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Best prepaid cards of November 2020

CNBC Select rounded up the best prepaid cards that can help parents teach their kids about money and come in handy if you overspend with cash or credit.

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Prepaid cards are a relatively simple way for you to pay for purchases without opening a credit card or bank account. Plus, they work similar to a debit card in that you can use a prepaid card to pay bills, set up direct deposit and use mobile check deposit. You'll even receive the same $250,000 FDIC insurance that protects your deposits if your bank fails.

One reason to opt for a prepaid card over other forms of plastic is that it's a relatively low-risk way to manage your money. Parents can use prepaid cards as a way to teach their kids about money before making them an authorized user on their credit card. And if you struggle to stick to a budget, you can use a prepaid card to help monitor your spending, with the goal of eventually graduating to a credit or debit card.

If you're interested in opening a prepaid card, there are wide variety to choose from. To help make the process easier, CNBC Select rounded up the best prepaid cards, and below we've broken down everything you need to know before you sign up. (See our methodology for more information on how we chose the cards.)

Best prepaid cards

FAQs

Best prepaid card with no monthly fee

Bluebird® by American Express

Bluebird® by American Express
Information about the Bluebird® by American Express has been collected independently by CNBC and has not been reviewed or provided by the issuer of the card prior to publication.
  • Card opening fee

    Up to $5 in stores, $0 online

  • Monthly fee

    None

  • Maximum balance

    $100,000

  • Cash reload fee

    $0 at Walmart, up to $3.95 at other retailers

  • ATM withdrawal fee

    $0 in-network at MoneyPass® ATMs; otherwise $2.50 per withdrawal, plus ATM operator fee

  • Foreign transaction fee

    None

  • Rewards

    N/A

  • Mobile check deposit

    Yes

See our methodology, terms apply.

Pros

  • No card opening fee when you open an account online
  • No monthly fees
  • No fee on purchases made outside the U.S.
  • Get your paycheck up to 2 days faster when you sign up for direct deposit
  • Ability to create family accounts and manage kids' spending

Cons

  • Up to $5 card opening fee at retailers
  • Bluebird® is not available to Vermont residents

Best prepaid card with limited fees

Starbucks® Rewards Visa® Prepaid Card

Starbucks® Rewards Visa® Prepaid Card
Information about the Starbucks® Rewards Visa® Prepaid Card has been collected independently by CNBC and has not been reviewed or provided by the issuer of the card prior to publication.
  • Card opening fee

    None

  • Monthly fee

    None

  • Maximum balance

    $10,000

  • Cash reload fee

    N/A

  • ATM withdrawal fee

    N/A

  • Foreign transaction fee

    3%

  • Rewards

    1 Star per $10 spent

  • Mobile check deposit

    No

See our methodology, terms apply.

Pros

  • No card opening fee
  • No monthly fees
  • You can link to your Starbucks Rewards program
  • Earn 150 bonus Stars after you use your Starbucks® Rewards Visa® Prepaid Card to add a minimum of $10 to your Starbucks account

Cons

  • You can't make withdrawals at an ATM
  • 3% fee on purchases made outside the U.S.

Best prepaid card for cash back

American Express Serve® Cash Back

American Express Serve® Cash Back
Information about the American Express Serve® Cash Back has been collected independently by CNBC and has not been reviewed or provided by the issuer of the card prior to publication.
  • Card opening fee

    Up to $3.95 in stores, $0 online

  • Monthly fee

    $7.95; no fee for Texas, New York and Vermont residents

  • Maximum balance

    $100,000

  • Cash reload fee

    Up to $3.95

  • ATM withdrawal fee

    $0 in-network at MoneyPass® ATMs; otherwise $2.50 per withdrawal, plus ATM operator fee

  • Foreign transaction fee

    2.7%

  • Rewards

    Unlimited 1% cash back on purchases

  • Mobile check deposit

    Yes

See our methodology, terms apply.

Pros

  • Unlimited 1% cash back on purchases
  • No card opening fee when you open an account online
  • Get your paycheck up to 2 days faster when you sign up for direct deposit

Cons

  • Up to $3.95 card opening fee at retailers
  • $7.95 monthly fee (except for Texas, New York and Vermont residents)
  • 2.7% fee on purchases made outside the U.S.
  • Mobile check deposit can take up to 10 days

Best prepaid card for cash reloads

American Express Serve® FREE Reloads

American Express Serve® FREE Reloads
Information about the American Express Serve® FREE Reloads has been collected independently by CNBC and has not been reviewed or provided by the issuer of the card prior to publication.
  • Card opening fee

    Up to $3.95 in stores, $0 online

  • Monthly fee

    $6.95; no fee for Texas, New York and Vermont residents

  • Maximum balance

    $100,000

  • Cash reload fee

    $0 at over 45,000 retailers, including Walmart, CVS/pharmacy, Rite Aid, Dollar General, Family Dollar and participating 7-ELEVEN locations

  • ATM withdrawal fee

    $0 in-network at MoneyPass® ATMs; otherwise $2.50 per withdrawal, plus ATM operator fee

  • Foreign transaction fee

    2.7%

  • Rewards

    N/A

  • Mobile check deposit

    Yes

See our methodology, terms apply.

