Want the convenience of paying with plastic, without the responsibility that comes with credit?
Not interested in opening a bank account?
If you’re nodding your head, you might want to take a look at American Express prepaid cards. As with other prepaid debit cards, you load these cards with your own money, and then can use them wherever Amex is accepted. Since you can’t spend more than what you’ve deposited, they’re a less risky way to get started with plastic.
Prepaid cards don’t require a credit check because they don’t affect your credit scores. If you’re looking for a way to build your credit — while still keeping on some training wheels — a secured credit card might be a better fit. Learn more about the differences between debit cards and credit cards.
How Do American Express Prepaid Cards Work?
Getting and using an American Express prepaid card is simple. Here are the four basic steps involved.
- Register for a card like the American Express® Serve® (Review) or American Express® Bluebird®.
- Load it with funds.
- Use the card for purchases, bills, etc.
- Reload the card when you need more funds.
1. Sign up
You can register for a prepaid American Express® Serve® (Review) or American Express® Bluebird® card online for free. You must be 18 years old and have a Social Security number and an email address. (For the Bluebird card, you must be 19 if you live in Alabama or Nebraska, and can’t apply for the card if you live in Vermont.)
Alternatively, you can pay up to $3.95 (Serve) or $5 (Bluebird) to purchase your prepaid card from a big box store or pharmacy. Just note you won’t have access to the card’s full features until you register your account online.
2. Load it with funds
When you’re ready to put money on your new American Express prepaid card, there are several different routes you can take:
- Direct deposit your paychecks or government benefits on a regular basis.
- Use mobile check deposit (note you’ll need to wait 10 days to access the money, unless you’re willing to fork over a fee of 1%–5%, with a minimum of $5).
- Link your debit card or checking or savings account.
- Load your card with cash at 40,000 retail locations, such as CVS, Dollar General, Family Dollar, Rite Aid, Walmart, and 7-Eleven (you’ll pay between $0 and $3.95 for this service).
3. Use the card
You can now use your prepaid card anywhere American Express debit cards are accepted.
For example, you could…
- Shop in stores or online.
- Pay bills, either online or by requesting mailed checks through the free Online Bill Pay portal.
- Withdraw cash for free at more than 30,000 MoneyPass ATMs (non-MoneyPass ATM withdrawals will cost $2.50 plus the ATM operator fee).
- Send and receive money for free between other users with the same type of Amex prepaid card.
- Send a money transfer to friends and family members, who will be able to pick it up at the nearest Walmart within minutes (fees: $4–$4.99 for transfers up to $50, $8–$8.99 for transfers between $50.01 and $1,000, and $16–$16.99 for transfers between $1,000.01 and $2,500).
- Pick up cash at Walmart yourself (fees: $3–$3.49 for withdrawals up to $500, $6–$6.49 for withdrawals between $500.01 and $1,000, and $9–$9.49 for withdrawals between $1,000.01 and $2,500).
When you’re picking up cash, you can raise your $2,500 limit to $2,900 by direct depositing your tax refund into your Amex prepaid account.
4. Reload the card
At any point, you can reload your card with more money using one of the methods mentioned in Step 2. Or, you can close your account without penalty; it’s up to you.
Perks of American Express Prepaid Cards
Once you’ve got an Amex prepaid card account, you’ll be eligible for a range of benefits, including:
- Early direct deposit: If you sign up for direct deposit with your American Express prepaid card, you may get your paycheck up to two days earlier than you would with a normal bank account.
- Subaccounts: You can create up to four free accounts for other users ages 13 or older. You’ll be able to control their balances and monitor their spending, which might come in handy if you’ve got kids.
- No hidden fees: Amex claims to be transparent with its cards’ fees; unlike some prepaid card issuers, for example, it doesn’t charge for inactivity or cancellation.
- Amex Offers: Get access to a variety of discounts at a changing selection of partner merchants.
- Purchase protection: If you purchase an item on your prepaid card, and it gets stolen or damaged within 90 days, Amex will reimburse you for the purchase price (up to $1,000 per incident and $50,000 per year).
