PayPal Prepaid Mastercard® review: Worth the fees?

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In a Nutshell

The best feature of the PayPal Prepaid Mastercard® is that it can be linked to a PayPal account. But the card won’t help you build your credit and you’ll probably pay some fees to use it.

Marcie Geffner is a personal finance writer and has written for PNC Bank, Key Bank, BMO Bank, J.P. Morgan, Peoples Bank, Union Bank, LoanDepot, LendingTree and American Express. Editorial Note: Credit Karma receives compensation from third-party advertisers, but that doesn’t affect our editors' opinions. Our marketing partners don’t review, approve or endorse our editorial content. It’s accurate to the best of our knowledge when it’s posted.
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The PayPal Prepaid Mastercard® prepaid card, offered by The Bancorp Bank and NetSpend, can be linked to your PayPal account once you’ve activated it, but watch out for fees. And if you don’t have a PayPal account, you won’t be able to access all of the features.

PayPal Prepaid Mastercard® pros and cons

What we like Heads up
  • Can be linked to your PayPal account
  • No fee for direct deposit

 

  • Need PayPal account to access
    all features
  • $4.95 monthly fee
  • No credit reporting

  1. The rundown: Everything we like about the PayPal Prepaid Mastercard®
  2. Heads up: What you should consider before applying for the PayPal Prepaid Mastercard®
  3. Do the math: How to get the most out of the PayPal Prepaid Mastercard®
  4. The competition: How the PayPal Prepaid Mastercard® stacks up against similar cards
  5. Bottom line: Is the PayPal Prepaid Mastercard® right for you?

The rundown: Everything we like about the PayPal Prepaid Mastercard®

If you have a PayPal account, the PayPal Prepaid Mastercard® could have some benefits for you.

Link to your PayPal account

The best feature of thePayPal Prepaid Mastercard® is its ability to link to your PayPal account. Linking lets you …

  • Transfer money from your PayPal account to your card
  • View your card’s balance and transaction history online
  • Use PayPal’s online bill pay service
  • Open a linked interest-earning savings account

The savings account can only be funded through your PayPal prepaid card. It earns an annual percentage yield of up to 5% on the first $1,000 of the total balance. Beyond that, it’ll earn an APY of 0.5% on the additional balance. These rates are promotional and variable, so they can change without notice.

Once your card is activated, you can direct deposit all or part of your paycheck, federal income tax refund, or certain federal and state government benefits directly to your card.

Reload at 130,000+ locations

You can also add money at more than 130,000 NetSpend locations. The minimum reload amount is either $10 or $20, depending on where you reload your card. The maximum reload amount is $500. Funds stored on your card are insured by the FDIC, and if your card is lost, damaged or stolen, you can get a replacement with all of your funds transferred to it.

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Heads up: What you should consider before applying for the PayPal Prepaid Mastercard®

If you’re not a frequent PayPal user, there may be better options out there.

Better for those with PayPal accounts

Though getting a prepaid card doesn’t require a bank account, if you choose the PayPal Prepaid Mastercard®, you’ll need a PayPal account to access all of the card’s features.

Activation hassle

You’ll also need to activate your card. The card you receive when you purchase it at a retail location is just a temporary card with limited functionality. You’re allowed 120 days (about four months) to complete the activation process, and it can be a hassle.

You’ll have to provide the following details so the issuer can verify your identity:

  • Your full name
  • Physical street address
  • Date of birth
  • Home phone number
  • E-mail address
  • Social Security number

Once your card has been activated, you should receive a permanent personalized card that replaces your temporary point-of-purchase card.

The fees

The PayPal Prepaid Mastercard® comes with a variety of fees. For starters, you’ll pay a plan fee of $4.95 per month, and the first month’s fee will be deducted from your account within 36 hours from the first time you load the card. The fee to get cash from an ATM is $1.95, plus any bank or ATM operator fees. The ATM owner fee is waived if you use an Allpoint® network ATM.

It’s important to know that some fees aren’t set or disclosed by PayPal but instead depend on where you use the card and for what services. For example, you may have to pay a fee to reload your card, but the amount can vary depending on where you do it.

You may see further fees if you lose a card. Replacement cards cost $5.95. Delivery is free in seven to 10 business days. Three-day delivery costs an additional $20. One- or two-day delivery tacks on $25.

It won’t help you build credit

A prepaid card isn’t a credit card or debit card, and it won’t help you build or repair your credit history. That’s because neither the account nor any information associated with it is reported to the three main consumer credit bureaus.

If better credit is your goal, a secured credit card might be more appropriate for you, says Ben Jackson, chief operating officer at the Network Branded Prepaid Card Association, a trade group for the prepaid card industry.

Do the math: How to get the most out of the PayPal Prepaid Mastercard®

Whether you should use a prepaid card depends on what you need from financial services, says Jackson.

This type of card can help you receive direct deposits, make purchases online and budget your money more effectively. Those benefits may be valuable if you have little or no credit history or you want to avoid having debt.

“Individuals can use prepaid cards to avoid checking account, money order and check-cashing fees, while still being able to safely store funds, pay bills online and share money among family members with companion cards,” Jackson says.

The competition: How the PayPal Prepaid Mastercard® stacks up against similar cards

American Express Serve® Cash Back 1% cash back on purchases, added to your account after you use your card
Bluebird® by American Express No monthly fee
Mango Visa© Prepaid Card Up to 6% APY with Mango Savings™, a linked savings account

American Express Serve® Cash Back

You’ll get 1% cash back added to your account when you spend with this card. You can also add subaccounts for family members — heads up that these don’t earn cash back, however. These benefits, plus purchase protection for things you buy with the card, make the American Express Serve® Cash Back card an attractive option for a prepaid card. Expect to pay some fees — including fees for ATM withdrawals and cash reloads — with this card.

Bluebird® by American Express

There are at least three good reasons to like the Bluebird® by American Express card. There’s no monthly fee. No cash withdrawal fee if you use a MoneyPass® ATM. And no cash reload fee if you add money with cash or debit card at Walmart or do a direct deposit.

But do note that this card can cost up to $5 when you buy it at a retail location, and you’ll pay $2.50 to withdraw cash from other ATMs and up to $3.95 to add money at other retailers.

Other perks include purchase protection, fraud protection, a roadside assistance hotline and access to advance ticket sales for concerts, sports and more.

Mango Visa© Prepaid Card

An annual percentage yield of up to 6% on a balance anywhere from $1 to $5,000 in a linked savings account makes the Mango Visa© Prepaid Card a potential winner if you’re looking for a prepaid card. But there’s a caveat: To get that APY, you’ll have to make direct deposits of $800 more than your total out-bound transfers each month. If you don’t meet the $800 threshold, the account will earn a 2% APY, but balances above $5,000 earn just a 0.10% APY. Plus there are some fees, like a $3 monthly fee.

Easier-approval credit cards to help you rebuilt credit

Bottom line: Is the PayPal Prepaid Mastercard® right for you?

This prepaid card might be a good choice for you if you totally love all things PayPal, you’re not trying to build or repair your credit, and you’re willing to research the fees that might apply to how you want to use the card. But if none of those apply to you, there may be better options out there for you.