American Express is like that kid from your class who couldn't help but break the curve on every test. They don't mean to do it, they just crush everyone else's expectations and look puzzled when nobody else is playing at the same level. That explains why they've launched a prepaid debit card that's barely in the same league as their competition.

Before we cover the details, let's understand why American Express offers a prepaid credit card with such great terms for consumers. First, AmEx catches plenty of heat from merchants in "small transaction" categories, like gas stations, convenience stores, and fast food restaurants. They think American Express charges far too much in transaction fees, and their industry associations often complain in the press about whether they might stop accepting American Express. Offering strong rewards credit cards gives American Express leverage among frequent buyers, and an attractive prepaid debit card helps shore up demand among the rest of the consumer base.

Second, American Express still considers itself a "travel services company" more than a bank. Its purchase protection policies, fraud detection programs, and even its approach to replacing lost or stolen cards all emphasize customer service. Again, merchants may complain that all this service comes at higher transactional costs, especially when merchants have to bear the brunt of chargeback claims. Still, American Express' fans point out that accepting the company's cards gives businesses access to big spenders, especially the corporate expense accounts often tied to its gold and platinum accounts.

It's in that spirit that American Express offers an impressive prepaid debit card with unprecedented features. If you haven't been able to qualify for one of the company's charge cards, this really is the next best thing. You can even choose your favorite American Express color for your prepaid debit card: green, blue, gold or platinum. Each card carries a feature set that puts its competitors to shame:

  • No fees of any kind
  • Up to $1,000 purchase protection on every transaction
  • Free online account management
  • Free roadside assistance
  • Discounts, special offers and access to special entertainment pre-sales

The American Express prepaid debit card doesn't replace your bank, since you'll need to link it to an existing checking account. However, the company says in its marketing materials that it actively monitors prepaid card usage to determine whether or not you may qualify for a full-fledged AmEx card. Prepaid debit cards don't report usage on credit reports, but this is the only one we know of that can directly lead to a pre-approved credit card application.

Featured Partner Cards