Just because the bank thinks you are too risky to be provided with a checking account doesn’t mean you’re not good enough for them to take money from do business with you. The prepaid debit card industry has been growing rapidly over the past few years, and several big banks and even credit card companies want in on the action.

ID-100108399Prepaid debit cards aren’t attached to a bank account. You can load and withdraw as much money as you want onto them from ATMs, pay your bills, use the card to make payments anywhere that debit or credit cards are accepted, and make peer-to-peer payments. Some cards even allow you to deposit paper checks (via a photo from your mobile phone), write paper checks, and even have your tax return directly deposited.

It’s easily to see the appeal of prepaid debit cards. According to a recent survey by the Pew Research Center, the majority (59%) of prepaid debit card holders also have checking accounts. But, these cards allow them to better stick to a budget, avoid overdraft fees, and make purchases online without worrying that their account information will be compromised.

Another large population of debit card users are those who cannot qualify for a checking account at the bank (or who don’t want one). For such people, these prepaid cards are the best alternative to a checking account in that it allows them to make credit card purchases, and they don’t have to walk around with large sums of money in their wallets.

When they first came out, prepaid debit cards were pretty expensive. Users could expect to be hit with an assortment fees for practically any transaction or service. But today, as these cards have become more popular with consumers many of them are shifting their fee models to look more like… well, checking accounts. Instead of a litany of fees, users are charged a consistent monthly fee.

But guess what? Many of the most popular prepaid debit cards are issued by big banks and credit card companies, such as Chase, Us Bank, American Express, and Visa. So, whether you are not using a standard checking account by choice or by consequence, chances are you’ll still be doing business with the same big names.

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