Prepaid cards let you spend only what you load onto the card so no credit check is needed to get one. But some prepaid cards are much better than others.
Michael Feight takes care of almost all his financial transactions with his Green Dot prepaid card .
"It's convenient," Feight says. "It's accepted everywhere Visa is accepted."
Feight is very careful how he uses the card and says he's able to avoid almost all fees. But Consumer Reports Money Adviser's investigation of 26 prepaid cards finds many carry hefty charges.
"You can be charged an activation fee, a 'swipe fee' every time the card is used, a monthly maintenance fee, and even a 'dormancy' fee for not using the card often enough," said Margot Gilman of Consumer Reports Money.
Consumer Reports says the AccountNow Gold Visa Prepaid Card charges $9.95 per month plus as much as $4.95 to load money onto the card and $2.50 for every ATM withdrawal.
The NetSpend Prepaid Visa Pay-As-You-Go card charges you every time you use the card.
"For a daily user of the NetSpend Pay-As-You-Go card, the 'swipe' fees could add up to hundreds of dollars a year," Gilman warns.
But Consumer Reports did find some cards offer good value and convenience. They include the Emerald Card from H & R Block and the Bluebird card with direct deposit.
The Green Dot Card is another good choice. As Michael Feight has found, almost all fees can be avoided if you use it 30 times a month and reload with direct deposit.
You should always read the fine print carefully and be aware that prepaid cards are not protected by law against loss or theft. So find out if the card issuer has voluntary protections in place Also, try not to use prepaid cards to buy gas at the pump or pay for hotels or rental cars. Those companies can put extra holds on your card for a certain amount of time so you won't be able to use all your money.
