You don’t need a bank account to have a prepaid card. You add money to the card and use it until the money is gone. If the card has an overdraft feature, you can spend more than you added to the card. Prepaid cards don’t help build your credit history, and the fees to use these cards can be high. Prepaid cards must tell you about fees and some other terms. They may set requirements for other consumer protections. Shop around to compare the fees and terms to find your best deal.
Do you need to register the prepaid debit card for greater protections? Does the money you put on the card earn interest? What happens if you lose the card, or it’s stolen? Know the protections and pitfalls before you pick a card.
Some prepaid debit cards let you add overdraft protection or a credit feature to the card. But if you overspend on your prepaid card, you must repay the amount you overspent and you may owe a fee.
It’s best to register your prepaid card right away, if the card lets you register it. If someone uses your prepaid card without your permission, notify the bank or credit union — or other card issuer — right away to limit your losses. If you don’t register the card, you could lose all the money on your card— even if you tell them about the loss on time.
