How to Compare Prepaid Credit Cards

Compare prepaid credit cards in the same way you would compare other purchases: determine the expense and benefits of each. All prepaid cards will come with some expenses, and some will have higher charges than others. Some prepaid cards will be more flexible than other options, providing you with more benefit for the same price. In the end, the card that offers the most benefit for the least cost is the best option for you.

Expense of Prepaid Credit Cards

  • Activation fee - There will be a one-time fee required to set up your prepaid card account and activate the card. This fee may be a flat rate, or it may be a percentage of the total sum used to activate the card. This fee is very easy to compare across cards since it is straightforward and only assessed one time.
  • Usage fee - Most cards will not charge a fee for usage in all situations. They may, however, charge a usage fee on certain types of transactions. For example, you may be charged additional fees to use the card online. People who use prepaid cards often need them to make plane and hotel reservations and other online purchases that cannot be made in cash. As such, it is very important to make sure the online purchase fee is low.
  • Fees to reload - You will be charged a fee to reload the card. Again, this can be a per transaction fee or a percentage of the amount you are reloading. If you plan to load large amounts, a per transaction fee may be better. If you would prefer to load small amounts regularly, the percentage fee will be a better structure for you.

Benefits of Prepaid Credit Cards

  • Where the card can be used - You should be able to use a prepaid credit card nearly everywhere credit cards are accepted. If your card has restrictions, then this would be one reason to opt for another provider. It is particularly important to look for a card that may be used internationally if you would like to have a prepaid card for traveling.
  • Restricted purchases - There should be very few restricted purchases. However, some prepaid credit cards cannot be used to do things like pay bills. Even though you may not anticipate using the card for this purpose, you should be wary of any lack of flexibility. You never know when you may want to use the card for a transaction you did not previously anticipate.
  • Bonuses and protections - Like most credit cards, a prepaid credit card company will have special discounts and bonuses to offer. You should look for a card that has bonuses applicable in your day-to-day life. For example, small business owners may find a prepaid card that discounts their shipping costs. You may also find a prepaid card that offers more financial protection, such as the ability to close the card if it is stolen. If you value this feature, you may elect the secure card over a less expensive unsecured card.

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