Prepaid cards are typically used by consumers who either don't have a traditional bank account or can’t get a credit card due to poor credit history. These consumers are often referred to as “the underbanked'' because they lack access to traditional bank accounts. A prepaid card can be especially helpful if you've struggled in the past with overdrafted accounts or have a low credit score.
Online shoppers: Making purchases online can open shoppers up to a variety of security risks. Some of the risk factors may be minimized by using prepaid credit cards.
Habitual overdrafters: A prepaid debit card is a great alternative for people who routinely overdraft their checking accounts. Since the cardholder can only spend the amount loaded onto the card, they won’t face overdraft fees and it’s harder to rack up debt.
Low credit scorers: Prepaid debit cards may be a good option for people with a low credit score and those ineligible for a credit card. The card can make buying more convenient online and in retail stores.
Young adults and teens: Parents can help teens and young adults learn to manage their money by using a prepaid debit card.