Green Dot prepaid cards: What they are, how they work

Considering a prepaid card from Green Dot? Here’s everything you should know about the suite of prepaid debit cards – their fees, benefits and disadvantages – available from the company that invented them.

If getting a handle on your finances is one of your goals this year, a prepaid card could help you cross that item off your to-do list sooner rather than later.

Prepaid cards – which work like traditional debit cards but aren’t linked to a bank account – can be an important money-management tool for people who need help sticking to a budget or want to avoid getting into credit card debt. They can also be particularly valuable for the millions of unbanked or underbanked individuals who have limited access to mainstream financial institutions.

Prepaid cards existed in some form or another long before the short-lived Kardashian Kard made waves back in 2010. Gift certificates, the precursor to gift cards, have been around since the 1930s, and upscale retailer Neiman Marcus started selling them to some customers in 1994. It wasn’t until a few years later, though, that Green Dot first introduced the reloadable, general-purpose prepaid debit card to the masses.

What is Green Dot?

Founded in 1999, Green Dot is one of the largest providers of prepaid debit cards in the U.S. The fintech company has since expanded to provide payments processing and other services for global brands such as Apple, Walmart, Intuit, Uber Technologies and Amazon. Most recently, Green Dot launched GO2bank, the second iteration of its mobile banking service for consumers.

How do Green Dot prepaid cards work?

As noted above, Green Dot cards function similarly to debit cards without requiring an existing bank account. In other words, a prepaid Green Dot card allows you to pay bills, buy stuff online, withdraw money from ATMs and cash checks, among other things.

Green Dot’s mobile app also lets you enjoy some of the same benefits of a regular bank card, including direct deposit, money transfers, lock/unlock protection, customizable account alerts, tap-and-go payments (where offered) and mobile wallet compatibility.

Since you’re not drawing funds against a bank account or accessing a line of credit when you use a Green Dot card, your spending limit is capped at the amount of money you loaded onto it ahead of time. Once it’s gone, you can’t make more purchases until you replenish your balance. This built-in spending control is one of the biggest advantages of prepaid cards, as it inherently prevents you from incurring overdraft fees or racking up credit card debt.

Once it’s registered, your Green Dot card includes federal deposit insurance through the issuing bank (in this case, Green Dot Bank), plus protection against loss, theft and fraud, thanks to a Consumer Financial Protection Bureau rule enacted in April 2019.

Fees and restrictions

Because prepaid Green Dot debit cards don’t require a bank account or credit check, there are few restrictions on ownership: Most people 18 years or older can qualify.

That said, once you’ve purchased a Green Dot card (from one of 90,000-plus partner retailers nationwide), you have to provide your name, address, date of birth, Social Security number, phone number and any other information Green Dot needs to verify your identity. (This may include uploading a copy of your state-issued ID, such as a driver’s license.)

Otherwise, you won’t have full access to the card’s features or be able to reload it, meaning that when your initial deposit is spent in full, the card itself is rendered useless.

Although prepaid cards are growing in popularity, they do have some downsides, such as potentially high fees. Green Dot’s fees vary by card, but besides an upfront purchase price, you may also have to pay a monthly maintenance fee as well as fees for cash deposits, ATM withdrawals and balance inquiries, account inactivity and card replacement, among others.

Adding money to a Green Dot card

There are six ways to add money to a Green Dot card. You must make an initial deposit (between $20 and $500) at the time of purchase, after which you can set up free direct deposit with your employer, transfer funds from outside bank accounts, deposit cash at participating retailers and cash checks through the mobile app.

One big perk of having a Green Dot card is getting paid up to two days faster compared with a paper check when you sign up for direct deposit. (This benefit is common among prepaid cards, including those issued by Netspend.) In addition, certain government benefits, such as federal tax refunds, Social Security income and unemployment payments, can also post to your Green Dot account up to four days earlier than usual.

In other cases, funds availability varies based on the type of deposit and when it’s received. For example, cash deposits made at participating retailers are generally available within 10 minutes of being reported to Green Dot, whereas you’ll have to wait up to five business days to access funds from a mobile check deposit.

Green Dot prepaid cards pros and cons

Pros

• Can deposit, pay bills, and make purchases like a traditional bank account
• Some monthly fees waived with direct deposit
• Receive direct deposits two or more days early
• Available overdraft protection up to $200

Cons

• Fee to purchase some cards
• Inactivity fees possibly charged if you don’t use the card
• Must have direct deposit for fee waivers
• ATM fees of up to $3

Green Dot card overview

Sold only in stores, Green Dot’s prepaid debit card options include the Visa® Debit Card, the Cash Back Visa® Debit Card and the Pay As You Go Visa® Debit Card. Here’s what each one has to offer and the fees you can expect to pay.

