Capital One Prepaid Card Review

The Capital One prepaid card has recently been released and the following review will go into detail about its features, fees, benefits and drawbacks.

Overview

Prepaid cards are becoming more popular over the last couple of years especially for people who have a bad credit history. Prepaid cards are not credit cards although they work in a similar way. With a credit card you are given a credit limit i.e. an amount of money that is lent to you for a month if you choose to spend it.

When you spend it you have to pay it back because it was not your money in the first place. With a prepaid card you deposit your own money from your own bank account into the card account and that essentially becomes your credit limit. The only difference it is your money not the banks or card issuer.

When you purchase items your prepaid card account is automatically debited. Your available balance will reduce as you spend more on the card. When the balance returns to zero you will have to reload the card with more money to enable you to purchases again. Prepaid cards can come with a a lot of fees which is kind of ridiculous as its your money that your spending.

Ok, with that explained lets get back to the Capital One prepayment card review.

Who Would Use The Capital One Reloadable Prepaid Card

The Capital One prepaid card is a good choice if you cannot obtain an ordinary Capital One MasterCard, a Visa secured credit card or even a debit card. This is a common scenario for people who have a low credit score on their file. To obtain a prepaid credit card you do not need a credit check.

As long as you can prove that you funds for a minimum security deposit your prepaid card application should go through smoothly. Prepaid cards can also be cheaper because interest rates are not charged because you are using your own money.

What is Good About This Card

• Low Fees
• No annual fee
• No Activation charges
• Reload deposits are free
• $7,500 max deposit
• Free payments online
• No credit check

What's Not So Good

• Not the card for rebuilding your credit rating

Capital One Prepaid Card Fees

Prepaid cards have a reputation for charging lots of fees. The key reason for this is that the providers cannot charge you an annual percentage rate (APR) as with a credit card. As they have to make money out of you somehow, they apply lots of fees for you to use your own money.

However, the Capital One reloadable prepaid card is a rare exception as it is relatively cheap to use. The issuer has resisted from bombarding the cardholder with lots of charges.

Monthly Fee	Free if you load more than $500, otherwise $4.95 per month.
Activation fee	No Fee.
Reload fees using retailers	Issuer charges no fee, although retailers may charge $4.95 per reload.
Reload fees via bank transfers	No Fee
ATM charges*	Free for the first one every month then, $1.95 (excl ATM fees) thereafter.
Cheque/Paper bill charges	Single transaction $0.95

*There is a daily withdrawal limit of $500

One way that lenders and credit card companies can rip people off is charging them reload fees. A reload is depositing more of your money (not the banks!) to increase the limit on the card. Many issuers will charge you $4.95 for the courtesy. However, Capital One have refrained from charging these rip-off fees. The only thing to watch out for is that reloading your balance through a retailer may result in a charge of $4.95.

There is no activation fee and no monthly fee if you keep your balance above $500, other wise you will be a charged $4.95 a month. The first time you withdraw cash each month at an ATM will be free of charge. There maybe third party ATM fees so use the ATM's  that do not charge for withdrawals.

Overall the Capital One Prepaid card has fewer fees compared to its rivals making it one of the cheapest on the market to use.

*image source: Capital One

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