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Should You Get a Prepaid Debit Card?

These cards can help you manage money and
build savings

What are the benefits?

For the unbanked and underbanked, reloadable prepaid debit cards can make it possible to avoid the high fees mentioned above. Other benefits include:

  • More safety because you don't have to carry cash
  • Immediate access to money with direct deposit
  • Making it more difficult to spend more than you have 
  • Encouraging saving by allowing you to transfer funds from a card to a related savings account

What are the drawbacks?

Many cards come with "hidden" fees — for activating the card, adding money, checking your balance and more. Plus there might be a monthly service fee. Be sure to read the fine print and ask about all fees that come with the card.

Other drawbacks include:

  • Some card accounts are not FDIC-insured
  • Prepaid cards do not help build creditworthiness
  • Protection for the owner from loss, fraud or theft may not be required by law

How to choose a prepaid debit card

There are many cards available, so compare the choices before selecting one. These steps can help:

  • Compare the features to your needs: Do you need to receive federal or state benefits on the card? Do you want a savings account with the card? How about ATM access? Make sure the card has what you want.
  • Compare the fees: How often would you use the card? Would the way you use the card incur fees? Is there a minimum monthly deposit required to waive the monthly fee, and if so, can you meet the requirement?
  • Look for FDIC insurance: Find out if the debit card account is covered by the FDIC. If it is, and you are named as the cardholder, your money is protected up to $250,000 if the bank holding the money for the card goes under.

You can compare cards by reading the fine print or visiting NerdWallet's new comparison tool.

Income
Resources

Use the navigational menu to learn more about the tools and resources that will help low-income Americans age 50 and over regain control of their financial stability.

Featured
Programs & Services

AARP Tax Aide

AARP Foundation Tax-Aide

This program offers free assistance with tax-return preparation. Go

grandmother with her two grandaughters

AARP Benefits QuickLink

See if you qualify for public assistance and you can save money on health care, medication, food, utilities, and more! Go

AARP Foundation Finances 50+

Finances 50+

This financial capability program is a collaboration between AARP Foundation and Charles Schwab Foundation. Go

Couple standing outside home, Create the Good

Housing Solutions Center

This program offers free HUD-certified counseling and assistance to 50-plus homeowners who are at risk of foreclosure. Go

Medical team at a computer, AARP Foundation Back to Work 50+

Back to Work 50+

We are partnering with workforce services providers to strengthen the bridge between 50+ job candidates and respected employers. Read

Income in the
News

Tips for Preventing Elder Financial Abuse

(PRWeb.com, June 2014) - The Independent Community Bankers of America® (ICBA), the Senior Housing Crime Prevention Foundation (SHCPF) and the nation's more than 6,500 community banks are providing tips for preventing the disturbing trend of elder financial abuse. Read

Finances, Desire to Work Keeping Seniors in the Workforce

(The Intelligencer, May 2014) The number of workers 65 and older rose 3 percent between 2010 and 2013, while the number of younger workers under 50 years old fell, according to a recent Gallup poll. Read

Are Boomers Confident About Retirement Saving? Survey Says No.

(Marketwatch, April 2013) - A new survey by the Insured Retirement Institute notes a marked drop in the last two years in boomers' confidence that they are saving enough for retirement. Read