What is a prepaid card?
A prepaid card is a card that you use to access money that you load onto it in advance.
There are different types of prepaid cards. For example, “non-reloadable” prepaid cards cannot be used again after you use the initial value on the card. “Reloadable” prepaid cards are those that you can add money to and continue using over and over.
Prepaid cards are sold online, in retail locations, over the telephone, and by some banks and credit unions. Other types of prepaid cards include payroll cards, government benefit cards, and cards used to disburse student loans. Prepaid cards may look like debit cards, credit cards, or gift cards, but they are quite different. Most prepaid cards carry a network logo (Visa, MasterCard, American Express, or Discover) and can generally be used wherever cards for that brand are accepted.
You spend the money by using the card at various merchants, just as you would a debit or credit card. Prepaid cards can also usually be used for purchases online or over the phone. Some prepaid cards can be used at ATMs after you have registered your card. Registration is also necessary before reloading a card.
The fees and features of prepaid cards can be very different from one card to another, so it’s important to compare cards before buying one.