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8 Best Prepaid Debit Cards for “Bad Credit” (2020)

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More than 14 million American adults don’t have an active bank account. That means they have no place to deposit a paycheck, an account from which they can pay bills, or make necessary online purchases.

If you’re in that group, and you also have a damaged credit history, things can get even tougher. Check cashing fees can eat away at a paycheck, and sending money orders to pay bills adds an unnecessary expense. If you’re tired of these fees, a good prepaid debit card may be for you.

Debit Cards | Secured Cards | FAQs

Many people turn to prepaid debit cards as an alternative to a bank account. And although the number of unbanked Americans is at an all-time low, the number of prepaid debit cards in circulation continues to grow.

If you’re struggling with a bad credit score, and think you may not qualify for a credit card or bank account, a prepaid debit card could be a much easier way to manage your money. That’s because these cards run on major credit card networks, which allows you to use them wherever you would use a credit card.

But keep in mind that these cards will not help you repair your credit score. Since they work as a debit card product, they have no associated credit line and won’t work to build a positive payment history.

If you’re looking for more of a credit rebuilding product, check out the secured credit cards listed further down this page.

PREPAID RATING

★★★★★

4.8

  • With Netspend Direct Deposit, you can get paid faster than a paper check.
  • No late fees or interest charges because this is not a credit card.
  • No Overdraft Fees on purchases using your card.
  • Use the NetSpend Mobile App to manage your account on the go and get text message or email alerts (Message & data rates may apply).
  • Card issued by MetaBank®, Member FDIC. Card may be used everywhere Visa Debit cards are accepted. Click “Get My Card” for full details.
  • See additional NetSpend® Prepaid Visa® details.

N/A

N/A

N/A

Variable Monthly Fee

Not applicable

PREPAID RATING

★★★★★

4.7

  • With Netspend Direct Deposit, you can get paid faster than a paper check.
  • No late fees or interest charges because this is not a credit card.
  • No Overdraft Fees on purchases using your card.
  • Use the NetSpend Mobile App to manage your account on the go and get text message or email alerts (Message & data rates may apply).
  • Card issued by MetaBank®, Member FDIC. Card may be used everywhere Visa Debit cards are accepted. Click “Get My Card ” for full details.
  • See additional NetSpend® Prepaid Visa® details.

N/A

N/A

N/A

Up-to $9.95 monthly

Not applicable

PREPAID RATING

★★★★

4.4

  • Move money from your PayPal account to fund your prepaid card account.
  • Earn cash back and personalized offers, just for using your card.
  • With Direct Deposit, you can get paid faster than a paper check.
  • Card issued by The Bancorp Bank, Member FDIC. Card may be used everywhere Debit Mastercard is accepted.
  • Click PayPal Prepaid Mastercard® for additional features & program details, and to request a Card.

N/A

N/A

N/A

Variable Monthly Fee

Not applicable

Prepaid debit cards allow you to directly deposit paychecks and government benefit checks, pay bills, and make online purchases just like traditional bank accounts and credit cards do, but some include much higher fees.

Before you sign up for a card, be certain to read the fine print and fee schedule associated with each option. By choosing a card with fewer fees and charges, you can maximize your spending power and save more of your hard-earned money.

Nothing in life is permanent — including a bad credit score. If credit card issuers won’t currently look your way, the best way to improve your score without spending a lot of money is by adding a secured credit card to your wallet.

You can use these cards in many of the same ways you use a prepaid debit card, but a secured credit card can actually improve your credit score with responsible usage. The only caveat is that secured cards require a refundable security deposit to open an account.

But since the card has an associated credit line, your issuer will report your payment history to the three major credit reporting bureaus. Some consumers have improved their credit scores in as little as 30 days with a secured credit card, though the time it takes for you will depend on your payment history and current credit situation.

SECURED RATING

★★★★

4.0

  • No credit check necessary to apply. OpenSky believes in giving an opportunity to everyone.
  • The refundable* deposit you provide becomes your credit line limit on your Visa card. Choose it yourself, from as low as $200.
  • Build credit quickly. OpenSky reports to all 3 major credit bureaus.
  • 99% of our customers who started without a credit score earned a credit score record with the credit bureaus in as little as 6 months.
  • We have a Facebook community of people just like you; there is a forum for shared experiences, and insights from others on our Facebook Fan page. (Search “OpenSky Card” in Facebook.)
  • OpenSky provides credit tips and a dedicated credit education page on our website to support you along the way.

