Prepaid reloadable cards are promoted as a convenient alternative for people who don’t have a checking account and the debit card that often comes with it. You can use them to make purchases at any store that accepts those brands of credit cards, to withdraw cash from participating ATMs, even to pay bills or buy stuff online. They’re a lot easier to get than a bank checking account; you just buy one in a store. But while some prepaid cards are credible stand-ins for bank account that are FDIC insured and offer strong consumer protections, others are poor deals laden with costly gotchas.

The American Express Bluebird card is one of the good ones, based on our previous assessment of 23 reloadable prepaid cards. You can add money by direct deposit of your paycheck, withdraw cash at 24,000 MoneyPass ATMs, deposit checks remotely, and make cash deposits at Walmart, all without a fee. You can also track your balances electronically and pay bills by paper check or using free online bill pay. The Chase Liquid prepaid card offers similar benefits but can be used for purchases at the 12 to 15 million locations where Visa cards are accepted, more than the mere 3.4 million that accept American Express. All of those features are part of the reason we rated Bluebird and Liquid best among prepaid cards.

If you decide that a prepaid card is a more convenient way to manage your spending money, shop carefully. Some charge fees for reloading or withdrawing money, or for just making a balance inquiry, among other drawbacks. Potentially most onerous are “overdraft” fees, when you’re charged because the card issuer allowed you to spend money that wasn’t in your account. But our biggest concern is highlighted by an incident last fall, when RushCard users couldn’t access their funds for more than a week. These cards don’t come with the same legal protections that users of debit cards tied to bank accounts get. New federal regulations, expected early this year, will help change that.

Editor's Note:
 This article also appeared in the January 2016 issue of Consumer Reports magazine.