What’s the best holiday gift?

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  • Gift cards and prepaid gift cards are ideal for practical or last minute gifts.
  • A prepaid debit card is rechargeable, but some may require additional fees.
  • If you don’t know where your recipient likes to shop, prepaid debit cards can be a great option.
  • Read the insider’s guide to the best prepaid debit cards of 2021.

Giving gifts is already a headache if you get something at the last minute or try to figure out what a person wants.

But if you look at the card options – to avoid handing out cash – and see prepaid debit cards mixed with gift cards, which is the better choice? After all, aren’t all prepaid cards the same?

They are not. But we can help you distinguish prepaid debit cards from gift cards so you can choose the perfect gift for your recipient.

What is the difference between a prepaid debit card and a gift card?

A prepaid debit card allows you to load a specific amount onto a card (similar to a gift card), but it works like a debit card. You can make transactions or withdraw money at an ATM. It also works in any store as prepaid debit cards are usually part of payment networks like Visa or Mastercard.

The main thing that you need to worry about when purchasing a gift card is making sure you are choosing the right store. But if you get a prepaid debit card, it’s a bit trickier.

Some prepaid debit cards incur additional charges to use certain features. You may need to be careful with registration fees, monthly fees, and top-up fees, which is not ideal when giving gifts. If you also want your recipient to take full advantage of their debit card capabilities, you’ll need to learn a bit more about the prepaid card company and see if they have a large network of free ATMs.

Pros and Cons of Prepaid Debit Cards

Advantages and disadvantages of gift cards

What’s the best holiday gift?

Your decision may ultimately depend on which card is most practical and easy to use for your recipient.

A gift card may be a better choice because it will show you that you will spend more time planning something thoughtful based on what you know about the person. You also won’t have to worry about the extra charges.

Gift cards can also make more sense for kids because you don’t put any pressure on parents to teach them how to use a prepaid debit card.

A prepaid debit card may be worth exploring if your recipient lives overseas (prepaid debit cards are a common way to send money overseas) or if you don’t know their preferences. It offers more flexibility, so if you’re not sure where the person is shopping, you’ll know they can use it anywhere.


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