How does a prepaid debit card work? They are really quite simple. A prepaid debit card has a Visa or MasterCard logo allowing it to be used at many retail locations, just like a credit card or standard bank issued debit card. While credit cards allow you to borrow money, often at a fairly high interest rate, a prepaid debit card debits from funds already on the card. There is no possibility of incurring debt or over limit fees. There is no risk of missing a payment or other difficulties that can come with traditional credit cards. Moreover, if you do have bad credit, a prepaid debit card is available with no credit check.

What fees should you be aware of? Many prepaid debit cards have an activation fee. They may also have monthly maintenance fees. Compare available cards to find one with the lowest fee. While prepaid debit cards can be used at ATMs, higher fees may apply. You may also find that fees can be waived under some circumstances.

If you do not have a bank account, there is a surprisingly easy way to get a prepaid debit card at little or no cost. Many prepaid debit cards offer a full fee waiver if you set up direct deposit. If you are employed, nearly every employer offers direct deposit and more and more may require that you choose it. Direct deposit is faster, more convenient and easier for your employer. It will also save you the inconvenience of having your paycheck cashed and allow you to have immediate access to your money. Some prepaid debit cards are even specifically set up as direct deposit accounts to make things easier for employers managing employees without bank accounts.

If you are looking for a prepaid debit card for your teen, consider checking with your own bank first. Many banks offer prepaid debit cards for teens with lower fees for bank customers. You can also monitor your child's spending online and have the ability to provide additional funds when needed and know how they were spent.