Here's what you need to know about prepaid debit cards before adding one to your wallet.

Illustration of a debit card as a mouse trap

Last year Americans loaded an estimated $42.1 billion onto prepaid debit cards, a whopping 47 percent increase from 2009, according to the banking-industries research firm Mercator Advisory Group. The benefits of these cards are clear: They typically don’t let you spend more than what you put on them, so you’re less likely to rack up debt; also, you’re not charged interest on purchases. But these general-purpose cards—offerings from Green Dot ( and NetSpend ( are among the most popular—can have significant drawbacks. Consumers Union, the independent consumer organization, reviewed a large number of prepaid cards and found that they often come with multiple fees for ordinary use (fee types and amounts vary from card to card). If you already have a prepaid card or are thinking about getting one, here are a few tips on how best to use them without being taken to the cleaners.

  • Go to the card’s website (which is printed on the back) to read the terms, conditions, and fee schedule. This information isn’t listed in its entirety on the packaging.
  • Be sure the card doesn’t assess excessive fees. (Some charge $100 or more a year.) Consider the UPside Visa (, which can cost as little as 99 cents a month.
  • Keep tight tabs on the card. If it’s lost or stolen, you could forfeit the entire balance.
  • When you load the card, use direct deposit, says Gerri Detweiler, a personal-finance adviser for, a financial-education site. In exchange, many companies will waive the $5 to $10 maintenance fee.