Answers to the Most Common Prepaid Card Questions

Simply put, the best prepaid cards are the ideal alternatives to carrying money around. You just load money onto the card and you can use it for purchase transactions and ATM withdrawals instantly.

If you are considering using prepaid cards but don’t know much about it, you’ll find all you need to know about this amazing financial tool in this article.

Prepaid Cards: Answers to Frequently Asked Questions

Are there different kinds of prepaid cards?

Basically, there are two different types of prepaid cards: single-use (non-reloadable) and reusable (reloadable) cards. Rebate cards, incentive cards, promotional cards, and gift cards are some classic examples of non-reloadable cards.

In other words, you only get to use them one time and you won’t be able to use them for other transactions after.

The best prepaid cards on the other hand can be loaded and reloaded with money whenever you deem fit. That means you can also use it for purchase transactions and ATM withdrawals given that there is money available on the card.

How are prepaid cards different from gift cards?

Unlike prepaid cards, gift cards come with a predetermined amount of money loaded onto them. It also cannot be reloaded once the balance on the card has all been used up. Gift cards are also usually designed to be given as gifts.

On the other hand, you can use your prepaid card as many times as you want as long  as there is balance available on the card. Once you deplete all the money on the card, you have the option to load money onto it so you can use it again.

Can prepaid cards help me build credit?

Prepaid cards won’t help you build your credit as you are not borrowing and repaying money. If anything, all you’re doing is accessing the money that you have loaded to the card.

To build credit, you need to borrow money and pay it back. The creditor also has to report your payment record to major credit reporting agencies.

How can I choose a prepaid card that suits my needs best?

Since there are various prepaid cards to choose from nowadays, you need to do some research before diving in. Fortunately, a quick Google search can already give you an idea if the card you are considering suits your needs and your lifestyle.

For instance, if you want a prepaid card you can use to shop online, it makes sense to get a card that will require a per-use purchase fee as opposed to a monthly fee.

However, if you use your prepaid card similar to a debit card, it would be ideal to go for one with a low monthly fee. It would also be a good idea to see if you can qualify for a fee waiver.

How can prepaid cards help me manage my money?

Nowadays, even those individuals who have access to banks are using prepaid cards,  thanks to all the amazing benefits they offer. One thing many people love about prepaid cards is the fact that it is a great and effective budgeting tool.

Some prepaid cardholders use different cards for various purposes. For instance, grocery money for the month is loaded on one prepaid card while the budget for food is loaded on another.

As soon as the balance on the card has been depleted, they will wait until the end of the month until they load money onto the card again.

In a way, prepaid cards can effectively help you manage your spending since your transactions (purchases and ATM withdrawals) will be limited by the balance that’s available on the card.

Once the balance has been depleted, your spending also stops automatically.

Prepaid Cards: Fast Facts You Should Know

Basically, the best prepaid cards work like a combination of a credit card and a checking account. Oftentimes, they are issued by bank holding companies and are branded by established financial institutions.

Before the best prepaid cards can be used, money needs to be loaded on the card first. Just like a credit card, prepaid cards can be used for purchase transactions (online and at merchants) as well as for ATM withdrawals. Also, akin to most credit cards, prepaid cards are honoured where most credit cards are accepted.

While prepaid cards share a few features in common with credit cards in terms of functionality, it’s financial side is more identical to that of a checking account. What that means is any amount spent or withdrawn will be deducted from the total balance available on the card. In addition, prepaid cardholders won’t be able to spend beyond the balance that’s on the card.

Prepaid Card Fast Facts

If you’re considering getting a prepaid card, here are some fast facts you need to know:

