There are a slew of new prepaid debit cards that promise everything from raising your credit score to roadside assistance, and have famous names attached to them. But are these debit cards really better than an account at a financial institution? Not necessarily. Here are the three most common myths about using prepaid debit cards and the bottom line:

1. But I can’t qualify to open an account at a a regular bank or financial institution.
According to a, 2009 FDIC survey, 9 million people, or 7.7 percent of American households, do not have accounts at a bank or credit union. In the Latino community, that number almost triples to 19.3 percent. Many people who use prepaid debit cards do so because they think they can’t qualify to open an account at a bank or join a credit union. However, there are many financial institutions that will work with you to get you back on track. These accounts are sometimes called “second chance accounts.” Of course, you could always pay the financial institution the money you owe, and have your file cleared at ChexSystems. That way, you’d be able to open an account at the financial institution of your choice.

2. But I can avoid fees by using a prepaid debit card.
News stories about banks raising fees or creating new fees are causing some customers to leave traditional financial institutions in search of greener pastures. But prepaid cards aren’t necessarily the answer. Prepaid cards from Russell Simmons, Suze Orman, and American Express, along with scores of others, are popping up everywhere. However, most of these cards have application fees, deposit/re-up fees, ATM fees, point-of-sale (POS) purchase fees, and sometimes even monthly membership fees. Doesn’t sound like you’re avoiding too many fees, does it?

3.  But I can rebuild my credit scores by using a prepaid debit card.
This is a common misconception. Prepaid debit cards act like any other debit card from a bank or credit union. Prepaid cards uses the money that you’ve deposited into your account. Since you’re not using any type of credit (charging to pay later), there is no way debit-card usage can improve your credit scores.

If you’re looking to restore your credit, many banks and credit unions offer secured credit cards. Check out BankRate.com for a list of secure credit card lenders and for helpful banking information. Just because your usage is being reported to a credit bureau does not mean that those reports will affect your scores.

If you choose to sign up for a prepaid card, make sure that you understand exactly what fees will be assessed and how much those fees will be. Before you sign up for anything that has to do with your money, read the fine print.