Loading funds onto a pre-paid debit card offers the convenience of paying with plastic, just like a traditional debit, credit or ATM card.
Bankrate.com's Senior Financial Analyst, Greg McBride, said the re-loadable cards come with additional perks.
"They don't have to worry about having a bank account connected to it or worry about the hangover of high-cost credit or high-cost debt if they were using a credit card," McBride said.
Pre-paid debit cards can also help with fraud-prevention."They can use them as a way to make online purchases without exposing their credit card information online," McBride said.
However, these re-loadable cards have a reputation for surprising consumers with additional charges.
"A lot of very high fees, not just fees for various transactions but the type of things that can really add up quickly," McBride said.
There are ways to avoid needless fees. First, consumers should shop around for options.
"The fee structures on these cards can be very different. Some charge just one, flat, monthly fee while others charge for various types of transactions," McBride said.
Then, determine your needs.
"If you're going to use this in lieu of a traditional bank account, maybe you want to go with a card that has just one flat monthly fee. That really helps you quantify how much this is going to cost you on a monthly basis," McBride advises.
Or, you may utilize it for specific transactions.
"Whether its online purchases or one or two purchases, then maybe you want to forgo the card that has the monthly fee and focus on one that charges on a per-transaction basis but doesn't charge for the types of purchases that you want to do. Very few of the cards that we surveyed actually charge you for making point-of-sale purchases," McBride said.
Whichever card is best for you, McBride said to make sure it carries Federal Deposit Insurance.
"If you're loading money onto that card, you need to have the very same protection on that money that you would if it was parked at a bank or federal credit union."
McBride noted that all 24 widely issued prepaid debit cards that Bankrate.com recently surveyed charge fees of some kind.