- Roadside assistance: Call for help when you need a tow or a charge, though you’ll need to pay for any services rendered.
- Fraud protection: If your card is lost or stolen, Amex says it will “protect you against fraudulent purchases.”
- Other Amex benefits: You’ll be eligible for 24/7 customer service and access to Amex Experiences.
- FDIC insurance: Just like at a traditional bank, your money is federally insured up to $250,000.
- Mobile app: Both the Bluebird and Serve cards have their own apps, from which you’ll be able to check your balance, send money, and view account activity. You can also opt for text alerts regarding your transactions.
Pros and Cons of American Express Prepaid Cards
Want a quick overview of the pluses and minuses of Amex prepaid cards? Here you go.
- Offer a convenient way to shop and pay bills
- Provide free cash withdrawals at 30,000 ATMs
- Come with a range of American Express perks, such as early direct deposit and fraud protection
- Allow for free, easy-to-monitor subaccounts for other users
- Are easier to budget with than credit cards (since you can only spend what you’ve put on the card)
- Most have monthly fees, as well as cash reload and foreign transaction fees (find cards without foreign transaction fees here).
- Slow payment processing could tie up your money in some cases.
- Don’t build your credit
What’s the Best American Express Prepaid Card?
Amex offers four main prepaid cards that vary in fees and features. (Note that if you live in New York, Vermont, or Texas, you won’t have to pay monthly fees on any of the cards below.)
- American Express® Bluebird®: No monthly fee, free cash reloads at Walmart
- American Express® Serve® (Review): No monthly fee if you deposit $500 per month
- American Express® Serve® FREE Reloads: As you can see, reload for free.
- American Express® Serve® Cash Back: 1% cash back for every purchase, but a monthly fee of $7.95
American Express® Bluebird®
The shiniest thing about this card is it doesn’t charge any monthly fees. Its cash reloads are also free — as long as you do them at a Walmart. Once your card is registered, you can add between $20 and $1,999 at a time. Unlike the cards below, it also doesn’t charge foreign transaction fees (which will save you 2.7% if you purchase items abroad!).
We recommend this card: for most people. With no monthly fees and free Walmart cash reloads, this is our favorite Amex prepaid card.
American Express® Serve®
While this card charges a $6.95 monthly fee, it’s waived any month in which you direct deposit $500 or more. Cash reloads cost up to $3.95 each, depending on the retailer.
We recommend this card: if you plan to direct deposit at least $500 into the account each month. Otherwise it’s not worth the monthly fee.
American Express Serve® FREE Reloads
As the name suggests, the standout feature of this card is the fact you can reload it with cash for free at more than 45,000 locations. The $6.95 monthly fee (No fee in TX, NY, VT), however, is unavoidable.
We recommend this card: if you plan to make more than one cash deposit per month at a location that’s not Walmart, especially if you live in NY, VT, or TX and won’t have to pay the monthly fee. If you live in another state and are planning to make cash deposits at Walmart, the Bluebird is a better option.
American Express Serve Cash Back®
This is the only prepaid American Express card to offer rewards: 1% cash back on every purchase. Just note you’d need to spend $795 per month to make up for its $7.95 monthly fee.
We recommend this card: if you live in NY, VT, or TX, and can earn rewards without the monthly fee. It may also be worth it if you plan to spend more than $800 per month on the card and won’t be using cash reloads (which, at $3.95 each, could quickly drain your cash back earnings).
Alternatives to Amex Prepaid Cards
While Amex prepaid cards can provide an easy way to manage your money, they do come with fees.
If you can get a bank account and a debit card (we love this one from Schwab), we’d generally recommend that as a better choice, because you’ll have a wider range of options and will likely be subject to fewer fees.
Or, if you want to build your credit, we’d recommend looking into secured credit cards. Since your deposit serves as your credit line, they don’t come with the risk of falling into debt that unsecured credit cards do.