Prepaid debit cards have skyrocketed in popularity in the past few years, thanks in large part to the economy, tighter approval/lending policies for credit cards and the fact that people hate paying fees for a checking account. But before you complete and submit a Walmart Money Card application, there are some important things you need to consider.
How does it work?
- By cash or check (at Walmart only)
- Green Dot MoneyPak (at Walmart or elsewhere)
- Walmart MoneyCenter Express (these are ATMs at Walmart stores)
- direct deposit
- online bank transfer
The card can be used for three different purposes:
- Card purchases – This is NOT a credit card, but it can be used like one wherever Visa is accepted for payment.
- Bill payments – The Money Card can be used to pay bills, like those for power, water, cable, etc. This can be done for a fee at a Walmart store.
- Direct deposit – Employees without a bank account may be able to use the Walmart Money Card direct deposit feature to have their paychecks added to their card.
Verdict? Since it’s a prepaid card it doesn’t report to the credit agencies… so it’s worthless for building credit. That’s why you still need to have credit cards if you want to build up your credit.
What are the fees?
There are a number of Walmart Money Card fees you need to be aware of. Here’s a breakdown, which I have updated for 2014:
Issuance Fee for Temporary Card purchased at a Walmart store – $3.00
Issuance Fee for Temporary Licensed Card purchased at a Walmart Store – $4.95
Monthly Service Fee (first fee 10 days after Card set up) – $3.00
Reload Fee at Walmart Store – $3.00
Reload Fee at Walmart Store with check cashing transaction (Check Cashing not available in
all states, Walmart Check Cashing fees will apply) – $0.00
Reload Fee at Participating Green Dot Location – Varies by Retailer
Reload Fee for Direct Deposit – $0.00
ATM Withdrawal (at non-MoneyPass ATM) – $2.00 (plus whatever the ATM operator charges)
ATM Withdrawal at MoneyPass ATM – $0.00
ATM Balance Inquiry – $1.00 (additional fees at non-MoneyPass ATMs may apply)
Teller Cash Withdrawal – $2.00
Rush Delivery Fee for Personalized Card – $20.00
Additional Personalized Card Fee – $3.00
Additional Personalized Card Fee for Walmart MoneyCard Family Edition – $0.00
Lost/Stolen Replacement Card Fee – $3.00
Foreign Transaction Fee – 2%
Whew… that’s a lot of fees there! But in defense of Walmart, most prepaid debit cards/credit cards unfortunately do charge similar fees. It’s free to add money to the Money Card through check cashing, however Walmart charges up to $3.00 to cash checks (and up to $6 for checks of $1,000+) so you are basically still paying money to load the card.
- Easy to get, there is no credit check
- When compared to other reloadable cards, the Walmart Money Card fees are relatively reasonable. All prepaid debit cards have fees – this one just happens to be one of the least expensive
- In order to apply you still need to give your Social Security number and have your identity verified. This is due to the U.S. Patriot Law.
- Other than the basics, the card offers almost no benefits
- The only way to reload for free is to fill out the Walmart Money Card direct deposit form and arrange to have your paycheck electronically deposited on the account.
- Even though the fees are reasonable for a reloadable card, it’s still a a less favorable deal compared to the banks and credit unions that offer no fee credit cards, debit cards and checking accounts.
- As with all reloadable cards, it is totally useless for building credit. Accounts are not reported to the credit bureaus.
- At the time of this review this card was not available in the following states: New York, New Jersey, Rhode Island, Connecticut
If you can’t qualify for a normal credit card, then I would recommend going to a credit union and getting a free checking account with a debit card, instead of using a reloadable card that will cost you money to use.
But if you insist on a reloadable card…
If you want to apply for a prepaid credit card PLEASE make sure you review all the fees closely (they are required to be listed in a table in the terms and conditions). It won’t be possible to get a free prepaid debit card (as mentioned there are always some fees, but they can take many different forms, as noted in the fee schedule update above). But some are much worse than Walmart’s offer, while others are a better. Right now I think the best one (the one with the most fair fee structure) is the new Prepaid Serve Card from American Express, which has almost no fees.
But better yet…
…I would recommend getting an entry-level credit card or if you have bad credit get a secured credit card. Secured credit cards involve sending in a deposit to a card issuer and they in turn issue you a credit card with a real credit limit. If you ever close the account you get your deposit back, with interest. This type of card Will help you build credit, unlike prepaid debit cards (which are more like mobile checking accounts for those who don’t have a real banking relationship).. That way, with responsible use, you can work on building or rebuilding your credit history. Try this out to find offers you may be eligible for: