People often ask me for my opinion before they choose a bank account. I tell them that there is no universally right choice. Making the right decision depends on how you plan to use your account. Do your research now, and it will pay off later. You have to know what you want first. Then, you should search for an account that serves your needs.
But while the checking accounts offered by most banks tend to have the same set of features, things can vary dramatically between prepaid cards. A consumer should understand what each card can do for them.
How Will You Withdraw Money from Your Account?
Start with ATM networks. Before you pick a prepaid debit card, you must determine how you will access cash from your account.
Branch banks offer free access to their ATMs. Prepaid debit cards – except for the ones provided by a traditional bank – will not have their own ATM network. Instead, some prepaid card companies join an independent network. Some of the larger networks include:
· VISA Plus Alliance
Both of these networks have tens of thousands of ATMs. Their ATMs are often located in grocery stores, pharmacies, gas stations, and other retail settings. Some banks have added their ATMs to an independent network as well. If you live in a city, it’s likely that one of the networks has an ATM located less than a few miles from your home or workplace.
Solving the ATM riddle involves two steps. First, you need to ascertain if a card account belongs to a surcharge-free ATM network. WiseWage provides this information on the card details page for each of its accounts. That will make your life easier. My experience is that many of the websites published by the cards themselves bury this information. Second, find out where those ATMs are located. The networks publish ATM network maps on their websites and inside their apps. Likewise, once you have a prepaid debit card account, you can refer to that card’s app to scout for ATMs.
Once you know which ATM network you will be able to use, then you should see if there is an ATM in a place that will be convenient for your lifestyle.
One thing to be wary of: some prepaid debit card companies do not choose to join an independent network. Having a card without access to a free ATM could increase the amount you spend on your account. The only way you will be able to get cash will be at the point-of-sale.
How Will You Add Money to Your Account?
Next, ask yourself how you will make deposits. Will you add funds exclusively through direct deposit? If you also receive checks, then you will want to have the option of using your phone to deposit checks remotely. Either should be free. All of the cards are WiseWage allow a consumer to use direct deposit or mobile check deposit to make deposits.
The Cost of an Account – It Depends!
Finding the right prepaid card pivots on understanding how you will use the account. Earlier, I mentioned how some functions could be more or less useful for different people. It is also the case that the overall cost of having an account can vary depending on your habits. Most companies reduce or eliminate maintenance fees for months when a consumer makes a direct deposit or deposits more than a baseline minimum to the account. Before you apply for an account, you need to know if you will qualify for one of those discounts.
Tailored for You
Are there any particular features you would like? It might surprise you, but some prepaid cards will do things that a regular bank would never consider. For example, some cards are set up to manage the purchase of prepaid card cell phone minutes. Some even offer a discount on the price of minutes.
Some cards allow the consumer to set up sub-accounts. These can be very useful. Some people like to use sub-accounts to set aside money for a particular purpose – i.e. a vacation fund or a place to keep allowances for children.
Prepaid debit cards will not improve your credit score. The algorithms used by the largest credit bureaus still prefer to focus on how you use credit. Some efforts are being made by a few companies to develop “alternative” credit score models that incorporate payments that everyone makes, even if they don’t have credit. For example, some alternative models track when you pay your utility bill, your rent, or your cell phone bill. In each case, you have made a choice to be financially responsible – and this speaks to your credit-worthiness. However, most lenders refer to the “Big Three” (Experian, TransUnion, and Equifax) when evaluating an application for a loan.
In spite of that shortcoming, some prepaid cards can now help you to monitor your score. This is one more example of a service that might not come with an entry-level checking account. It could be a real benefit if you don’t have another resource to check your score.
Do you prefer to set up automatic payments for some of your repeating bills? Most people find this to be very useful. Some prepaid debit cards will let you set up an outbound ACH for recurring charges. Be careful, though. If you do not have enough to cover the expense, your ACH will not go through, and you will have to find another way to make the payment.
There are a lot of reasons to get a prepaid debit card. First and foremost, a person benefits from moving into the banking system. But if you understand nothing else from this article, please take away from this that that there is no universally-best prepaid card. The best prepaid card for you might be different than the best prepaid card for a different person. You cannot assume that all prepaid debit cards are the same because they are not.
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