If you’re looking for a prepaid card to use abroad, consider getting a specialist card like the Wise card, or the Revolut card. Some cards also have specific features which make them more attractive to certain customers — such as offering multiple currencies. Prepaid cards offer the convenience of using any payment card, with no need to worry about blowing your budget or getting hit by interest charges.

This is largely to distinguish them from prepaid credit cards, also known as secured credit cards. These credit cards require an upfront cash deposit that acts as collateral when making purchases. In this article, we’ll be discussing prepaid debit cards, which are the most popular type of prepaid card used today. Many prepaid debit cards don’t require credit checks, so they’re easy to get. If you’re in one of the roughly 6 million U.S. households without access to a bank account, prepaid cards can be a solution to safely spend money without having to use a bank. One option is to buy a GSM phone to use at home and with SIM cards while traveling.

  • For example, you may need to register your card in order to get assistance from the card provider.
  • If you need to build credit or have been denied a bank account, a prepaid debit card might not be the best option.
  • Additionally, you might hear the terms “prepaid,” “postpaid,” and “no-contract” plans thrown around.
  • Prepaid cards are a safer and more convenient option to using cash, and you don’t need to have a bank account to use them.

If you’re going to be spending an extended time in a country, another option is to buy a prepaid cell phone once you arrive. In almost every country, you get unlimited incoming calls for free. Powers’ 2007 survey of wireless prepaid customer satisfaction, scoring particularly well in service cost, account management, initial activation and service plan options. Readers Choice award from PC Magazine (2007) for highest ratings among prepaid carriers based on impressive plans. You’ll find that a prepaid cell phone works just like any other, although without a long-term commitment and some of the bells and whistles.

If your prepaid card is lost or stolen, you’ll only lose the amount that has been pre-loaded onto the card. While that still means you’ll lose a bit of money, you how to organize business won’t have to worry about your entire bank account being drained or overdrawn. Prepaid phone plans used to have limitations, especially for data and calling.

Once you choose the right cellphone, take time to shop around for plans before jumping into a contract. Prepaid phone plans are becoming more competitive each year, and if you can find one that suits your needs, you’re looking at potentially hundreds of dollars in savings per year. This isn’t a deal-breaker unless you require fast data speeds and considerable usage limits per month.

Credit cards vs. debit cards: Key differences

If you want the latest smartphone model, you usually have to buy it upfront with a prepaid plan. Some prepaid providers offer financing, but this increases the long-term cost of your phone. Prepaid phone plans are affordable, flexible, and remarkably competitive with contract plans. If you haven’t done a lot of cellphone shopping, it’s easy to get confused when searching for your next plan.

  • Making international calls from your prepaid cell phone may be easy — if you’re calling from the United States and your prepaid plan offers an international option.
  • Prepaid, as the name implies, is a service that requires payment in advance.
  • This makes the ZEN Mastercard an ideal prepaid card for travel.

Furthermore, operators provide group packs for businesses at reduced rates, with free calls among group members. Verizon’s No Annual Contract Monthly Plans can be a great way to keep your spending in check—thanks to no overage charges—while giving you access to America’s most awarded network. Prepaid cards can be convenient for people who do not carry cash. When it comes to opening a bank account for your kid, you’ll likely need to be the primary account holder until they reach 18, then sign the account over to them.


Postpaid customers at the major carriers can always expect to see the leading flagship available at their wireless provider. Increasingly, though, those same models are available from prepaid providers, too. The Galaxy S9, for example, is on sale at Boost, Cricket and MetroPCS (though there’s no option to buy in monthly installments). In the early years, a prepaid mobile phone could only be used within the network of the operator from which the customer purchased the phone. It was not possible to roam onto other GSM networks when using the phone abroad.

Disadvantages of prepaid cards

The PayPal Prepaid Mastercard® can cost up to $4.95 to purchase the card ($0 if you get the card online) and charges you $4.95 a month to use the card. You may also incur ATM withdrawal fees of $2.50, check deposit fees ranging from $0 to 5% of the total check amount and a 4% fee on purchases made outside the U.S. There is no compulsion on a prepaid mobile phone user to top up their balance. To maintain revenues, some operators have devised reward schemes designed to encourage frequent top-ups. For example, an operator may offer some free SMS to use next month if a user tops up by a certain amount this month. If your goal is to establish credit, you might consider applying for a traditional credit card.

What do you want to do with money?

The cards come with either a set available balance or an option to load money onto the card. From there, you can use the card until you’ve depleted the balance. Once the money runs out, you won’t be able to make more purchases until you reload the card. You can only spend the money you load on the card — which means no interest charges and bill to pay at the end of the month.

Ericsson also became a partner in the prepaid service; a Memorandum of Understanding (MOU) was signed in June 1997 and the final agreement was signed in late 1997. The announcement was made on January 26, 1998 (or listen to it). The prepaid service was sold to Metro Mobile in June 1989, and was implemented in November 1989.

However, most major carriers let you buy a pay-as-you-go add-on for international roaming or upgrade your plan during a trip. The differences between prepaid and contract cellphone plans might seem irrelevant. However, there are several advantages of prepaid cellphone plans that also cut costs. If you want to save money on a tight budget, prepaid carriers might be your best option. That’s because prepaid plans don’t often come with the kind of benefits postpaid cell phone plans offer. That said, some carriers — such as Metro By T-Mobile and Boost — do work in a few perks, so be aware of those when picking your plans.

Where can you buy prepaid cards?

It’s a convenient way of seeing if a prepaid carrier’s coverage is strong in your area. While there are some situations where prepaid cards might be helpful, they can come with certain disadvantages. To better understand prepaid cards, read on and learn what they are and how they work.