Pros

  • $0 cash reload fee at over 45,000 locations including CVS/pharmacy®, Dollar General®, Family Dollar®, Rite Aid®, Walmart® and participating 7‑ELEVEN® locations
  • No card opening fee when you open an account online
  • Get your paycheck up to 2 days faster when you sign up for direct deposit

Cons

  • Up to $3.95 card opening fee at retailers
  • $6.95 monthly fee (except for Texas, New York and Vermont residents)
  • 2.7% fee on purchases made outside the U.S.
  • Mobile check deposit can take up to 10 days

Best prepaid card for families

FamZoo Prepaid Card

FamZoo Prepaid Card
Information about the FamZoo Prepaid Card has been collected independently by CNBC and has not been reviewed or provided by the issuer of the card prior to publication.
  • Card opening fee

    $0 for first 4 cards, then $3 for each additional card

  • Monthly fee

    $5.99 (or as low as $2.50 if you prepay for 24 months in advance)

  • Maximum balance

    $5,000

  • Cash reload fee

    $4 to $6

  • ATM withdrawal fee

    None, but the ATM operator may charge a fee

  • Foreign transaction fee

    None

  • Rewards

    N/A

  • Mobile check deposit

    No

See our methodology, terms apply.

Pros

  • Great way for parents to teach kids about money
  • Parents can control kids' spending, set up automatic recurring transfers (i.e. allowance), lock and unlock cards
  • No card opening fee for the first 4 cards (then $3 per card)
  • No fee on purchases made outside the U.S.

Cons

  • Up to a $5.99 monthly fee
  • $3 card opening fee after your first 4 cards
  • No mobile check deposit

Best prepaid card for Walmart shoppers

Walmart MoneyCard

Walmart MoneyCard
Information about the Walmart MoneyCard has been collected independently by CNBC and has not been reviewed or provided by the issuer of the card prior to publication.
  • Card opening fee

    $1

  • Monthly fee

    $5.94; waived when you load $1,000 or more to your card in the previous monthly period

  • Maximum balance

    $7,500

  • Cash reload fee

    $0 at Walmart, up to $5.95 at other retailers

  • ATM withdrawal fee

    $2.50 per withdrawal, plus ATM operator fee

  • Foreign transaction fee

    3%

  • Rewards

    Earn 3% cash back at Walmart.com and in the Walmart app, 2% cash back at Walmart fuel stations, and 1% cash back at Walmart stores, up to $75 each year.

  • Mobile check deposit

    Yes

See our methodology, terms apply.

Pros

  • Earn rewards on all your Walmart purchases
  • Get your paycheck up to 2 days before payday and your benefits up to 4 days before benefits day with ASAP Direct Deposit™
  • Get cards for family members ages 13 and up
  • Low card opening fee
  • Monthly fee is waived when you load $1,000 or more to your card in the previous monthly period

Cons

  • $5.94 monthly fee (unless you meet the waiver requirements)
  • 3% fee on purchases made outside the U.S.

Best prepaid card for PayPal users

PayPal Prepaid Mastercard®

PayPal Prepaid Mastercard®
Information about the PayPal Prepaid Mastercard® has been collected independently by CNBC and has not been reviewed or provided by the issuer of the card prior to publication.
  • Card opening fee

    Up to $4.95 in stores, $0 online

  • Monthly fee

    $4.95

  • Maximum balance

    $15,000

  • Cash reload fee

    Up to $3.95

  • ATM withdrawal fee

    $2.50 per withdrawal, plus ATM operator fee

  • Foreign transaction fee

    4%

  • Rewards

    N/A

  • Mobile check deposit

    Yes

See our methodology, terms apply.

Pros

  • Easily integrates with your PayPal account
  • You may receive special offers and rewards when you shop at qualifying stores
  • No card opening fee when you open an account online

Cons

  • $4.95 card opening fee at retailers
  • $4.95 monthly fee
  • 4% fee on purchases made outside the U.S.
  • This card is not available in Vermont

What is a prepaid card?