  • For some, prepaid cards are the convenient alternatives for various transactions that will require the use of credit cards. That being said, prepaid cards can be especially beneficial for people who don’t have access to banks or have minimal to zero knowledge in terms of how they work.
  • Prepaid cards can also be awesome for people who have no access to banking services or those individuals who are locked out of the banking system because they have poor credit scores.
  • Those who like to give gift cards as tokens would be delighted to know prepaid cards provide a much better alternative thanks to some of the beneficial features they come with. For instance, some prepaid cards come with protection in the event of loss or theft.
  • Most of the time, cash cannot be used to pay for online services or products. Fortunately, prepaid cards can be used to pay for transactions done online. Unlike gift cards, prepaid cards can also be used to withdraw money from the ATM.
  • Thanks to the topnotch benefits they offer, prepaid cards have evolved into one of the fastest growing niches in the financial sector. In fact, many experts project the number of prepaid cards sold to rise by as much as 22 percent annually from 2015 to 2020. Another prediction indicated that the total amount that will be loaded by prepaid cardholders will rise to as much as $116 billion by the year 2020.
  • To be able to pick the best prepaid cards for your needs, consider it best to analyse your spending habits first. From there, opt for a card that will charge less in areas where you are more likely to be charged. For instance, if you use your card for a lot of transactions, it would be wise to choose a prepaid card that will waive fees each time you exceed the money transaction limit.
  • Another beneficial tip you should keep in mind when looking for a prepaid card is structure that you can easily understand. You have to remember that some prepaid card providers use the flat-free model while others charge users for most card transactions. Analyse your monthly card activities so you can gauge if a flat-free model would be a good fit for you.

New User’s Quick and Comprehensive Guide to Prepaid Cards

Over the years, prepaid cards have become quite massive. In fact, a Pew survey revealed that prepaid card use exploded by as much as 50 percent from 2012 and 2014. Since they were first introduced, prepaid cards have evolved into one of the preferred payment methods especially for those who don’t have access to banks.

In addition, prepaid cards have also become a favourite among millennials. In fact, many see prepaid cards as the consummate alternative to the traditional bank accounts as well as other plastic cards.

How Well Do You Know Your Prepaid Cards?

If you’re like most people, it is likely that you’re considering getting a prepaid card. If you don’t know much about it, here’s your quick and comprehensive guide to one of the best financial tools now available.

What are prepaid cards?

Prepaid cards look almost identical to credit and debit cards. However, unlike the latter, prepaid cards are not linked to any bank account. They also have to be preloaded with money before they can be used. Also, unlike credit cards, you won’t be “borrowing” money from the issuer. Rather, you are using your own money, the one you preloaded in your card. 

Gift cards are also classified as prepaid cards. However, gift cards are designed for one time use only. Reloadable prepaid cards on the other hand are designed for repeated use, given of course that the card has money in it. Fortunately, there are several convenient ways to reload money onto a prepaid card.

How can I use my prepaid cards?

Just like credit and debit cards, prepaid cards can also be used for merchant and online transactions. They are also often affiliated with established credit and financial networks. That means they are also accepted and honoured in establishments associated with the network.

Each time you use your prepaid card, the purchase or withdrawal amount will be deducted directly from the balance that’s available on your card. In other words, your transactions will be limited by the balance that’s available on your card. 

If the amount available in the card is not sufficient to cover a certain purchase, your transaction will be declined. Suffice it to say, prepaid cards can be very beneficial budgeting allies as they won’t allow you to spend more than you can afford to. When used for ATM withdrawals, you’ll need a personal identification number (PIN).

How do prepaid cards differ from credit cards?

While both cards can be used for both ATM and purchase transactions, they have a few distinct differences. Case in point: when you have a prepaid card, you need to reload money onto your card before you can be used. 

It’s the opposite when using a credit card since you don’t need to shell out any of your own money. The issuer will pay for your purchase or withdrawal first and you will pay for the purchase or withdrawal at a later date.

Transactions using a credit card are considered a loan so your credit history as well as your statement balance will be reported to major consumer credit bureaus. Transactions you do using your prepaid card will not be reported.

What do I need to consider when choosing a prepaid card?

Prior to choosing a prepaid card, it is important that you figure out how you will be using it. For example, would you prefer reloading money through reload networks or direct deposits? If for example, you prefer the former, it would be best to pick a reload network that’s easy for you to go to. 

Another important thing you need to look into are the charges and fees. In line with this, you need to also identify the transactions you’ll usually do using the card. Ideally, it would be best to opt for a prepaid card that charges less for transactions you often do.

Practical Reasons to Get a Reloadable Prepaid Card

In today’s modern and highly connected world, convenient and cashless transactions made possible by credit, debit, and reloadable prepaid cards have become the norm. Nowadays, these highly innovative financial tools have become an integral part of many people’s day-to-day activities.

However, while several of these ingenious plastic cards are deemed a staple by many, it is surprising to note that not everyone is fully aware of their ins and outs. Unfortunately, this is especially true as far as reloadable prepaid cards are concerned since they are considered new compared to their other counterparts.

