Here are some questions to ask when comparing prepaid credit cards.
What are the fees? Look for a card that offers the most reasonable rates. Some cards charge upwards of $150 in application and processing fees to open the card, and in addition levy sizeable monthly charges. The range of fees varies considerably from card to card, so you can make substantial savings by doing your homework.
The details of the fees charged may be located deep in the Terms & Conditions, so look through all the headlines in the membership agreement until you find the section on Fees and Charges. There are often many types of fees associated with both issuing and using the card, so you need to add up all the fees to get a complete picture of how much it will cost you to get and use the card.
How many vendors will accept the card? While some cards are accepted widely (e.g., at all the locations that accept Visa or MasterCard), others may be limited to fewer places of acceptance. Be sure to pick the card accepted in the locations where you will most likely need it.
Is there a limit to how much you can load on the card? Many cards put a maximum on the amount that you can store on the card, typically $2,500.
How easy is it to load money on the card and what is the fee? For some cards, you have to mail in the amount you wish to deposit. Others have multiple physical locations where you can load money, or they allow you to transfer money directly online or via your bank. Make sure you pick a card that gives you an easy way to load money. Most cards charge a fee each time you load money, so look for a card with a low loading fee.
Does the card carry a rewards program? Some prepaid cards allow you to earn points every time you use the card. These points can be redeemed for specific services such as, for example, credit towards your wireless phone bill. If a card advertises very attractive benefits, such as roadside assistance and dental and prescription discounts, study the details of the offer. Typically, you pay an extra membership fee for these services, e.g. around $15 a month, which is rolled into the monthly fees you pay for your card. You may not want to pay such additional fees unless these are services you know that you need.
Does the card issuer send automatic paper statements? Some cards only offer e-mailed statements. If you are not a regular computer-user, this may not be a convenient way for you to receive your statements. However, if you want to receive paper statements, you often have to pay an extra fee, e.g. $6.95 per month, and you may have to call each month to request that the paper statement be mailed. If you are not a computer user, you need to weigh the extra cost and trouble against the other card benefits.
Does the card provide liability protection for unauthorized charges? While standard credit cards won’t hold you liable for unauthorized purchases, the terms for prepaid credit cards tend to be more stringent. Most cards will limit your losses from unauthorized charges to $50, but you must call within a pre-set period, e.g. two days, to notify the card issuer that your card is missing. Be sure to familiarize yourself with the specific liability terms of the prepaid card you choose.
