Be part of the solution.

Help AARP Foundation win back opportunity for struggling Americans 50 and over.

Charity Rating

AARP Foundation earns high rating for accountability from a leading charity evaluator. Read



AARP Foundation BACK TO WORK 50+ is made possible in part by the generous support of Walmart Foundation.


Connect with the



Toll-free Nationwide:




Toll-free TTY:



AARP Foundation Tax ID


Should You Get a Prepaid Debit Card?

These cards can help you manage money and
build savings

Prepaid debit cards seem to be turning up all over the place. Go to your local drug store, grocer or convenience store and you'll probably see a debit card display — or two or three. There are gift cards, general-purpose cards and phone cards. Some employers issue prepaid debit cards for payroll and health care flexible spending accounts, while government agencies issue the cards for benefits such as Social Security, food assistance and disaster relief.

Celebrities are even getting into the act: baseball star Alex Rodriguez, TV host Suze Orman and comedian George Lopez all promote prepaid debit cards.

For many people, the cards are convenient to give as gifts. But the new breed of general-use prepaid debit cards can serve another purpose: Helping unbanked and underbanked people manage their money and build savings.

What Is a prepaid debit card?

A prepaid debit card is kind of like an electronic bank account, letting you pay for things without carrying cash around. Some cards can only be used in a particular store, for a limited amount of money. Other cards can be used at any place that accepts the card's payment network — such as MasterCard or Visa — and are reloadable, so users can add money to them.

Who might want to use one?

General-use, reloadable cards can be a convenient way for unbanked and underbanked people to manage their money. The Federal Deposit Insurance Corporation estimates that about 30 million American households fall into these categories. People who want to control their spending, or rein in their kids' spending, might also find the cards useful.

Prepaid debit cards: for whom, why, and how to choose one

Prepaid debit cards provide safety because they allow you to pay for things without carrying cash. — Photo by: Gusto Images/Getty Images

The term "unbanked" typically refers to an individual, family or household without a checking or savings account. "Underbanked" refers to those who have an account but choose or need to also use alternative financial services offered by providers other than federally insured banks and credit unions. That could include check-cashing outlets, money transmitters, car-title lenders, payday loan stores, pawnshops and rent-to-own stores.

A 2010 AARP Foundation study found that minorities and people who earn less than $25,000 a year are much more likely not to have or use traditional checking and savings accounts.

Among people 45-64, African Americans were almost three times less likely and Hispanics almost two times less likely than whites to have a checking account.

African Americans and Hispanics 65+ were twice as likely as whites not to have a checking account.

People who don't have checking accounts pay on average about $1,200 a year for basic financial services like check cashing and payday loans; annual interest rates and fees for payday loans can exceed 900 percent.

Next: Benefits of prepaid debit cards, how to choose a card. >>


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.

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

Are Boomers Confident About Retirement Saving? Survey Says No.

(Marketwatch, April 2) - 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

Older Americans Adding to Debt to Help Relatives

(Marketplace, March 27) - Recent studies indicate that 50+ Americans now carry more credit card debt than those under 50, the first time for such a swing. And a good portion of that debt comes from older Americans helping out struggling relatives. Read

Challenges Face Those Who Want to Continue Working

(Huffington Post, March 21) - In her most recent blog, Sara Rix, senior strategic policy advisor with the AARP Public Policy Institute, notes that although many older Americans want to keep working, challenges such as ill health, job loss and caregiving responsibilities often still stand in the way; however, ongoing improvements in employment options continue to make "working close to forever" highly appealing. Read