Green Dot Visa Debit Card

The prepaid Green Dot Visa® Debit Card probably has more in common with traditional debit cards than the company’s other offerings. On top of all the features mentioned above, the Visa Debit card includes access to Green Dot’s Money Vault, which lets you set aside cash for things like special purchases, a dream vacation or an emergency savings fund (or any other purpose). Once it’s moved into the vault, the money won’t be available for making purchases or ATM withdrawals until you transfer it back to your card.

As a Green Dot Visa Debit Card customer, you’ll pay no fees for bank transfers (though the other bank may charge you), and you can save on the $7.95 monthly maintenance fee when you direct deposit $500 or more in the prior month. Unfortunately, these are the fees you can’t escape:

• ATM withdrawals: $3 per transaction
• Teller withdrawals: $3 per transaction
• ATM balance inquiries: $0.50
• Replacement card: $5
• Paper checks: $5.95 for a pack of 12

Green Dot Cash Back Visa Debit Card

The Green Dot Cash Back Visa® Debit Card is similar to the regular Visa Debit card, save for a few key differences: As a prepaid cash back debit card, you’ll get 2% back on mobile and online purchases with no caps, as well as a fee-free savings account that currently earns 2% annual interest on balances up to $10,000. Cardholders also receive free in-network ATM withdrawals and free cash deposits at participating retailers.

However, what you don’t get with this card is access to Green Dot’s Money Vault service. There’s also no opportunity to waive the monthly maintenance fee – which is a steep $9.95, two bucks more than what you’d pay for the Visa Debit card. Other fees associated with the Green Dot Cash Back Visa Debit Card include:

• Out-of-network ATM withdrawals: $3 per transaction
• Out-of-network ATM balance inquiries: $0.50
• Teller withdrawals: $3 per transaction
• Replacement card: $5
• Paper checks: $5.95 for a pack of 12

Green Dot Pay As You Go Visa Debit Card

If you’d rather not commit to an ongoing monthly fee, the flexibility of Green Dot’s Pay As You Go Visa® Debit Card might be appealing. In lieu of a monthly maintenance fee, Pay As You Go cardholders pay $1.50 per transaction. Although this type of fee structure could add up quickly, the tradeoff may be worth it for people who want to use prepaid cards to control their spending in certain purchase categories, such as groceries. The card retains many of the same features as Green Dot’s other cards, such as free bank transfers, free direct deposits and the option to use the Money Vault.

As for the Pay As You Go Visa Debit Card’s other fees, they include:

• ATM withdrawals: $3 per transaction
• Teller withdrawals: $3 per transaction
• ATM balance inquiries: $0.50
• Replacement card: $5
• Paper checks: $5.95 for a pack of 12
• Inactivity fee: $9.95

GO2bank Visa Debit Card

The GO2bank Visa Debit Card is the newest offering from Green Dot. It provides free ATM withdrawals at thousands of in-network ATMs nationwide and no monthly fees with an eligible direct deposit (otherwise, it’s $5 per month). The GO2bank Visa Debit Card is accepted in the U.S., and you can add it to your mobile wallet so you can still make purchases if you don’t have your card with you.

This card can be a good place to hold your money as well. The first $5,000 in your account earns 1%, which is paid quarterly. Plus, you’ll get up to 7% cash back when you buy eGift Cards and 3% when you buy Amazon gift cards in the card’s app.

Some of the fees that you may incur with the GO2bank Visa Debit Card include:

• Purchase price: Up to $2.95
• Cash deposits at participating retailers: Free
• In-network ATM withdrawals and balance inquiries: Free
• Out-of-network ATM withdrawals: $3 per transaction
• Out-of-network ATM balance inquiries: $0.50
• Teller withdrawals: $3 per transaction
• Replacement card: Free
• Paper checks: $5.95 for a pack of 12
• Inactivity fee: None

Should you get a Green Dot prepaid card?

Prepaid debit cards aren’t right for everyone. For instance, if building credit is one of your money goals, a prepaid card won’t help you do it. And depending on which Green Dot card you want, the fees could end up outweighing any benefits it offers by helping you stay on budget or avoid debt.

But if you’ve had difficulty accessing affordable financial services, have concerns about your privacy or the security of traditional debit cards, or you worry the temptation of a credit card could be too hard to resist, a prepaid debit card could be exactly what you need. And what’s better than one from the company that invented it?

Bottom line

Green Dot offers four different prepaid debit cards that meet the needs of the unbanked. Its cards offer many of the benefits that you’d receive from a traditional bank account, like mobile check deposit, online bill pay and more.

You can choose among cards that have no monthly fees (or fees that are easily waived), cash back rewards, and free in-network ATM withdrawals. To choose which Green Dot debit card is right for you, compare the features and fees of each card before making your selection.