Using a card to spend online and in person — and to withdraw cash as and when you need it — is convenient, and much safer than always having pockets stuffed with bills. However, what type of card is best?
If you’re wondering about the difference between a prepaid card and a debit card, this guide covers all you need to know. We’ll look at a debit card vs prepaid card head to head comparison, and walk through when each one may be useful. We’ll also touch on the Wise card, as a handy way to pay — with the mid-market exchange rate and low, transparent fees — when you’re using foreign currencies.
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What is a prepaid card?
A prepaid card is a card which must be topped up prior to any spending. Usually, a prepaid card will be linked to a bank or provider account, which may not be your main day to day account or checking account.
You’ll be able to get a card online or in person, add your money with a bank transfer, card, or in cash, and spend to the limit of the balance at home and abroad.
Unlike with credit cards, you can only ever spend the money you’ve loaded onto a prepaid card. That means there’s no way to blow your budget and get stuck with penalties and interest fees.
Some free prepaid debit cards are available, including the Western Union prepaid debit card. These options don’t have a fee to get a card — although there may be transaction fees, or costs to load money onto the card, which you’ll want to know about in advance.
Who should use a prepaid card?
Prepaid cards are popular with customers who want to stick to a specific budget, as they allow you to load a certain amount, and you won’t be able to overspend.
There’s also no credit check to get a prepaid card, which means they’re accessible even if you have a low or no credit score in the US.
Aside from this, different prepaid cards have their own features, including cards which let you earn cash back or rewards as you spend, and specific international prepaid debit cards which may have better exchange rates and lower fees for overseas use.
Prepaid card pros and cons
Before we compare prepaid cards vs debit cards side by side, let’s look at a few pros and cons of prepaid cards.
| ✅ Pros | ❌ Cons |
|---|---|
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| Read more about what is a prepaid card in our full guide |
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Spend like a local all around the world with the Wise international debit card
If you’re looking for a smart and simple way to manage international spending, check out the Wise card.
The Wise card is a debit card, with no minimum balance and no ongoing fees to worry about — and of course, no interest or penalty charges, and no bill to repay at the end of the month.
Where Wise really stands out is for international use. Top up your Wise Account in USD, and switch to any of the 50+ supported currencies with the mid-market exchange rate.
Or just let the card convert for you — you’ll still get the great rates Wise is famous for, and low fees. Spend and make withdrawals in 170+ countries with ease, with Wise.
Everywhere moneyin just a few clicks 🗺
Please see Terms of Use for your region or visit for the most up to date pricing and fee information
What is a debit card?
A debit card is typically linked to a checking or savings account, and used to spend and make withdrawals in the US and overseas.
Because debit cards are often linked to a primary bank account, you’ll often fund your account and card with direct deposits — your salary or pension for example. That means there’s no need to specifically top up the card, you can just draw the money from the linked account when you need to.
Unlike a credit card, when you spend with a debit card, the money will be taken from the linked account instantly — or at least within a day or two. That means you don’t get a bill to pay at the end of the month, and — as long as you don’t accidentally overdraw your account — there are no interest or penalty fees to worry about.
Who should use a debit card?
Debit cards are handy for anyone who wants to spend on a card without risking running up debts.
Debit cards can be linked to a range of account types from banks and similar financial service providers, to conveniently spend funds that have been deposited without the need to carry too much cash.
Debit card pros and cons
Let’s look into a few pros and cons to help you decide if a debit card can work for you.
| ✅ Pros | ❌ Cons |
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| Read more about what is a debit card in our full guide |
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Are debit cards and prepaid cards the same thing?¹
Technically, a prepaid card is a debit card. However, when people refer to debit cards and prepaid cards, they’re usually referring to slightly different products.
Generally when we talk about a debit card, we’re referring to a card linked to a checking account or similar. Funds are likely deposited to the linked account automatically, by your employer for example, so there’s no need to load up the card — you just spend the money in the account as and when you need to.
Prepaid cards are often not linked to a primary account, and need to be loaded specifically, in cash or using a bank transfer or card. You can then spend the funds loaded to the card conveniently, and top up again when the balance runs low.
Is a debit card better than a prepaid card? Full feature comparison
To round out, let’s look a bit more at the difference between a debit and a prepaid card in a head to head comparison.
| Debit card | Prepaid card | |
|---|---|---|
| Available from | Banks and credit unions mainly, sometimes from specialist providers | Usually from specialist providers, occasionally from banks |
| Acceptance | Accepted anywhere the card network is accepted | Broad acceptance — but may not be accepted when paying deposits, or for fuel for example |
| Safety/security | Safe to use with normal precautions — but usually linked to a main bank account, which can be a risk if the card is lost | Safe to use with normal precautions — just make sure you get a card from a reputable provider |
| Fees | Occasionally you’ll pay an annual card fee ATM fees may apply | Some cards have a fee to receive, or monthly account charges Fees may apply to load your card ATM fees may apply Account dormant or closure fees may apply |
| Credit score | Credit checks may be required depending on linked bank account | No credit check required — usually available regardless of credit score |
| International usage | Usually accepted internationally — fees may apply, depending on the card you pick | Usually accepted internationally — fees may apply, depending on the card you pick |
How to pick the best option for you
There’s no single best decision when it comes to prepaid card vs debit card. In the end it’ll come down to the specific cards you like, and how you want to use them.
| When you’re deciding, here are a few things to consider: |
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Ultimately which wins between debit cards and prepaid cards will depend on your personal preferences. In fact, having more than one card can be a smart move, so you’ll always have a plan B if for some reason your main card can’t be used.
Use this guide to help you pick between a debit card and a prepaid card — or maybe you’ll prefer to have both. In either case, remember the Wise card as a smart, simple, and low cost way to spend and withdraw in foreign currencies.
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Source:
- CFPB - Debit card, credit card, prepaid card
Source checked on 02.14.2023
*Please see terms of use and product availability for your region or visit Wise fees and pricing for the most up to date pricing and fee information. This publication is provided for general information purposes and does not constitute legal, tax or other professional advice from Wise Payments Limited or its subsidiaries and its affiliates, and it is not intended as a substitute for obtaining advice from a financial advisor or any other professional. We make no representations, warranties or guarantees, whether expressed or implied, that the content in the publication is accurate, complete or up to date.
