Credit Cards

How to Find the Best Prepaid Card for a College Student

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Prepaid cards are gaining popularity among college students (and their parents) for several reasons. First, with a prepaid card, you don’t have the risk of going deep into debt, high-interest payments, or late fees. Second, if parents are involved in the finances, they can easily add money to the card online. And finally, under the new credit card law that goes into effect this month, students do not need parental consent to get a prepaid card like they will for a traditional credit card.

A prepaid card, sometimes called a prepaid credit card or a prepaid debit card, acts like a debit card but without the bank account. Prepaid cards are part of either the VISA or MasterCard debit network and are accepted just about anywhere. They can also be used at ATMs, internationally, or to shop online.

But picking a prepaid card can seem overwhelming. There are literally dozens of cards to chose from, and the fees that these cards charge and the options they offer can be difficult to compare. To help you sort through those options, we've put together a checklist of things to consider and a few suggested cards that seem well-suited for college students.

How will the card be used?

All prepaid cards charge fees. Unlike many no-fee credit cards, the prepaid market charges fees because they do not earn as much from merchants when the card is used. The key is to find the lowest cost card, which depends entirely on how you plan to use the card.

For example, if you plan to make a lot of ATM withdrawals, you’ll want to find a card that offers free or low-cost ATM usage. That same card may charge a lot to use the card directly with retailers, but if that’s not how you plan to use the debit card, those fees won’t matter much. Conversely, you may plan to keep the money on the card and use it much like you would a credit card, without getting cash from teller machines. If that’s the case, how much a card charges for ATM usage is of little significance to you.

We maintain a list of prepaid cards with no fees or low fees, which you can check out. But here are some suggestions:

Heavy ATM Use: Green Dot offers free ATM usage at over 15,000 ATMs and is currently offering a $10 bonus with your first direct deposit.

Heavy Retail Transactions: Mango Money Card offers free unlimited purchase transactions and no monthly fee when you load at least $500 on the card each month.

How will you load money on the card?

How you load a prepaid card is also an important consideration for college students. In some cases, parents will add money to the card each month. In other cases, students may have jobs and want to load the card with direct deposit. Here there are two key considerations: (1) can you load money onto the card the way you want to, and (2) is there an associated fee.

In almost all cases, cards offer free direct deposit of funds. So if you have a job, it's easy to have your paycheck added to your card automatically. If parents will be adding money to the card, you want to make sure the debit card offers free bank transfers onto the card. Each of the cards listed above offers free bank transfers. In addition, some cards allow you to load money from a Paypal account or a credit card, but typically there are fees associated with these types of transactions.

Extra Benefits

Having found a low-cost prepaid option, it’s worth looking at any additional perks that the cards offer. For the most part, these extras won’t be the primary driver behind your choice, but they are worth considering. For example, the Facecard Prepaid MasterCard noted above offers what they call “Prewards.” Prewards are like digital coupons that merchants add to Facecard debit cards. Use the card at the merchant and you’ll get a discount on your purchase. Again, not the primary driver of a decision, but worth considering.


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