A Fee-Free Alternative to Prepaid Debit Cards

August 30, 2017
Prepaid debit cards are a good option for people who do not have a standard checking account or who have difficulty being approved for a credit card. With a prepaid card, they can enjoy the same conveniences that they would get with a regular credit or debit card.
A Fee-Free Alternative to Prepaid Debit Cards

The problem with prepaid debit cards is that the people who use them often get hit with fees. If you use these cards, you may have to pay a fee every time you load money onto the card. Also, monthly maintenance fees are quite common for prepaid cards. You may be able to avoid some of these fees by doing things like setting up direct deposit or loading the card from an established bank account. Even then, maintenance fees, check-writing fees or bill-pay fees may prove harder to avoid.

What is a viable alternative to prepaid debit cards?

Gift cards are a good alternative to prepaid debit cards. The catch, obviously, is that you have to buy gift cards for each different store that you shop at. However, these cards come with some good benefits. Here are the positive attributes of gift cards and the main reasons why you should consider giving yourself gift cards instead of prepaid debit cards.

  • First of all, you can use them online. This is one of the main reasons that people get prepaid debit cards. Let’s look at an example: you could buy an Amazon gift card with cash and then use it to make online purchases. The main advantage of this is that there are usually no extra fees associated with gift cards.
  • You can load up gift cards for no extra fees. Also, these cards do not have monthly maintenance fees (unless you hold the balance for several years). This is a major advantage compared to prepaid debit cards, and it could make up for the fact that you have to purchase a different gift card for each store that you plan to shop at.
  • Promotional offers can save you money. Occasionally, you may be able to get extra money loaded on your gift card or get a separate gift card for free when you load money onto the primary card. These offers are popular around the holiday season when stores want to entice people to purchase gift cards.
  • Vendors on reputable third party reselling sites may sell cards for less than their total value. For example, the card may be worth $100, but the seller will list it at $95 in order to sell it quickly.

What about credit card alternatives?

Online personal loans are actually more of an alternative to credit cards than prepaid debit cards, but they come with significant advantages. First of all, online money suppliers look at your bank account and pay stubs, not at your credit score. This makes them ideal for people who use prepaid cards and cash instead of standard banking and credit options. Also, since the approval process takes a matter of hours, online loans are very convenient (much more convenient than applying for a new credit card).

Gift cards and online personal loans offer ways to avoid the fees associated with prepaid debit cards and the inconveniences of applying for credit cards.