Green Dot Prepaid Card Review
A Prepaid Mastercard or Visa With No Credit Check Required
Green Dot prepaid Mastercard and Visa cards can be a good alternative to credit cards, secured cards, and bank accounts for people who want to avoid a credit check or are unable to open a traditional checking account. Green Dot prepaid is one of the most widely used prepaid cards, and while it won't help you build a credit history, it will allow you to conduct business in a society that becomes increasingly dependent on electronic payments.
Prepaid cards work much like checking account debit cards. You must load money onto the card before you can use it for purchases, and since Green Dot cards are branded with a major credit card processing network—your choice of Mastercard or Visa—you can use it almost everywhere credit cards are accepted. Because you're spending money you've loaded onto the card rather than accessing a credit line, you don't have to go through a credit check to get approved for a card.
Fees and Features
You can use a Green Dot prepaid card for online purchases, bill paying, and everyday shopping. No minimum balance is required, and the funds you load onto the card are protected against unauthorized transactions.
Personalized cards ordered online are free, as opposed to generic cards that can be purchased in stores for $1.95. To use a card for automatic monthly payments or to rent a vehicle or reserve a hotel room, a personalized card likely will be required.
You can load money onto a card for no fee by having your pay direct deposited or by using the mobile check deposit feature with the Android or iPhone app. Simply use the Green Dot app to take a picture of the front and back of your check, and the funds will be loaded onto your card. There may be a processing delay that keeps you from using your funds for one or more business days, depending on your back.
For a $4.95 fee, you can reload cash at major retailers including ACE Cash Express, CVS, Dollar General, Dollar Tree, Family Dollar, Kroger, Rite Aid, Safeway, 7-Eleven, Walgreens, and Walmart, among others.
In addition to the reload fee, Green Dot prepaid cards come with a lot of other fees. Some you can avoid, but you have to navigate the process of doing so. Some of the fees include:
- Up to $4.95 to purchase the card from a retailer
- $4.95 reload fee
- $2.50 ATM withdrawal fee, plus whatever fee the ATM operator charges
- $2.50 teller cash withdrawal
- 3 percent foreign transaction fee
- $5 card replacement fee
- $7.95 monthly fee can be waived any month you load $1,000 or more onto the card
As long as you stay away from actions that come with fees, the Green Dot prepaid card has the potential to be a solid alternative to a traditional checking account that comes with a debit card.
- No credit check: If bad credit is keeping you from getting a credit card or from opening a checking account, you still can get a Green Dot card. In a world where electronic payments have become the norm, this convenience is perhaps the greatest value of a Green Dot card.
- Avoid expensive check cashing services: If bad credit is what is drawing you to Green Dot, one of the benefits is the ability to cash checks for free, either through direct deposit or by using the mobile check deposit feature on the app.
- Feature-rich app: In addition to mobile check deposits, the app allows you to keep tabs on your account constantly. You can review your balance and even be alerted when it is getting low.
- Free online bill pay: This is a great feature typically found with most conventional checking accounts. There's no need to order expensive paper checks. Bill payments can be scheduled through this feature at no additional cost.
- Visa/Mastercard brands: It's difficult to find a retailer that does not accept Visa and Mastercard, which means it's equally difficult to find a retailer that won't accept your Green Dot card as a form of payment.
- No-fee cash back with debit purchases: While there are fees attached to ATM withdrawals and bank teller withdrawals, you can get cash back when making a debit purchase for no fee.
When considering the Green Dot prepaid card as an alternative to a traditional checking account, keep in mind that it does have its limitations, and that is almost entirely attributed to the many fees that can add up if you are not paying careful attention.
- Fees for all ATM transactions/bank teller withdrawals: Green Dot has not ATM network, nor is it part of any bank. This means using a bank or one of its ATMs will result in fees. While there is the option to get cash back for no fee when making debit purchases, that option is not always available or convenient when you need cash.
- Monthly fee: This one can be avoided as long as you are loading at least $1,000 onto your card every month.
- Additional fees if balance falls below $0: Since this is a prepaid card, the most likely way this would happen is if you were charged with fees while your balance already was at or near zero.
- High fees for loading cash at retail outlets: This can be inconvenient for anyone who gets paid a significant portion of their earnings in cash. For example, those who rely largely on tips often have a lot of cash on hand that needs to be deposited.
- High fees for paper checks: A dozen checks cost $5.95, which is steep. Adding to the inconvenience is that checks must be preauthorized with the mobile app before you can use them.
- No savings account option: Unlike a traditional bank, there is no option to stash money in a low-interest savings account.