Direct deposit is one of the simplest, most efficient ways you can receive your paycheck each period. If your employer is able to pay you this way, direct deposit makes it possible for you to access your funds without waiting days for your check to clear.
Most often, workers who take advantage of direct deposit have their paychecks deposited into their checking or savings account. To do this, you would need to set up a bank account first.
However, if you don’t have a bank account, there is another way you can access all of the benefits that come with having direct deposit but without setting up a bank account. To access these benefits, you only need a prepaid debit card.
What’s a prepaid debit card?
Prepaid debit cards work and look like traditional debit cards. However, prepaid debit cards aren’t issued by banks. This means you can purchase a prepaid debit card without:
- Applying at a bank branch.
- Undergoing a credit check.
- The card issuer needing to check your overall bank history.
Because there aren’t many rules that determine who can get a prepaid debit card, they’re generally easier to obtain than bank-issued debit cards. You can also buy these items through different companies.
How do prepaid debit cards work?
In some ways, prepaid debit cards work like bank debit cards. That’s because you need to deposit money onto your card before you can begin using it.
If you have a prepaid debit card, you can either deposit money by:
- Having your funds deposited onto your card through direct deposit.
- Depositing cash onto your card.
- Transferring money from another account to this card.
Unlike credit cards, you can’t start using your prepaid debit card until you deposit money onto the card.
Furthermore, the maximum amount of money you can spend is whatever you’ve already put on your card. This means you can’t borrow money and pay it back later, like you can with a credit card.
Do I need a good credit score to get a prepaid debit card?
If you don’t want to set up a bank account or can’t open a checking account, there’s still a good chance you’ll be able to get a prepaid debit card. There are few restrictions that prohibit people from obtaining these cards.
For example, unlike when you open credit or debit card accounts through a bank, you don’t need to have a good credit score. Your credit score isn’t something companies need to check before they decide to issue you a prepaid debit card.
Since you’re responsible for loading money onto your card before you can use it, the card issuer isn’t at much risk when you use your card.
Furthermore, since nobody is lending you funds, your borrowing history doesn’t need to be considered before you can get a prepaid debit card.
What companies sell prepaid debit cards?
Before you can set up direct deposit without having a bank account, you need to purchase a prepaid debit card. Fortunately, there are many locations where you can purchase these items.
There are different types of prepaid debit cards you can buy. Certain cards are only sold through specific companies. Therefore, it’s important that you know which type of card you want before you buy one. The following businesses sell prepaid debit cards:
- Walmart – Walmart sellsreloadable, prepaid debit cards. Direct deposit is also a free service you can take advantage of with this card. As an additional perk, these cards also offer cash back options to users.
- American Express – You can open an account online with American Express to get a prepaid debit card. In addition to receiving your pay through direct deposit, these cards also offer benefits like the ability to pay your bills online with this card for free.
- Wells Fargo – The Wells Fargo EasyPay Card is another option you can take advantage of. Like other cards, this one also offers free direct deposit services. You can apply for this card online, in person or by phone.
There are other banks and companies that offer prepaid debit cards. Check with a branch near you to see if these services are available there.
How do I set up direct deposit?
Once you get your prepaid debit card, direct deposit is easy to set up. The process is the same as it is to set up direct deposit with a traditional checking account.
To set up direct deposit with your prepaid card, you need to obtain some information from the company that issued your card. Specifically, you need to know the following information:
- Bank name
- Type of account
- Account number
- Routing number
Even though your prepaid debit card isn’t attached to a bank, your employer still needs this information to process your direct deposit request. The company that issues your prepaid debit card will know how to answer these questions.
Once you have this information, you need to provide it to your employer. Usually, there’s a form you must fill out.
Then, your employer will take the information and set it up so that your paychecks are sent to that specific account each month. During this time, be sure to keep checking your card account balance so you know when your funds are deposited.
Can I have more than one prepaid debit card?
Just like you can have multiple bank accounts, you can also have more than one prepaid debit card.
If you want to obtain a second or third card, contact the company you want to apply for the card through. Then, follow all the steps you must complete in order to apply for your second card.
However, keep in mind that you probably won’t be able to split your direct deposit between different cards. If you want to keep your funds in separate accounts, you’ll need to transfer your money from one account to another.
Can I change my direct deposit from one card to another?
You may have a situation where you need to change where your direct deposit is sent. Fortunately, this is easy to do.
Whether you need to change your direct deposit from one prepaid card to another or from a prepaid card to a checking account, there are ways you can do this.
To change where your direct deposit goes, you need to contact your employer. You’ll need to provide the same type of information you needed when you signed up for direct deposit. However, the routing and account numbers must correspond to your new account.
This means you’ll likely need to fill out another direct deposit form. However, once this is done, you can begin having your paycheck deposited directly into your new account.