Prepaid cards have value as account supplements, not just replacements.

Open-loop prepaid cards are used primarily as account replacements by people without bank accounts or as gift cards by those who do have bank accounts. Recent research indicates that open-loop prepaid cards are increasingly used by U.S. consumers to supplement spending on their credit and debit cards. Prepaid delivers a budgeting tool and a shield that protects the cardholder’s other accounts.