The biggest reason is the outrageous activation fees.   For a $25 Vanilla Visa Card, you must pay a $3.95 activation fee or 15.8% to buy a currency that isn’t even completely liquid (purchase must be made at a vendor that accepts Visa).  This begs the question, “Why not just give cash instead?”

With cash, there is no balance fee that starts deducting after just 7 months.  With cash, there’s no reason to even worry about balance or need to check how much is left on your prepaid credit card.

If you’re giving the Vanilla Card as a gift, ask yourself if the person receiving the gift would rather have $29 in cash or $25 loaded onto some pretend credit card.  The overwhelming majority of people are going to want the extra $4.

The only real benefit of a Vanilla prepaid card is anyone can make a purchase online.  However, if they have a credit card, why not just use that instead of a “prepaid credit card”?  They also offer “fraud protection” on the card (not sure how claims work on this) but you have to pay a shipping fee to get the card sent to you.  The biggest domination you can even buy is $100 so the shipping cost basically amounts to an insurance fee when you buy the card that makes the purchase especially not worth it.

I implore you to spend your money efficiently and don’t buy any prepaid credit cards.  Instead, give cash or a gift.  You shouldn’t have to pay an extra just to give someone money.  Rather than being a convenience at the store, it’s more of an inconvenience.