Prepaid debit cards are a rising trend among U.S. consumers, according a new report from card comparison tool CardHub. The alternative payment method allows big spenders to load up their accounts with a set amount to withdraw incrementally. Unlike traditional checking accounts, prepaid cards won't charge overdraft fees. 

Although, in the past, prepaid cards were often criticized for the number of fees charged, roughly 12 million Americans used them at least once a month in 2012. What's more, those users collectively loaded as much as $65 billion onto the cards--that's double the amount from 2009.

Why the upsurge? The number of fees charged by prepaid cards has diminished in recent years. CardHub counts an average of nine, compared with 30 that traditional checking accounts charge.

Business owners in particular stand to benefit from using prepaid cards, since the cards can make financing your employees easier. Users can limit employees' access to certain merchants, and better enforce corporate spending policies, for instance. It may also cost less to use electronic payments through prepaid cards, as opposed to the more traditional cash and check transactions.

While CardHub spokeswoman Jill Gonzalez notes that prepaid cards can pose drawbacks for business owners--they generally don't offer you the same rewards and support that a traditional business credit card or regular checking account would--there are also boons to this method, such as the inability to overdraw your account. 

Below are the best prepaid cards for those seeking an alternative checking account. That's the scenario, says Gonzalez, that best mimics overall consumer spending habits:

1. Bluebird 

The Bluebird prepaid card is probably the best of these four options for business owners; it has the fewest fees compared with any other prepaid card, and charges as little as $2.50 to withdraw cash from an ATM. Members will also be able to make direct deposits, pay bills online, and add checks through the associated Bluebird mobile app. 

2. American Express Serve

This prepaid card has no minimum balance or hidden fees. Like the Bluebird, it'll charge you $2.50 for ATM transactions, as well as a $1 monthly fee in most states. 

3. Green Dot 

This prepaid Visa card charges a slightly heftier monthly fee--$5.95--in addition to the standard $2.50 for ATM transactions. Its highlights, however, include free direct deposit and free online bill pay, with no transaction fees on purchases made within the U.S. 

4. Kaiku 

The Kaiku prepaid option charges a monthly fee of $3, with a slightly lower than average ATM transaction fee, $1.45. It also allows for mobile check depositing, and comes with its own Funds-ometer feature, which tracks how much you spend in a week on things such as food and entertainment, and then compares it with your average in the past 60 days. 

Published on: Jun 18, 2015