N/A

N/A

18.89% (variable)

$35

Poor

SECURED RATING

★★★★

3.9

  • Invest your tax refund to improve your credit by making the refundable deposit for your new secured card today
  • No Credit History or Minimum Credit Score Required for Approval
  • Monthly Reporting to all 3 Major Credit Bureaus to Establish Credit History
  • Credit Line Secured by Your Fully-Refundable Deposit of $200 — $2,000 Submitted with Application
  • Nationwide Program though not yet available in NY, IA, AR, or WI *See Card Terms.
  • Apply in just a few moments with no negative impact to your credit score; no credit inquiry will be recorded in your credit bureau file

N/A

N/A

9.99% (V)

$49

Bad / No Credit

SECURED RATING

★★★★

3.8

  • Invest your tax refund to improve your credit by making the refundable deposit for your new secured card today
  • Receive Your Card More Quickly with New Expedited Processing Option
  • No Credit History or Minimum Credit Score Required for Approval
  • Quick and Complete Online Application
  • Full-Feature Platinum MasterCard® Secured Credit Card
  • Nationwide Program though not yet available in NY, IA, AR, or WI *See Card Terms.

N/A

N/A

19.99% (V)

$29

Poor/Limited/No Credit

SECURED RATING

★★★★

3.8

  • Invest your tax refund to improve your credit by making the refundable deposit for your new secured card today
  • Receive Your Card More Quickly with New Expedited Processing Option
  • No Credit History or Minimum Credit Score Required for Approval
  • Quick and Complete Online Application
  • Full-Feature Platinum Mastercard® Secured Credit Card
  • Good for Car Rental, Hotels; Anywhere Credit Cards Are Accepted!

N/A

N/A

13.99% (V)

$39

Poor/Limited/No Credit

Much like prepaid debit cards, be sure to read the fine print and fee schedule of any card you apply for. Some secured credit cards include multiple fees that add to the cost of your credit line. But, if you’re looking to improve your credit score without paying a credit repair service, the fees may be worth it.

Free is a tricky word because it usually comes with strings attached. The closest thing to a truly fee-free prepaid debit card is the BlueBird Card from American Express. The card has no monthly or annual fees, no transaction or purchase fees, no bill pay fees, and no initial card fee if you order online.

But since the card operates on the American Express credit network, you won’t be able to use it in as many locations as you would a Visa or Mastercard.

Plus, some retail locations may charge you a fee for adding money to the card. While these fees and limitations may not make the card free, the American Express offering still ranks among the cheapest prepaid debit card options.

Hand Holding a Debit Card

Prepaid debit cards on the Visa and Mastercard networks are widely accepted and offer greater flexibility than other cards.

If you’re looking for wider acceptance and more card flexibility, you can check out prepaid cards on the Visa and Mastercard networks. These are among the most accepted cards on the planet and will almost certainly work with any merchant, bill, or service provider you need to pay.

But that flexibility comes with a price.

The Brink’s Prepaid Mastercard®, for example, charges a variable monthly fee, but provides a direct deposit feature that allows you to get your paycheck or government benefits check deposited up to two days faster than you would get them with a paper check.

The Pink Netspend® Visa® Prepaid Card also charges a variable monthly fee but has no late fees, no interest charges, and no minimum balances. Cardholders are also enrolled in the PayBack Rewards℠ program — a rare cash back opportunity in the prepaid space.

Some prepaid cards may charge fees based on how and when you load funds to the card, how much or how little you use the card to make purchases, or for other interactions — such as checking the prepaid card’s balance.

Before you sign up for a card, be certain to read the fee schedule to make sure you understand any charges you may incur.

In short, free products are great, but they can also limit your ability to spend and tie up your money in an account that you can only use at a few locations. A low-fee card could open up many doors that were otherwise closed.

Many people confuse banks with credit card networks. For example, Visa and Mastercard are credit card networks. Each company will allow a credit card’s issuing bank to conduct transactions on their network — for a fee.

When you have a card with a Visa logo, for example, you aren’t borrowing money from Visa when you use the credit line. Instead, the issuing bank fronts the money in your name and Visa conducts the transaction.

That’s why many banks can offer their own credit and prepaid debit cards to account holders. But some banks offer prepaid debit cards to consumers who don’t have accounts at the bank.

American Express, for instance, is both an issuing bank and credit network and offers prepaid cards to all consumers.

Bank Photo

Most major banks require a person to open an account before issuing a prepaid debit card.

Wells Fargo also offers prepaid debit card options, but limits cardholders to direct deposit, bank account transfers, and in-branch deposits to load funds onto cards.

Since major banks make money by adding bank accounts, they often try to incentivize you to open an account if you want their prepaid card — but that kind of negates the purpose of having a prepaid card in your wallet.

These banks may also try to convince you to go with their secured credit card option instead because the associated fees and security deposit makes the product more lucrative for them.