Practical Reasons to Get a Reloadable Prepaid Card

If you are one of the many who’s considering getting a reloadable prepaid card but still unsure if it’s the best fit for you, below are some of the practical reasons you can take into account:

You no longer have to deal with tedious and time-consuming credit and background checks

Let’s face it, while important, credit and background checks can be time-consuming, stressful, and just downright annoying. However, whether people like it or not, credit check are deemed an integral part of credit and debit card applications.

Since credit cards have credit capabilities, banks adhere to a very strict process in terms of background checks. These checks can sometimes include checking the applicant’s personal, financial, and even employment history.

When you’ve made significant financial blunders in the past (i.e. issuing bouncing checks, not paying your credit card bills on time, etc.), you’ll have a very slim to zero chance of getting your applications approved.

Fortunately, if you wish to obtain a reloadable prepaid card, you are spared from all the hassles of submitting financial documents or undergoing background checks.

More than anything however, you are spared from the risk of accumulating mounting debts as well as paying for over the roof interests, fees, and other charges.

You can use your reloadable prepaid card as an effective budgeting tool

Do you need help when it comes to managing your money properly? Do you always find yourself accumulating massive credit card debts? Do you find it hard to stop overspending? If you are experiencing any of the dilemmas mentioned, you’d be glad to know you have a reliable ally in reloadable prepaid cards.

Unlike credit cards, reloadable prepaid cards don’t come with credit capabilities. That means it is a lot easier for cardholders to stay on top of their spending since their spending will be limited to the amount that’s available on the card.

Once the balance in the card has been depleted, spending also stops automatically and users can’t use the card until money has been successfully loaded onto it again.

You can use it to shop online effortlessly

Whether you admit it or not, shopping in stores has become quite draining lately. You need to get dressed, load gas on your vehicle, brave the traffic, and deal with total strangers as well as sales clerks.

Fortunately, if you have a reloadable prepaid card, you can use it for online shopping so you don’t have to deal with any of the inconveniences and hassles associated with shopping in stores.

Regardless if it’s clothes, gadgets, or whatever else you need, you can purchase it online using your reloadable prepaid card. The process is both quick and effortless.

All that’s needed is for you to visit the site you want to purchase items from, pick the items you want, and order and pay for the item with just a few mouse clicks.

The items will be shipped to you and you’ll be done in just a few minutes right without the need to leave the comfort of your very own homes or offices.

What are the Peerless Benefits of Using Prepaid Card for Business?

Nowadays, prepaid cards have become the ultimate financial tool for people who don’t have a desirable credit, those who have issues managing their credit cards, or those who want to curb overspending. 

However, apart from making their way into the hearts (and wallets!) of consumers,prepaid cards for business have also found their way in the business world. 

In fact, for many, prepaid cards for business have become the consummate card of choice for those who are looking for exceptional budgeting tools they can use to ensure the smooth operations of their business. 

The Unbeatable Benefits of Using Prepaid Card for Business

Prepaid cards for business users can attest using them provides peerless benefits that are hard to miss. For starters, they are now used to set aside money for supply and logistics, employee meals and fare, travel and emergency funds, and many others.

So what are other reasons that make prepaid cards ideal for business? 

They are easy and straightforward to use. If anything, prepaid cards won’t require much of a learning curve. This is especially true if you’re already using other plastic cards like debit or credit cards. More often than not, they work pretty much the same way except that it’s not tied to any savings or checking account.

They are easy to load money to. Loading money onto your prepaid card is quick and effortless. However, that’s not all. With a prepaid card, you have the luxury to load any amount you wish at anytime you deem convenient. You also have the freedom to decide on the frequency you’ll load money on your card.

They can help businesses still to the budget they’ve set. While a lot of factors can help warrant the success of any business, proper use of resources, including money is one of the things that ranks high on the list. With a prepaid card, adhering to the budget you’ve set has never been easier. Monitoring of transactions is also a breeze.

The Enticing and Peerless Benefits of Using Prepaid Card for Business

Prepaid cards for business provide a lot of unbeatable benefits. Some of the most notable ones include:

● They can help businesses effectively and easily control and regulate their spending. This ability can help ensure businesses stay efficient.

● Loading money on the card is quick, straightforward, and hassle-free.

● Since no credit checks are required to obtain a prepaid card, application is fast and easy.

