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In case you hadn't noticed, opportunities to earn loyalty points with prepaid debit cards are few and far between. In fact, I've been unable to find any at all. Or rather, I hadn't been able to find one until recently, when United launched its MileagePlus GO Prepaid Card.....
This isn't just a debit card, it's a prepaid debit card. You load the card with, say $500, and use the card until you've made purchases totaling that amount. Then you reload the card and repeat the process.
Because it's a prepaid debit card, it's notably easy to get—even if you have poor or bad credit. Unlike applying for a credit card, there's no credit check. And there are no interest payments or late fees.
- Annual fee: $85
- Earn 1 mile per $1 spent on qualifying signature purchases, up to 2,500 miles per month
- Balances up to $1,000 earn 5% Annual Percentage Yield; APY is 0.5% on amounts over $1,000
- Foreign transaction fee: 3.5%
So, who might be good candidates for the MileagePlus GO card? It's easier to see who would be inappropriate candidates.
To begin with, anyone who can qualify for a mileage-earning credit card would almost certainly be better served with the credit card rather than the MileagePlus GO prepaid debit card.
For comparison purposes, the United MileagePlus Explorer Card has an annual fee just $10 higher than the GO card, at $95, but comes loaded with travel perks (free first checked bag, two free airport lounge passes, priority boarding)—not to mention no foreign transaction fees and a 40,000-mile sign-up bonus for new cardholders who charge $2,000 within the first three months. And with the Explorer card, there's no cap on earning United miles.
In terms of benefits and costs, the GO card simply delivers far less value than a comparably priced rewards credit card. On the other hand, if you cannot qualify for a credit card, and United miles are a priority, then the GO card is the way to go. The only way to go.
But the question naturally arises: Does it make financial sense to pay $85 a year to earn a handful of frequent-flyer miles, an asset that is in a continuous state of devaluation?
Arguably, a wiser approach would be to simply get a no-fee prepaid debit card with no bells or whistles, and concentrate on shoring up your credit score enough to qualify for a good travel rewards credit card.
The GO card is marketed as though the prize is frequent-flyer miles. The real prize is solid credit.
Editor's Note: This content is not provided by any bank, credit card issuer, airline, or hotel chain. Any opinions, analyses, reviews or recommendations expressed here are those of the author's alone, and have not been reviewed, approved, or otherwise endorsed by the aforementioned entities.