Instead, independent banks, such as Netspend, and even Paypal, have revolutionized the prepaid debit card space by partnering with national chain retail and convenience stores to allow cardholders to purchase and reload cards easier and faster.

These businesses often add a charge for the transaction, though, so check with the retailer before heading there to add money to your card.

This depends on your goals for the card.

Just about every card on the market will allow you to have your paycheck or government benefits check deposited directly into your account. Each card also links to a credit network that will allow you to make purchases, pay bills, and save funds for later.

But what separates the best cards from the pack are flexibility and fees. You can use cards that operate on the Visa or Mastercard network at almost every retail and online location that accepts credit cards. You may find fewer options with some issuers, including American Express.

Just expect to pay slightly higher fees for the convenience of the more popular network. If you plan to pay bills and make regular purchases at specific retailers, check with those businesses to determine which credit card networks they accept before signing up for a card.

Doing so could save you a lot of trouble.

If you want to improve your credit score over the long haul, you may be better served skipping the prepaid card and putting your money into a refundable deposit for a secured credit card instead. That’s because secured credit cards act just like a traditional credit card — and the issuing bank will report your payment history to the three major credit reporting bureaus.

With on-time payments, you could see a nice boost to your credit score. On the other hand, late or defaulted payments could pummel your score rather quickly.

In most cases, the answer is no — but there are exceptions.

You can buy the physical prepaid debit card at many locations. Most grocery stores, gas stations, and convenience stores sell them. You can typically purchase a prepaid card using a credit card. But you will likely run into problems if you try to load money on it using your credit card.

Hand Swiping Credit Card

Prepaid debit cards may be purchased with a credit card, but funds generally can’t be added via credit card.

Some retail locations still allow customers to purchase Visa or Mastercard reloadable debit cards using credit cards, but it’s rare. That’s because there’s a growing trend where fraudsters use stolen credit card numbers to purchase prepaid debit cards — essentially transferring stolen money over to a non-traceable payment method.

When that happens, the retail location that allowed the transaction has to pay for the lost money. As you may expect, most businesses don’t want to take that risk, so they no longer allow credit cards to reload prepaid debit cards.

But there are still a few retailers that do allow the transactions. Your best bet is to check with the store before attempting the purchase.

Your only other option to purchase a prepaid debit card with a credit card is to withdraw a cash advance from your credit card and use the funds to purchase the debit card. We highly advise against this method, though, because of the fees and instant interest charges that take place when you receive a cash advance.

And if your prepaid debit card charges fees for making deposits, you could find yourself paying cash advance and deposit fees, which would quickly deplete your balance before you even get access to the funds.

Prepaid debit cards offer a level of convenience that few other cards can match. Obtaining a card won’t require a credit check, and you won’t have the temptation of available credit that often leads to overspending and debt accumulation.

These lessons not only help adults, but many parents use prepaid debit cards to teach their children fiscal responsibility while giving them access to a payment method they can use just about anywhere.

And as the prepaid debit card market becomes more popular for consumers who can’t obtain a bank account, or don’t want to deal with a bank, the growing competition works to lower card fees and increase cardholder benefits.

With some smart shopping, you could find yourself with a prepaid debit card that not only minimizes your costs but also offers cash back options that typically only exist on traditional credit cards.

While these cards won’t help you repair or build your credit score, they can offer the flexibility you need when shopping and paying bills.



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Evicted California renters at greater risk of getting COVID-19

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After 70 years in Monterey County, 87-year-old Mary Martinez moved in the middle of a pandemic, evicted from her modest one-bedroom, second-floor apartment at 1118 Parkside St. in north Salinas.

According to her former landlord, Martinez was evicted because she allowed a “violent man” to live with her, violating the conditions of her lease. Martinez said the man is her epileptic nephew.

Advocates say that while evictions like Martinez’s are rarer during the pandemic, landlords are feeling the financial squeeze. Some have sold rental properties to make up for lack of income. That can leave renters out in the cold when their new landlord raises the rent by hundreds of dollars or requires all renters move out before they take over the building.

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New program to help Black-owned online businesses | Technology

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ATLANTA _ Many Black entrepreneurs struggle to get bank loans and professional help to launch new businesses. A new program aims to remove those stumbling blocks.

An Atlanta nonprofit and another business have committed $150 million to the 1 Million Black Businesses effort, which will make loans and provide financial and business advice to Black-owned startups and established small businesses. Atlanta-based nonprofit Operation Hope, which helps consumers improve credit scores, is kicking in $20 million, and Shopify, the online e-commerce is adding another $130 million for the loans and website-hosting services.

