandemic relief payments) load money onto prepaid cards instead of mailing checks or depositing to a bank account.
You do not shop for these cards; they are issued to you. The advantage is that direct deposit is automatic, so you avoid reload fees. The disadvantage is you have no choice in the card or its fees. Payroll cards sometimes charge high ATM fees or maintenance fees that eat into your paycheck. Before accepting a payroll card, ask your employer what the fee schedule is and whether you can choose direct deposit to your own bank account instead.
If you receive a government prepaid card (for unemployment or a tax refund), the issuer is usually listed in the letter or email you receive. You can call that issuer to ask about fees before you activate the card. Some government-issued cards have lower fees or fee waivers for direct deposit or frequent use.
Credit-building prepaid cards: a path to credit history
A few prepaid card companies partner with credit bureaus to report your payment history. Self, Chime, and some cards from traditional banks offer this feature. You load money onto the card, spend it, and the issuer reports your on-time payments to Equifax, Experian, or TransUnion.
This is not the same as a credit card — you are not borrowing money. But if the issuer reports to credit bureaus, your payment history can help build a credit score from zero. This matters if you are rebuilding after a bankruptcy or have no credit history at all.
Not all prepaid cards do this. You have to look for the phrase "reports to credit bureaus" or "credit-building" in the card's marketing materials. Even then, the benefit is modest — you are building a record of spending your own money, not borrowing and repaying. A secured credit card (which requires a deposit but is an actual credit product) usually builds credit faster.
Comparing fees across prepaid card options
| Card Type | Where to Get It | Setup Time | Typical Monthly Fee | ATM Fee |
|---|---|---|---|---|
| Retail prepaid (Green Dot, NetSpend) | Walmart, CVS, Walgreens, grocery stores | Same day | $5–$10 (waived with direct deposit or $500+ monthly load) | $1.50–$3 out-of-network |
| Bank prepaid (Chime, Varo) | Online application | 5–10 business days | $0 (usually) | $0 in-network; $2–$3 out-of-network |
| Payroll card | Employer issues it | Varies | $0–$10 | Varies; often $1.50–$2.50 |
| Government-issued card | Government program | Varies | $0–$5 | $0–$2 |
Fees are the biggest difference between options. A retail card with a $10 monthly fee and $2 ATM fees can cost $120 to $150 per year if you use it regularly. A bank prepaid card with no monthly fee and free in-network ATM access costs much less. However, if you need a card immediately and do not have time for a 10-day mail delivery, the retail card is worth the extra cost.
The choice depends on your situation. If you need cash today and do not mind paying fees, buy a retail card. If you have time to wait and want to minimize costs, open a bank prepaid card online. If your employer or a government program offers one, compare its fees to the other options before deciding whether to use it.
What to check before you buy or open a prepaid card
Before committing to any prepaid card, look up the fee schedule on the issuer's website. Most issuers are required to disclose fees clearly, though the information may be buried in a PDF or terms document. Check for: monthly maintenance fee, ATM withdrawal fee (both in-network and out-of-network), reload fee, customer service fee, overdraft fee, and inactivity fee (charged if you do not use the card for several months).
Ask whether the monthly fee is waived if you set up direct deposit or load a minimum amount each month. This can make a $10 monthly fee disappear if your paycheck or benefits go straight to the card. Also check whether the card has a network of free ATMs — Chime and some others partner with ATM networks so you can withdraw cash without fees at thousands of locations.
If you are considering a credit-building card, verify that the issuer actually reports to credit bureaus. Call the customer service number or check the website for the phrase "reports to credit bureaus" or "credit-building." Do not assume it does. Read customer reviews on independent sites to see whether people have had problems with the issuer's customer service or unexpected fees.
Frequently Asked Questions
Can I use a prepaid card to build credit?
Only if the issuer reports to credit bureaus, which most prepaid cards do not. Some cards marketed as "credit-building" do report your payment history. Call the issuer or check their website to confirm. Even if it does report, building credit with a prepaid card is slower than using a secured credit card, which is an actual credit product.
What happens if I lose my prepaid card?
Call the issuer's customer service number (usually on the back of the card or the website) to report it lost or stolen. Most issuers will freeze the card immediately and reissue a new one. You may be charged a replacement fee ($5 to $15), though some waive it. Any money on the card is protected once you report it.
Can I get a prepaid card if I have been declined for a bank account?
Retail prepaid cards have no credit check or ChexSystems check, so you can buy one even if you have been declined for a bank account. Bank-issued prepaid cards may check ChexSystems and decline you if you have unpaid overdrafts or fraud flags. If that happens, a retail card is your option.
Do I need a Social Security number to get a prepaid card?
Retail cards sold in stores do not require a Social Security number at purchase, though you may need one to load money online or set up direct deposit later. Bank-issued prepaid cards require a Social Security number during signup. If you do not have one, a retail card is your only option.
What is the difference between a prepaid card and a debit card?
A debit card is linked to a bank account and draws from money already there. A prepaid card is standalone — you load money onto it and spend it down. Prepaid cards do not require a bank account, but they charge more fees. Debit cards offer more fraud protection under federal law, while prepaid card protections vary by issuer.