● Having and using a prepaid card will not have any impact whatsoever on your credit standing. In addition, it will not affect your credit in any negative way.

● No learning curve is needed when using a prepaid card since they work pretty much like the rest of the plastic cards.

● With a prepaid card, monitoring transactions has never been easier. This brings peace of mind as you are able to easily track your spending and stay on top of your finances at all times.

● Prepaid cards are not linked to any checking or savings account. This means prepaid cardholders are spared from paying huge overdraft charges or those exorbitant monthly interests, fees, and other charges.

Prepaid cards can be an exceptional financial tool so businesses can easily segregate business from personal expenses. The ability to keep both expenses separate can help you better manage both personal and business-related funds more effectively.

● Prepaid cards make it very easy to keep tabs on the spending habits and patterns of employees. In addition, with a prepaid card, monitoring expenses and spending limits is very easy. You are also spared from the risk of accumulating mounting debts you might not be able to pay off easily.

Prepaid Card 101: Understanding Prepaid Cards

The best prepaid cards are so similar in a lot of ways to debit and credit cards that many people often mistake one for the other. However, unlike credit or debit cards, the best prepaid cards are not linked to savings or checking accounts.  

Before prepaid cards can be used, money needs to be loaded on the card first. When used for purchase transactions or ATM withdrawals, the money is immediately deducted from the balance that’s available on the card. Once all the balance in the card has been depleted, cardholders have the option to load money on the card anytime they want.

For many, prepaid cards are considered the best alternative to cash, with the money loaded on the card in advance before it can be used. Many people also view prepaid cards as the consummate option for those who are unbanked or those who have poor credit history or no credit history yet.

Understanding Prepaid Cards

In a way, having a prepaid card is very similar to carrying actual cash minus all the risks involved. In other words, you need not worry about misplacing or having your money stolen since they are safely kept in your prepaid card.

If you’ve heard of prepaid cards but not familiar with how they are used, you’d surely find this article of massive value. Below are some prepaid card basics you need to know:

Regardless if you’re a teenager trying to learn great money management skills or someone with bad credit, you’d benefit from using a prepaid card. With a prepaid card, you can practice responsible spending habits as you go along.

As mentioned earlier, using a prepaid card is one of the best ways to carry money around wherever you go. With your money safely credited to your prepaid card, you won’t have to worry about losing your money or having shady people steal them from you.

Just like other plastic cards, prepaid cards can also be used for purchase transactions and ATM withdrawals. What’s even better is they can also be used for online transactions. That means you can easily purchase whatever it is that you want without having to leave the comforts of your home or office.

Those who are looking for ways to curb overspending or stick to a budget, a prepaid card can be a truly beneficial ally. Unlike credit cards, prepaid cards don’t come with credit capabilities. In other words, as soon as the balance on the card has been depleted, the spending also stops automatically.

Fortunately, you can use the card right away as soon as money has been successfully loaded onto it. Loading money on your prepaid card is both easy and straightforward. For instance, you can load money onto your card through secure online portals.

Prepaid Card Upsides

Why do people love prepaid cards? Primarily because they come with the following enticing benefits:

Security. Aside from keeping your money safe, prepaid cards can also be ideal for online transactions. While it would be great to be able to use your card for online purchases, what makes prepaid cards even better is they won’t put any of your personal details at risk even if you do online transactions.

Habit forming. Some people prefer to practice with their prepaid cards prior to using credit or debit cards. Undeniably, since prepaid cards don’t come with credit capabilities, it’s easy for you to develop responsible spending habits.

Card for the unbanked. As mentioned earlier, people who don’t have access to banks for one reason or another have a great alternative in prepaid cards. What’s even wonderful is you can easily obtain one without going through all those time-consuming and stressful bank applications.

Prepaid Cards: How Safe are They?

Considering getting a prepaid card? You’re not alone! In fact, in 2015 alone, more than half of the American population got themselves a prepaid card. This is a huge jump compared to just 19 percent in 2008, according to Synergistics Research Group.

To date, there are more than a dozen different types of prepaid cards available in the market. Many of these types of cards are designed to cater to a specific need. For instance, international prepaid cards can be the consummate option for those who travel overseas frequently.

For many of these avid travellers, international prepaid cards can be the ideal alternative to bringing credit or debit cards as it is less risky (read: any of the accounts linked to their accounts won’t be compromised in the event of card loss or theft) but it offers almost the same exciting benefits.