Other services firms providing expertise or help include Aprio, an Atlanta-based accounting firm, and First Horizon Bank.

It’s a package of products that many Black entrepreneurs couldn’t get through a bank or credit union, said John Hope Bryant, CEO of Operation Hope.

“A bank won’t lend you money unless you can prove that you don’t need it,” Bryant said. “That’s especially true with minority-owned small businesses.”

Small businesses with Black owners were half as likely to obtain business loans as whites, according to a Federal Reserve survey published earlier this year.

The initiative is the latest effort to help Black consumers and businesses enter the financial mainstream. Earlier this month, a group that includes rapper Killer Mike opened a digital bank aimed at Black and Latino consumers.

Banks and credit unions have tried for years to help Black consumers open checking and savings accounts. The efforts helped, as the number of U.S. households without bank accounts fell to 5.4% in 2019 from 6.5% in 2017, the Federal Deposit Insurance Corp. said Monday.

Consumers who own checking and savings accounts typically have access loans with better rates and a wider variety of financial services.

The federal government’s $660 billion loan initiative for businesses hit by COVID-19, the Paycheck Protection Program, also helped few Black-owned businesses, Bryant said. PPP loans were based on a company’s number of employees and its rent obligations. many Black-owned small businesses typically didn’t have enough workers to qualify and are based out of the owner’s residence.

Bryant said a bad credit history may not prevent applicants from receiving a loan.

He hopes more companies will contribute services such as insurance advice or software typically available only to well-established businesses.

Bryant noted that 1MBB is not a charitable organization, as participating companies like Shopify will likely get a pipeline of new business customers through the program.

“This is not pure philanthropy,” he said. “Shopify believes that Black-owned businesses are good businesses if they’re properly supported.”

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This Week’s Top Car Deals & Analysis – October 30, 2020

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The final days of October offer a chance to take advantage of outstanding model year-end deals. Most offers end November 2, which means there isn’t much time left to enjoy this month’s best lease deals and deepest new car discounts. We even found incentives that can help those with bad credit buy a new or used car.

2021 car deals. Interestingly, 2021 new car incentives are showing some surprises. For example, Audi is already offering up to $12,000 in savings when leasing the 2021 e-tron all-electric crossover. We even learned that the new Genesis GV80 SUV will debut with a $589/month lease deal plus special financing rates.

Believe it or not, the 2021 Hyundai Veloster N could prove to be a great value despite a nearly $4,700 price increase compared to the previous year. That’s because our analysis finds that better incentives can make it just $10/month more expensive to lease than the 2020 model. Talk about getting more for your money.

Why are small cars bad to lease? Even though smaller cars typically come with lower price tags, that isn’t always the case when leasing. A mix of lower discounts, worse residual values, and smaller discounts can actually make a Nissan Altima cheaper than a Versa despite having an almost $10,000 difference in MSRP.

Shorter-mileage leases. More brands are offering shorter mileage allowances on car leases. Although this is typically used to offer consumers more flexibility, we’ve found cases in which you can end up getting less for your money. If you don’t read all the fine print, this could make comparison-shopping difficult.

Bad credit car deals. If you have subprime credit, you may find it harder to get financed. However, some manufacturers are offering special incentives to help make cars & trucks more affordable. For example, Chevy is offering $2,000 in down payment assistance plus 9.9% APR for 72 months on the 2020 Trax.

$0 down leases. If you’re adamant about now putting down any money on a lease, you’ll love Sign & Drive leases. In addition to requiring no money down, $0 down lease deals can cover your first month’s payment. Even hot sellers like the Honda CR-V Hybrid offer $0 down and as little as $330/month on a lease.

The high cost of safety? Even though most major automakers are offering more safety features than ever before, our analysis finds that the highest IIHS safety ratings still require costly options in 2020. That’s starting to change, but the cost of buying a car with the most bragging rights is still very high.

Disaster relief. Those affected by some of this year’s natural disasters should be aware that automakers are offering assistance. California wildfire assistance programs like Ford Employee Pricing can save thousands when replacing a car. Similarly, a 2020 hurricane relief program from GM offers $1,000 in savings.

Spooky loan situations. There are some scary scenarios you can avoid when getting a car loan. However, boosting your credit score is possible with some determination because negative items on your credit report fall off after 7 years. Our network of dealers is specially equipped to help those with bad credit.

Upcoming vehicles. Genesis finally revealed the new GV70, a small luxury crossover based on the highly-rated G70 sedan. Whether it’s a redesigned car, truck, or SUV, odds are you’ll find it on our Previews page. That said, as we reported last week, discounts ahead of a redesign can result in substantial savings.

This Month’s Cheapest Lease Deals »



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