Similar to a gift card, you add value to the prepaid card before you can use it, which is essentially like prepaying for future purchases. But prepaid cards come with a few more bells and whistles, like the ability to set up direct deposit and check your balance on a mobile app. They also require more attention since you can incur fees for simply having a card or reloading it with more cash.

Prepaid cards can be used to make purchases and pay bills, just like debit or credit cards. They are accepted nearly everywhere since they are often backed by a major card network, such as Visa, Mastercard or American Express.

Issuers won't do a credit check when you open a prepaid card, but you also don't build a credit history when you use one.

One disadvantage of using a prepaid card is that you can only complete transactions up to the amount you have loaded onto it. If you add $200 to your prepaid card, you can only spend up to $200. Any purchases you attempt to make exceeding $200 will be declined until you load more money onto your card.

Additionally, there's often a cap on how much money you can have on your card. The cards on this list have limits ranging from $5,000 to $100,000. That said, the cap is generally pretty similar to a credit limit on a credit card.

Do prepaid cards come with fees?

Before you open a prepaid card, it's important to understand what fees may be associated with them. Most prepaid cards charge monthly maintenance fees around $10, which is similar to checking account fees that can cost up to $15 a month. But you may also pay a fee to open your prepaid card, typically around $5.

You can also expect to incur an ATM fee, reload fee and foreign transaction fee with many prepaid cards.

The PayPal Prepaid Mastercard® can cost up to $4.95 to purchase the card ($0 if you get the card online) and charges you $4.95 a month to use the card. You may also incur ATM withdrawal fees of $2.50, check deposit fees ranging from $0 to 5% of the total check amount and a 4% fee on purchases made outside the U.S.

There are options out there with minimal fees. Bluebird® by American Express has no card opening fee when you open an account online (otherwise it costs up to $5), no monthly fee and no foreign transaction fees.

While there's typically no minimum balance requirement, you could get stuck paying a monthly fee you regardless of your balance. Make sure you're familiar with your card's terms of service and reach out directly to your card issuer for more information.

Where to get a prepaid card

You can often find prepaid cards at checkout lanes when you’re at the supermarket or retailers like Walmart, typically next to gift cards. When you get a prepaid card in-store, you’ll often incur a card opening fee around $5.

As a cheaper alternative, opt to get a card online, which is often free.

How to add money to a prepaid card

You can load money onto your prepaid card in a variety of ways, including:

  • Direct deposit
  • Cash at the register at participating retailers
  • Transfer from checking or savings accounts
  • Mobile check deposit

You can check your account balance online, via your card issuers' mobile app or over the phone.

When you should get a prepaid card

Prepaid cards are a good option for parents who want to give their kids spending money without handing them cash that could potentially get lost. You can request a new prepaid card if it goes missing, and many card issuers allow you to lock your card to prevent unauthorized use.

And since you can incur overdraft fees with a debit card or quickly run up a balance on a credit card, a prepaid card can help you limit your kids’ spending to the amount loaded on the card.

Choosing a prepaid card could be a good choice for you if you have a history of overspending. A prepaid card might be a better alternative than a debit or credit card, as it can force you to stick to a budget by declining purchases that exceed the balance in your account. But make sure it makes financial sense. Even though you're saving on potential interest charges or overdraft fees, the monthly fees on a prepaid card can get very expensive, too. If you decide that using a prepaid card makes it easier for you to manage your finances, make sure to sign up for a no-fee card.

How to cancel a prepaid card

When you decide that you no longer want your prepaid card, whether that's because you're opting for credit or debit, you'll need to take some action. You can't just forget about the card because you could still incur monthly fees.

In order to cancel a prepaid card, you'll first need to withdraw all of the money currently in your account. You can typically withdraw money at an ATM, through a transfer to another account or by requesting a check. Once your balance reaches $0, you can call your card issuer to cancel your account.

Our methodology

To determine the best prepaid cards on the market, CNBC Select analyzed and compared 11 cards that offer benefits to individuals and families who are looking for an alternative to credit cards and debit cards to manage their money.

When ranking the best prepaid cards, we focused on the following features:

  • Card opening fee of $5 or less, but even better if you can get the card online for free
  • Monthly fees under $10
  • Variety of ways to add money
  • Ease of use
  • Perks, like rewards and free family accounts
  • Mobile app

Keep in mind that while prepaid cards are an alternative to credit and debit, they won't help you build credit. In order to establish a credit history, you need to regularly use a credit card responsibly, paying your bills on time and in full every month. And if you want an easy way to deposit and withdraw money for daily transactions, consider opening a checking account with a linked debit card so you can avoid ATM charges.

Don't miss: Our roundups of the best credit cards, no-fee checking accounts, credit monitoring services and credit unions.

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the CNBC Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.