What a prepaid credit card is and how to get one
A prepaid credit card is a card you load money onto before you use it — similar to a gift card or a debit card, but branded as Visa or Mastercard. You deposit funds into the card's account, then spend up to that balance. Unlike a traditional credit card, you are not borrowing money, so there is no interest charge and no credit check required to open one.
Getting one takes minutes. You choose a card issuer (common ones include Chime, NetSpend, and Walmart MoneyCard), provide your name and address, and fund the card by linking a bank account, transferring money online, or depositing cash at a retail location. Some cards charge monthly fees; others do not. Once funded, you can use it anywhere Visa or Mastercard is accepted.
Prepaid cards are often the fastest route to a card you can use today if you have no credit history, a very low credit score, or a history of missed payments. They do not report to credit bureaus, so they will not build your credit score — but they also will not hurt it.
Key Takeaways
- Prepaid cards require no credit check and no approval process because you are spending your own money, not borrowing.
- Monthly fees range from zero to around $10, depending on the issuer, so compare the card's fee structure before you fund it.
- Prepaid cards do not report to credit bureaus, so using one will not improve your credit score over time.
- If you want to build credit, a secured credit card (which does report to bureaus) is a better long-term choice than a prepaid card.
How prepaid cards differ from secured credit cards
Both prepaid and secured credit cards let you use a card when traditional credit is not available. But they work differently, and the choice matters if you want to rebuild your credit.
A prepaid card is not a credit product at all. You load money onto it, and you spend that money. No lender is involved. The card issuer does not report your payment history to Equifax, Experian, or TransUnion, so using the card responsibly does nothing for your credit score.
A secured credit card is an actual credit card. You deposit money as collateral (usually $200 to $2,500), and the card issuer gives you a credit line equal to that deposit. You make purchases, receive a bill, and pay it back — just like a regular credit card. The issuer reports your on-time payments to the credit bureaus, which gradually raises your score. After six to eighteen months of on-time payments, many issuers convert the card to a regular unsecured card and return your deposit.
If you need a card today and have no credit history, a prepaid card gets you spending when ready. If you need to rebuild a damaged credit score, a secured card is slower to set up but produces the outcome you actually need.
Comparing prepaid card fees and features
Prepaid card costs vary widely. Some charge nothing; others charge a monthly maintenance fee, a fee to load money, a fee to check your balance, or a fee to withdraw cash at an ATM. Over a year, these add up.
Before you choose a card, look at how you plan to use it. If you load money once a month and spend it gradually, a monthly fee of $5 to $10 costs you $60 to $120 per year. If you withdraw cash frequently, ATM fees of $1 to $3 per withdrawal can exceed the monthly fee. If you reload the card multiple times per month, reload fees of $1 to $5 each matter.
Common prepaid cards and their basic structures:
| Card | Monthly Fee | Reload Fee | ATM Withdrawal Fee |
|---|---|---|---|
| Chime Prepaid | $0 | $0 (online) | $0 (in-network) |
| NetSpend | $5.95 to $9.95 | $0 to $1.50 | $1.50 to $2.50 |
| Walmart MoneyCard | $0 to $5.88 | $0 (at Walmart) | $2 (out-of-network) |
| Green Dot | $0 to $9.95 | $0 to $5.95 | $1.50 to $2.50 |
These structures change, so check the issuer's website for current fees. The cheapest card is not always the best choice — if you use ATMs frequently and the card charges $2.50 per withdrawal, a card with a $5 monthly fee but free ATM access may cost less overall.
What you need to open a prepaid card
Most prepaid card issuers require the same basic information: your full legal name, date of birth, Social Security number, and current address. Some ask for a phone number and email address. A few ask for a government-issued ID (driver's license, passport, or state ID) to verify your identity.
You do not need a bank account to open a prepaid card, but you do need a way to fund it. Options usually include:
- Linking a checking or savings account and transferring money online
- Depositing cash at a retail location (Walmart, CVS, or a MoneyGram agent)
- Having your paycheck deposited directly to the card (direct deposit)
- Receiving a transfer from another person's bank account
The entire process — from starting the process to funding the card — typically takes 5 to 15 minutes online. Some cards arrive by mail within 7 to 10 business days; others issue a temporary digital card number you can use when ready while waiting for the physical card.
When a prepaid card makes sense and when it does not
A prepaid card is useful if you need when ready access to a Visa or Mastercard and have no other option. It is also useful if you want to control spending by loading only the amount you plan to spend that week or month.
A prepaid card is not useful if your goal is to build or repair your credit score. Because prepaid cards do not report to credit bureaus, using one responsibly for two years will not move your score at all. If you are rebuilding credit after a bankruptcy, missed payments, or a period without credit, a secured credit card is the tool that actually works.
A prepaid card is also not useful if you plan to use it frequently for ATM withdrawals or multiple reloads per month. The fees will exceed what you would pay with a low-fee checking account or a secured card.
How to fund and use your prepaid card
Once your card arrives or your digital card number is issued, you load money onto it before you can spend. The method depends on the issuer and the card.
Most prepaid cards let you fund them through a linked bank account — you log into the card's app or website, enter your checking account details, and transfer money. This is free and when ready or takes one business day. Some cards also let you set up direct deposit, so your paycheck goes straight to the card.
If you do not have a bank account, you can usually load cash at a retail location. Walmart, CVS, Target, and other chains have MoneyGram or similar services where you can hand over cash and have it added to your card. This usually costs $3 to $5 per transaction.
Once funded, use the card like any Visa or Mastercard — online, in stores, or over the phone. You can check your balance through the card's app or website. When your balance runs low, you reload it using the same method you used to fund it initially.
Prepaid cards and your financial record
Prepaid cards do not appear on your credit report. The card issuer does not report your account to Equifax, Experian, or TransUnion, so opening and using a prepaid card will not change your credit score — whether you use it perfectly or miss payments (though you cannot miss a payment on a prepaid card because you are spending your own money).
This is different from a secured credit card, which does report to credit bureaus. Every on-time payment on a secured card helps rebuild your score. After 12 to 18 months of on-time payments, many secured card issuers convert the card to a regular credit card and return your deposit.
If you are trying to recover from bad credit, a prepaid card is a stepping stone — it lets you have a card while you work on rebuilding. But the actual rebuilding happens through a secured card, a credit-builder loan, or becoming an authorized user on someone else's account.
Frequently Asked Questions
Can I use a prepaid card to build credit?
No. Prepaid cards do not report to credit bureaus, so they do not affect your credit score at all. If you want to build credit, you need a secured credit card, which does report your payment history to the bureaus and gradually raises your score.
What happens if I lose my prepaid card?
Contact the card issuer when ready. Most prepaid cards can be frozen or replaced. Any money still on the card is protected — it belongs to you, not the issuer. You will receive a replacement card, usually within 7 to 10 business days, and your balance will transfer to it.
Can I use a prepaid card for online shopping?
Yes. Prepaid cards work anywhere Visa or Mastercard is accepted, including online retailers, subscription services, and apps. Some merchants may decline the card if it does not have a billing address on file, so make sure your address is registered with the card issuer.
Do I need a Social Security number to open a prepaid card?
Most prepaid card issuers require a Social Security number for identity verification and tax reporting. If you do not have one, some issuers may accept an Individual Taxpayer Identification Number (ITIN) instead. Call the issuer directly to ask about alternatives.
What is the difference between a prepaid card and a debit card?
Both let you spend money you have already deposited. The main difference is that a debit card is linked to a checking account at a bank, while a prepaid card is a standalone product. Debit cards usually offer more fraud protection and may have lower fees, but they require a bank account. Prepaid cards do not.