Guide to Prepaid American Express Cards

Allison Martin
Female hand holding AMEX prepaid card

The American Express Prepaid Card is a personalized reloadable tool that offers many benefits that credit card holders enjoy. These cards are available for purchase online or at the nearest CVS or Walgreens.

Benefits

Prepaid American Express cards can be loaded using direct deposit, a bank account or via cash through Vanilla Reload Network and Money Pak. Once a balance is available, consumers can use the card anywhere American Express is accepted.

American Express Cardholder Perks

Prepaid cardholders have access to the same benefits that credit card holders enjoy. These include:

  • Discounts at select vendors
  • Personal assistant services (both roadside and global)
  • 24/7 customer service
  • $0 liability and replacement of funds for lost or stolen cards
  • Online account management

Low Fees

Unlike traditional prepaid products, this card does not have monthly usage, annual or customer service fees associated with it. In addition, you can make one free withdrawal per month from any ATM. Note that operators may charge a separate usage fee. The fee for subsequent withdrawals is only $2, approximately $0.50 lower than the standard ATM fee.

Also, you can skip the traditional bank fees as there is never a penalty assessed if your reach a certain number of transactions in a month or the balance drops below a certain level. Overdraft fees are not possible because the card stops working once the balance is exhausted. In addition, cardholders will not be charged foreign transaction fees when traveling abroad.

Accessibility

The card can be obtained at select retail outlets or online if you are 18 or older, regardless of credit history. Since it is prepaid, credit screenings are not a prerequisite to qualify. Cards purchased at retail locations are considered temporary in nature and must be converted online to access all American Express benefits.

To order a permanent card, complete the brief questionnaire and enter the temporary card number and corresponding security code. It usually takes 2-3 days to process your order, and 10-14 days to receive a personalized card. Any outstanding balance will automatically transfer from the temporary card to the permanent card upon activation.

Get a Handle on Your Spending

With this card, consumers are able to manage spending while avoiding overdraft fees. If you constantly find yourself running low on funds, adjustments to spending habits need to be made. You can receive up to three cards for free, so each one can be designated to specific spending categories, such as groceries and entertainment, to help control variable expenses.

Direct Deposit

If your employer participates in direct deposit, you have the ability to load your paychecks onto the American Express Prepaid Card. This will prevent you from having to pay a fee to a check cashing service to access funds or carrying an excessive amount of cash. You will also be able to make secured payments and purchases online.

Drawbacks

As with any prepaid card, there are drawbacks to the program that you should consider.

No Impact on Credit Score

If you are looking for a way to rebuild your credit history, this card will not be able to help. Since it does not report to the three credit reporting agencies, you may want to instead look into secured credit cards if your main goal is to boost your credit score.

Delayed Posting of Deposits

Cardholders have the option to reload the card using funds from a bank account, but it can take anywhere from three to five days to post. Reviewers from Daily Markets were not pleased with the delays, citing that it could result in electronic payments being submitted late considering that the card does not offer online bill pay.

Balance Limits

The daily reload limit is $1,000 and the available balance cannot exceed $2,500. The threshold for direct deposit is $5,000 per month. This prohibits cardholders from making large purchases on items, such as fine jewelry and high-end electronics.

Is the Prepaid AMEX Right for You?

If you are searching for a prepaid card that comes with low fees, is easy to qualify for, offers credit card perks and allows you to get a handle on your spending, the American Express Prepaid Card is definitely worth considering. As noted by credit card expert Joshua Kennon, it is "one of the cheapest cards on the market" and costs a lot less than traditional secured credit cards. However, you may have to consider secured options if you are looking to boost your credit score.

The card is also a great gift to give to friends, family or employees for special occasions. It can also serve as a safety net if you have children in college who may need to borrow funds on a monthly basis.

Be sure to carefully review the terms and conditions prior to applying to make sure the card suits your needs.

Guide to Prepaid American Express Cards