How to use a prepaid debit card—the tool that lets you leave your cash at home

Without a credit card or debit card, trying to make purchases online or perform many other financial tasks can be an inconvenience. Therefore, if you have bad credit or you prefer to avoid traditional plastic payment methods, you might consider using prepaid debit cards as a cash alternative. 

Around six million Americans—4.5% of U.S households—are “unbanked” with no access to a checking or savings account according to the most recent data available from the Federal Deposit Insurance Corporation (FDIC). Meanwhile, 18% of adults in the United States do not have an open credit card account according to the U.S. Government Accountability Office. 

As you can see, if you don’t have access to traditional credit cards or debit cards, you’re not alone. Yet before you use a prepaid debit card as an alternative (or in addition) to these types of cards, it’s wise to understand how prepaid cards work along with their limitations. 

What is a prepaid debit card? 

A prepaid debit card is a type of plastic payment method you can use to make purchases. The card works like a gift card in the sense that you must preload it with money before you can use it. 

Many prepaid debit cards come with the backing of major credit card networks like American Express, Visa, or Mastercard. Such cards may feature Amex, Visa, or Mastercard logos. You can typically use the cards with any retailer that accepts credit cards from those networks or standard debit cards.

How do you use a prepaid debit card? 

Prepaid debit cards look similar to credit…