Last updated on December 14th, 2020
It’s the holiday season, meaning many are looking for the perfect gift for their friends, family, or co-workers. Many will opt for a gift card, thinking they offer the best value for money and flexibility as a present. If you are thinking about getting a gift card, you should take the time to consider choosing a prepaid debit card instead.
Gift Cards vs. Prepaid Cards
Gift cards and cash are the most popular choices for gifts, according to the Huffington Post. After all, when it comes to giving gifts, conventional wisdom holds that giving a gift card is the best way to go if you can’t think of anything else as a present.
Gift cards are a popular option because they are safer than cash and allow the recipient to buy whatever they want at a store. What if there were a better option than gift cards, however? Prepaid cards may be the solution you are looking for.
Prepaid debit cards are like gift cards in that they require an up-front payment to open. Like gift cards, prepaid debit cards work by requiring money be loaded onto the card in advance. And, like gift cards, they can be used to pay for products or services. Prepaid debit cards, however, unlike gift cards, can also be used for several other transactions, including:
- Money transfers
- Direct deposits from checking accounts
- ATM withdrawals
Prepaid debit cards also come with security from fraud and other purchase protections from the issuer – usually a major credit card issuer like American Express, Visa, or Mastercard. Additionally, they come with the purchasing power of that issuer, meaning they are likely to be accepted almost globally (in the case of visa prepaid card), but indeed much more widely than a simple gift card.
Why Prepaid Cards are Better Than Gift Cards
- If a gift card is lost or stolen, the holder of the card is out of luck, unless they report the card stolen before the gift card balance is spent. With a prepaid card, the prepaid gift card balance (what you place on the card) is protected through the issuer in much the same way a credit card protects the holder from fraud or theft.
- Gift cards are usually valid for five years, whereas a prepaid card may be closed if the account is inactive for six months, a year, or more. Always be sure to read the terms & conditions before you purchase any card – gift card or prepaid card.
- Gift cards can only be used at the chain that issues them, meaning they have very little flexibility. Prepaid cards (like the ones covered below), however, work like debit cards, meaning they can be used by the holder anywhere the issuer (Visa, Mastercard, or American Express) is accepted. This means prepaid cards offer much greater flexibility versus gift cards
Related Article: What Are the Easiest Credit Cards for Bad Credit to Get?
Prepaid Debit Card Options to Consider Instead of Gift Cards
Bluebird by American Express
The benefits of a gift card are many, but a prepaid card with no activation fee is usually a much better option. The Bluebird American Express Card is an excellent option for anyone who wants to give the gift of Walmart but doesn’t want to pay any fees or interest charges.
The Bluebird American Express is a prepaid card Amex offers in conjunction with Walmart. The card is like a Walmart and Amex prepaid gift card, but it offers far more than any reloadable gift card ever could.
The Bluebird American Express balances the fine line between a debit card and gift card flawlessly, providing many of the perk’s users associate with an American Express credit card, but with the practicality, you look for in reloadable Amex prepaid gift card.
Bluebird by Amex Prepaid Card Perks:
- No fee for activation
- No overdraft fees
- Fee-free reloads
- No monthly fee
- Easy to load money
- Free direct deposit and bill pay
- Free text message or email alerts
- Send money to anyone through Bluebird2Walmart Money Transfer
- Purchase and fraud protection from Amex at no additional cost
- Access your cash from over 30,000 MoneyPass ATMs with no ATM fees
A Prepaid Card with American Express Protection Built-In
Like other prepaid cards, the Amex Bluebird does not require a credit check, meaning it is an excellent option for those who either have poor credit or simply don’t want to take a hit on their credit score for the chance to get the purchasing power and protections that comes with an American Express card.
And, the Bluebird certainly provides plenty of protections: cardholders don’t have to worry when purchasing at Walmart – or anywhere else American Express is accepted, as they receive purchase protection and Amex fraud protection at no extra cost.
Easy to Reload
Prepaid cards are just as easy to add funds to as a gift card, and the Amex Bluebird offers several different options for adding money. Users can add funds to their account with cash or a debit transfer at Walmart checkout registers, meaning they offer they can be filled in the same way as any Walmart gift card, but with the benefit of being able to reload the card, plus Amex purchase protection and security.
Other ways to reload the Bluebird Amex prepaid gift card (if that’s what you want to call it) include debit card transfers, mobile check capture through the Bluebird American Express app (My Bluebird), or a direct deposit. Direct deposits also allow cardholders to receive their deposit up to two days earlier than average – a great perk!
Bluebird2Walmart Money Transfers by Ria
Gift cards do not provide the option of sending money to friends, family, or loved ones. Prepaid cards, like the Amex Bluebird, however, do offer this feature, meaning you can use your card to send money to anyone you want through Bluebirds2Walmart money transfers. These transfers allow your loved one to collect the funds at any Walmart location in the U.S. at a time that works for them.
Another Prepaid Card to Consider:
Prepaid Cards for Everyday Spending
Prepaid debit cards offer more value than merely as a replacement for a holiday or birthday gift card, however. Prepaid cards also work as an excellent option for anyone that wants the rewards that come with an unsecured credit card but don’t want the hassle that comes with a credit card.
Credit cards require a credit check, which makes them almost impossible to qualify for anyone with bad credit, poor credit, or no credit. Maybe, however, you simply don’t want a hard inquiry on your credit account and want a prepaid card that offers the same rewards but without a credit check. Gift cards can’t provide the rewards or purchasing power that a prepaid debit card provides, making them impractical for everyday use.
Prepaid Debit Card Options for Everyday Use
Netspend Prepaid Visa
Like the American Express Bluebird Card, the Netspend Prepaid Visa Card offers you many of the perks of a gift card, plus the added protection and security you’d expect from a credit card.
