Where to buy a prepaid card and what to expect
You can buy a prepaid card at most major retailers, banks, and online platforms. The most common places are Walmart, Target, CVS, Walgreens, and your own bank if it offers them. You can also order prepaid cards directly from card issuers like NetSpend, Green Dot, Chime, and Gobank through their websites. The process is straightforward: you choose the card, pay the purchase price (which includes the card itself and sometimes an initial load fee), and load money onto it when ready or later.
The card arrives ready to use if you buy it in-store, or it ships to your address if you order online. Most prepaid cards work like debit cards at any merchant that accepts Visa or Mastercard. You load money onto the card before you spend it, so you cannot go into debt. There are no credit checks, no approval process, and no waiting period — you own the card as soon as you pay for it.
Key Takeaways
- Prepaid cards are sold at retailers and banks with no credit check or approval needed; you pay for the card upfront and load money onto it yourself.
- Fees vary widely by card and issuer, including purchase fees, monthly maintenance fees, ATM withdrawal fees, and inactivity fees that can add up quickly.
- You should compare cards by their fee structure, not just the purchase price, because a cheap card upfront can cost more over time if you use it regularly.
- Prepaid cards do not build credit history because they are not credit products — they are spending accounts funded with your own money.
- Some prepaid cards offer direct deposit, bill pay, and other banking features that make them useful for budgeting or keeping money separate from a main account.
Understanding the fee structure before you buy
Every prepaid card charges fees, and they vary significantly between issuers. The most common fees are the purchase price (usually $5 to $15), monthly maintenance fees ($2 to $10), ATM withdrawal fees ($1 to $3 per withdrawal), and inactivity fees that kick in if you do not use the card for 90 days or longer. Some cards also charge fees for balance inquiries, customer service calls, or loading money onto the card.
The card that costs the least to buy is often not the cheapest to own. A card with a $5 purchase price but a $10 monthly fee will cost you $120 per year in maintenance alone if you keep it active. A card with a $15 purchase price but no monthly fee might be cheaper over time. Read the fee schedule before you buy — most issuers publish this information on their website or on the card packaging in-store. Add up the fees you expect to pay based on how you plan to use the card: if you withdraw cash twice a month, multiply that by the ATM fee and add it to the annual maintenance cost.
How to load money onto your card
You can load money onto a prepaid card in several ways. At the point of sale, you can load it when ready with cash or a debit card. After purchase, you can add money through direct deposit from your employer or bank account, by transferring funds from another bank account online, by visiting a retail location and paying cash, or by having someone else send you money through the card issuer's app or website.
Direct deposit is often the cheapest way to load money because many issuers waive or reduce fees if you set up recurring deposits. Some cards offer a small bonus or cash back for using direct deposit. If you load money in-store with cash, you may pay a fee each time. Loading through a bank transfer usually costs nothing but may take one to three business days. Check your card issuer's app or website to see which loading methods are available and whether any carry fees.
Prepaid cards versus other spending options
Prepaid cards are different from debit cards, credit cards, and secured credit cards, and each serves a different purpose. A debit card is tied to a bank account you already own and typically has lower fees. A credit card lets you borrow money and build credit history, but you pay interest if you carry a balance. A secured credit card requires a cash deposit but is designed to help you build credit over time by reporting your payment history to credit bureaus.
A prepaid card is best if you want to spend only money you have on hand, do not have a bank account, or want to keep spending separate from your main finances. It does not help you build credit because prepaid transactions are not reported to credit bureaus. If your goal is to build credit history, a secured credit card is a better choice despite the higher upfront cost. If you already have a bank account, a debit card will usually cost less in fees. Prepaid cards work well for budgeting, travel, or giving money to someone without opening a joint account.
What happens if you lose your prepaid card
If your prepaid card is lost or stolen, contact the issuer when ready. Most prepaid card issuers will freeze the card to prevent unauthorized use, similar to what happens with a debit or credit card. You can usually report the loss through the issuer's app, website, or customer service phone number. The issuer will typically issue a replacement card and transfer your remaining balance to it.
The speed of replacement and whether you pay a fee depends on the issuer. Some replace cards within one to two business days at no charge; others charge $5 to $15 and take longer. Check your card's terms before you buy to understand the replacement policy. Keep your card number, expiration date, and the issuer's customer service number in a safe place separate from the card itself so you can report a loss quickly. Unlike a credit card, a prepaid card has no fraud protection for unauthorized charges made before you report it lost, so speed matters.
Prepaid cards and tax reporting
If you use a prepaid card to receive income — such as wages from an employer or payments from a gig work platform — the issuer may be required to report that income to the IRS on a Form 1099-B or similar document. This depends on the amount and type of income. Employer direct deposits are reported by your employer on a W-2, not by the card issuer, so the card itself does not trigger additional reporting.
If you receive payments from a third party through the card (such as freelance income or payments from a payment app), the issuer may report transactions over a certain threshold. Keep records of all income you receive on the card and report it on your tax return regardless of whether you receive a form from the issuer. If you have questions about whether your specific use of the card triggers reporting requirements, contact the card issuer or speak with a tax professional.
Frequently Asked Questions
Can I use a prepaid card to pay bills online?
Most prepaid cards can be used anywhere Visa or Mastercard is accepted, including online bill payment. However, some merchants or billers may decline prepaid cards because they cannot verify your identity the way they can with a bank account. If a biller declines your prepaid card, you can try paying through their website directly or calling their customer service line to pay over the phone.
Do prepaid cards build credit?
No. Prepaid cards are not credit products — they are accounts funded with your own money. Prepaid transactions are not reported to credit bureaus, so they do not affect your credit score or build credit history. If building credit is your goal, consider a secured credit card instead, which requires a deposit but reports your payment history to credit bureaus.
What is the difference between a prepaid card and a gift card?
A gift card is typically issued by a specific retailer and can only be spent at that retailer or its partners. A prepaid card is issued by a bank or payment company and works like a debit card at any merchant that accepts the card brand (Visa, Mastercard, etc.). Prepaid cards also allow you to load and reload money yourself, while gift cards are usually loaded once by the purchaser.
Can I withdraw cash from a prepaid card at an ATM?
Yes, most prepaid cards allow ATM withdrawals, but each withdrawal usually costs a fee ($1 to $3 per transaction). Some cards offer a limited number of free ATM withdrawals per month or waive fees at ATMs owned by partner banks. Check your card's fee schedule to understand the ATM costs before you buy, especially if you plan to withdraw cash frequently.
What if I do not use my prepaid card for a long time?
Many prepaid cards charge an inactivity fee if you do not use the card for 60 to 90 days or longer. This fee is typically $2 to $5 per month and continues until your balance reaches zero or you use the card again. Some cards waive inactivity fees if you set up direct deposit or meet other conditions. Read your card's terms to understand the inactivity policy and whether you can avoid the fee.