Prepaid cards are sold at retailers, banks, and online — but the fees and features vary widely
You can buy a prepaid card at a drugstore checkout, a grocery store, a bank branch, or online. The card itself costs nothing to purchase, but you pay fees when you load money onto it, when you use it, and sometimes just for having it. The real choice is not where to buy, but which card to buy — because a card with high fees can cost you $100 or more per year on a $1,000 balance, while a low-fee card on the same balance costs almost nothing.
Prepaid cards sit between cash and a traditional bank account. You load your own money onto the card, then spend it like a debit card. Unlike a credit card, you cannot borrow money or build credit history. Unlike a checking account, you may not have the same fraud protections, and fees can be steep. The main reason to choose a prepaid card is that you do not need a bank account or a credit check to get one.
Key Takeaways
- Prepaid cards are sold at retail chains like Walmart and CVS, at banks, and through online providers, but the same brand card may have different fees depending where you buy it.
- Monthly maintenance fees, ATM withdrawal fees, and per-transaction fees add up quickly — compare the fee schedule before you buy, not after.
- Some prepaid cards offer no monthly fee if you set up direct deposit, which can save you $60 to $120 per year.
- Bank-issued prepaid cards often have stronger fraud protection and lower fees than retail-brand cards, but require you to visit a branch or explore online.
Retail stores and pharmacy chains
Walmart, Target, CVS, Walgreens, and similar stores sell prepaid cards at the checkout or customer service desk. The cards are usually displayed near gift cards. You pick one up, load money onto it at the register or online, and use it when ready. The advantage is convenience — you can buy and load a card in the same trip where you buy groceries.
The disadvantage is fees. Retail prepaid cards often charge $4.95 to $9.95 per month just to hold the card, plus $2 to $3 per ATM withdrawal, plus fees for customer service calls or balance checks. A card you use only occasionally can cost more in fees than the money you spend on it. Before you buy at a retail register, ask to see the fee schedule or look it up online — the card package usually lists a website where you can review all costs.
Banks and credit unions
Many banks and credit unions offer their own prepaid cards, sometimes called "reloadable debit cards" or "payroll cards." You open the card at a branch or online, link it to a bank account if you have one, and load money through direct deposit, bank transfer, or cash deposit at a branch. Bank-issued cards typically have lower monthly fees — often $0 to $5 — and lower ATM fees than retail cards.
The catch is that you usually need to set up direct deposit to avoid the monthly fee, which means your paycheck or benefits payment has to go to the card account. If you do not have direct deposit, the monthly fee applies. Credit unions sometimes offer better rates than banks, so call your local credit union first if you are a member or may be able to access to join.
Online prepaid card providers
Companies like NetSpend, Chime, and Varo sell prepaid cards online and deliver them by mail. You create an account, verify your identity, and load money through bank transfer or direct deposit. Many online providers have no monthly fee if you set up direct deposit, and some offer small interest on your balance — which retail and bank cards do not.
The downside is that you cannot load cash without a bank account, and customer service is usually phone or email only, not in person. If you need to load cash frequently, an online card may not work for you. If you have a bank account and direct deposit, online cards are often the cheapest option.
What to compare before you buy
Every prepaid card charges different fees, so the card you buy matters more than where you buy it. Write down the monthly maintenance fee, the ATM withdrawal fee, the fee for customer service calls, and the fee for balance checks or transfers. Add them up for a month of typical use — if you withdraw cash twice a month and check your balance once a week, calculate what that costs.
Look for cards with no monthly fee if you use direct deposit, because that single feature can save you $60 to $120 per year. Check whether the card lets you load cash without a bank account, because some online cards do not. Read the fraud policy — some prepaid cards offer the same protection as a bank debit card, while others offer less. The card's website or the package insert will list this information.
Prepaid cards versus other options
If you have a bank account, a regular debit card costs less and offers more protection than a prepaid card. If you do not have a bank account, a prepaid card is cheaper than a checking account with overdraft fees, but a second-chance bank account (offered by some banks and credit unions for people with bad credit or no credit history) may be cheaper still. Some second-chance accounts have no monthly fee and no overdraft fees because you cannot overdraw them.
If you are trying to rebuild credit, a prepaid card will not help — it does not report to credit bureaus. A secured credit card, which requires a cash deposit but does report to credit bureaus, is a better choice if you can afford the deposit and the monthly fee. A prepaid card is best if you need a way to spend money without a bank account and without building debt.
How to avoid overpaying for a prepaid card
Before you hand over money, read the fee schedule all the way through. Many people buy a card, load $100, and then lose $15 to $20 in fees over three months without realizing it. The card issuer is not hiding the fees — they are in the terms and conditions — but they are straightforward to miss at the register.
If you find a card you like but the fees are high, check whether the issuer offers a lower-fee version. NetSpend, for example, sells cards at Walmart with different fee structures than the same card sold online. A card with direct deposit might have no monthly fee, while the same card without direct deposit costs $9.95 per month. Ask the cashier or check the issuer's website to see all versions available.
Frequently Asked Questions
Can I load a prepaid card with cash at any store?
Not all cards accept cash loads at all stores. Retail-brand cards (Walmart, Target, CVS) usually let you load cash at their own stores and sometimes at other retailers. Bank and online cards often require bank transfer or direct deposit. Check the card's website or ask before you buy whether you can load cash and where.
Do prepaid cards report to credit bureaus?
No. Prepaid cards do not report your payment history to credit bureaus, so using one will not build your credit score. If you are trying to rebuild credit, a secured credit card is a better choice because it reports to the bureaus and helps you establish a positive payment history.
What happens if my prepaid card is lost or stolen?
Most prepaid cards offer fraud protection similar to a debit card — you report the loss, the card is frozen, and you get your money back if the loss was not your fault. The timeline and exact protections vary by card, so read the terms before you buy. Some cards offer stronger protection than others.
Can I use a prepaid card to pay bills online?
Yes, most prepaid cards have a card number and expiration date, so you can use them anywhere a debit card works — online, by phone, or in stores. Some cards also let you set up automatic bill payments. Check the card's website to see which payment methods it supports.
Is there a prepaid card with no fees at all?
Most cards charge at least some fees, but several cards have no monthly maintenance fee if you set up direct deposit. NetSpend, Chime, and some bank prepaid cards fall into this category. However, they may still charge ATM fees or fees for other services, so compare the full fee schedule.