Netspend Prepaid Visa Card Benefits:
- No activation fees
- No credit checks
- No minimum balance required
- No overdraft fees
- No monthly fee
- Free direct deposit and bill pay
- Get your direct deposit two days quicker
- Payback Rewards
- Customize your card
Netspend offers both a Prepaid Visa and a Prepaid Mastercard, but it is just a matter of preference which option you choose, as both offer excellent protection and support. Both cards provide a heap of perks that simply don’t come with a gift card.
The Netspend Prepaid Visa is essentially a reloadable Visa gift card that can be used anywhere Visa is accepted worldwide. How does it offer better value than a gift card? Well, a gift card can only be used with one chain – a Visa prepaid card is accepted at more than 93 million locations across the globe!
A Gift Card with Rewards
The Netspend Prepaid Visa comes with the option of an opt-in rewards program – Payback Rewards. This program allows you to earn cash back on select purchases, with the rewards being applied to the account balance – no gift card can offer that.
Get Paid Two Days Faster
As with the Bluebird Card, Netspend Prepaid Mastercard and Prepaid Visa holders can have access to their direct deposits up to two days earlier than usual. Banks wait to make deposit funds available once the amount settles in the account. With the Netspend, however, the deposit enters your account once payment instruction is received, meaning you have access to your hard-earned money when you want it, not when the bank decides to allow.
Kroger Rewards Prepaid Visa
The Kroger Family of Brands spans the entire United States and includes some of the most popular supermarket and fuel stop names in the industry, including Copps, Dillons, Food4Less, Fred Meyer, Fry’s, Harris Teeter, King Soopers, Pick N’ Save, Ralphs, Smith’s, and more.
The Kroger Rewards Prepaid Visa differs from many of the prepaid cards we’ve highlighted in that it isn’t a gift card, but rather an everyday use card that offers many of the same perks that come with the Kroger credit cards from U.S. Bank.
Kroger Rewards Prepaid Visa Perks:
- Earn 3x points on Kroger Family of Brands own brand purchases
- Earn 2x points when shopping at any Kroger-owned chain
- Earn 1x points for every other purchase made with the card
Earn Rewards with Every Purchase
The Kroger Prepaid Visa (also available as a Mastercard) provides the chance to earn impressive rewards without the need for a credit check. Like the credit cards, this prepaid card earns 3x points on own-brand purchases at Kroger Family Brands, 2x points on all purchases made at Kroger stores, and 1x points on everything else.
Kroger Rewards are very straightforward in that you earn on any purchases with Kroger’s. That means you’ll get rewarded when you purchase your groceries, as well as your fuel with the company. Even better, 1,000 points automatically equal a $5 rebate towards your next shop.
New Account Bonus
Like a credit card, the Kroger Prepaid Card also comes with a bonus for new accounts. Once you make your first direct deposit, you’ll receive a $10 credit to your card, meaning this is a prepaid card that actually pays you!
Like any other prepaid card, the Kroger Visa prepaid card also offers the usual protections that come with a credit card. Cardholders get Visa purchase protection and Zero Fraud Liability coverage. They’ll also be worry-free, thanks to no overdraft fees or credit checks. Finally, they’ll have access to the Kroger Rewards Prepaid app, which allows for simple account management, spending tracking, and rewards monitoring – at no extra cost.
American Express Serve
The American Express Serve Card is a prepaid card that acts in much the same way as the Bluebird. And like with the Bluebird, account management is easy with the American Express Serve: login to the American Express Serve app, and you’ll have access to a whole bunch of features that don’t come with a gift card. Serve holders can pay their bills online, conduct money transfers via Ria, check their balance, and more.
American Express Serve Card Prepaid Perks:
- No fee to get the card online
- No monthly fee when you receive $500 in direct deposits each month
- No transfer fees
- Receive your direct deposits up to two days earlier than normal
- Free ATM access at over 30,000 machines
While the Serve Card from American Express is a great option, the better choice if you want a prepaid American Express gift card for a loved one (or even yourself) is with the Bluebird. Since the Bluebird is offered in partnership with Walmart, the card has no fees, whereas the Serve does charge fees each month ($6.95 if you do not direct deposit at least $500 each month), card activation ($3.95 if purchased at a retailer and not online), and for other charges.
Other Everyday Spend Prepaid Debit Cards to Consider:
Another Benefit of Prepaid Cards: Practicing Financial Responsibility
Even though prepaid credit cards do not help you build credit, they can still be used to help you build responsible financial habits. Anyone can use prepaid cards to make sure they keep to a strict spending budget, whether for critical expenses like food or more fun purchases that occasionally get out of hand.
You may also want to avoid paying overdraft fees or interest as you would with a debit card or credit card, or you may not have a bank account at all. In any of those scenarios, a prepaid card could come in handy.
Find Your Best Card Today
If you had your heart set on a store gift card, but now are considering a prepaid Visa gift card, an AMEX prepaid gift card, or any other type of prepaid debit card, the team at BestCards is here to help you find your ideal card today.
BestCards is your one-stop-shop for everything credit card and prepaid debit card related. We have hundreds of impartial reviews of the leading rewards credit cards, prepaid debit cards, and everything in between. We also have rundowns of all the latest offers for new cardholders, and a wealth of information on everything you could ever want to know about credit cards: everything from the basics of credit to common credit card traps to avoid.
No matter what you are looking for, our team of credit card industry experts is here to help you make informed decisions about your next financial steps. Check us out today – browse hundreds of impartial reviews, read our comprehensive blogs, or even sign up for our membership and leave reviews of your own!
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