What’s a prepaid debit card? You’ve heard of debit cards and credit cards, but this is different. This card can help you stick to a budget and limit your spending.

Prepaid Debit Card
A credit card offers you access to credit that you can pay back later. A regular debit card gives you access to all the money in your checking account. A prepaid debit card is funded by money you load onto the card through a variety of means. You can only spend the amount that is loaded on the card. A prepaid debit card is not linked to a bank account.

Prepaid Debit Cards and Fees
Prepaid debit cards can involve different fees. There’s an activation fee, monthly fee, card loading fee, cash withdrawal fee, and fee for withdrawal at out of network ATMs. Look for cards with a minimal number of fees, a large network of ATMs, and cash loading centers. Most cards don’t charge for purchases. But there are some that do.

No Fee Prepaid Card?
If you get a prepaid card that doesn’t charge a regular fee, it might end up costing you more in charges for cash withdrawals or when you load cash to the card. There is generally an activation fee on most cards. Look for cards with monthly fees that help you avoid transaction fees for cash loading, purchase, or cash withdrawal.
With a lot of cards, monthly fees can be waived if you load cash through direct debit. The fee may also be waived if you load at least $750 or more. Check the terms and choose according to your usage.
Most of these cards are from issuers who have a large network of ATMs and partner shops. These are places where you can load cash for free. But there’s always the option to load cash through direct debit.
Some prepaid debit cards have a savings facility. You can set aside some money that you load into the card in a savings section. This can’t be accessed when you’re trying to withdraw or make a purchase. The bonus of this is that you can earn interest on the money that you’re locking in. But there are only a few cards that have this facility.
Many prepaid debit cards come with usage tracking facilities. Expenses can be separated into different categories and you can track how the money is spent.
There’s also a Cash Back prepaid debit card, the only one of its kind, the American Express Serve Cash Back. This card gives you 1% cashback on all purchases. It also comes with purchase protection.

Why Use Prepaid Debit Cards?
If you don’t have a good financial record and thus, can’t get a credit card, you can use prepaid debit cards for cash-free transactions.
There is no credit check for these cards.
You can learn to budget your expenses.
You can create savings without having to create a bank account. Look for cards that pay an interest on the amount in the savings section.
Go to card comparison websites and find reviews of the best prepaid debit cards. Choose the card that’s the best fit for you.