Get to Know Your Prepaid Cards

While the popularity of prepaid cards is no longer up for debate, it is sad to note that not everyone is already fully aware of all the amazing things they have to offer. If truth be told, many are not even aware of what the prepaid card basics are. Below are some of the common questions cardholders have about their prepaid cards and the answers to them:

How safe are prepaid cards?

Since you’ll be using a PIN when you withdraw money using your prepaid card, they are considered very safe. In fact, they are deemed way safer than carrying cash. Also, when your prepaid card gets lost or stolen, you have the option to report the matter right away so you can avoid any financial loss. Of course, losing cash is a totally different story as it is way harder to get them back when you lost them.

What is my liability if my prepaid card gets lost or stolen?

In most cases, the liability will depend on the issuer’s policies pertaining to lost or stolen cards. Others will depend on how quickly the card loss or theft has been reported. If you want to play it safe, consider it best to contact your card’s customer service as soon as you notice or find out your card is missing.

Can I use my prepaid card to pay for online purchases?

Most definitely! In fact, prepaid cards are considered one of the safest ways to pay for purchases online. While you are limited by the balance that’s available on your card, it is reassuring to know that you still get to enjoy the same level of comfort and inconvenience those who use credit or debit cards enjoy in terms of paying for products or services online.

What needs to be done when the balance on my card is not enough to cover for my purchase?

The answer to this is very simple—just load money onto your card. While not everyone may be aware of it, transactions you can do (regardless if it’s purchase or withdrawal) using your prepaid card will depend on the balance that’s available on your card. That means if the balance is not enough to cover for the purchase or withdrawal, the transactions will be declined.

This kind of setup is considered very beneficial by many especially those people who are trying to curb overspending or are learning how to manage their money accordingly. When the balance available on the card is no longer sufficient or has been completely depleted, you won’t be able to use the card until you load money onto it again.

The great news is loading money on the card is both quick and straightforward. Once money has been successfully loaded on the card, you can immediately use it for purchase transactions as well as ATM withdrawals.  

Choosing The Best Prepaid Card: Key Things You Should Consider

Over the years, the best prepaid cards have experienced a massive growth explosion. In fact, a Pew survey indicated that usage of prepaid cards rose by as much as 50 percent between 2012 and 2014.

Since they were first introduced, thebest prepaid cards have evolved into a convenient payment method for those who don’t have access to banks. It has also become a great alternative to traditional bank accounts among millennials.

What are prepaid cards?

Prepaid cards look very similar to debit and credit cards. However, unlike debit cards, it is not connected to any bank account and it needs to be preloaded with money before it can be used. Also, unlike credit cards, you will not be “borrowing” money from the issuer. Instead, you will be using your very own money, the one you preloaded in the card.

Gift cards are also considered prepaid cards. However, they are only designed for one time use. Reloadable prepaid cards on the other hand are designed for continuous use, given of course that there is money available on the card. The good thing is there are several convenient ways to load money onto the prepaid card.

How are prepaid cards used?

Prepaid cards can be used for merchant as well as online purchases. Oftentimes, prepaid cards are also affiliated with established payment networks. That being said, the cards are often honoured and accepted in places associated with he payment networks.

Each time the prepaid card is used, the amount of the purchase or withdrawal will be deducted from the balance that’s available on the card. In other words, you can’t spend more than the amount that’s available in the card. If the amount available is not sufficient to cover the expenses, the transaction will be declined.

Unknown to many, prepaid cards can also be used for ATM withdrawals and not just purchase transactions. To use the prepaid card for ATM withdrawals, a personal identification number (PIN) is needed.

How are prepaid cards different from credit cards?

While both cards can be used for purchase transactions and ATM withdrawals, they have several distinct differences. For instance, a prepaid card will require users to preload money on the account before it can be used while a credit card will allow you to “borrow” money for purchase transactions which you need to repay at an agreed time.

Since credit cards are considered a loan, the statement balance and the credit history are reported to major consumer credit bureaus. Transactions using the prepaid card on the other hand will not be reported.

What key things should you consider when choosing a prepaid card?

When looking for a prepaid card, you need to first identify how you will use it. For instance, do you intend to reload it through direct deposits or through reload networks? If you pick the latter, then it would be wise to pick a card with a reload network that’s convenient for you to go to. When choosing a prepaid card, you also need to consider if you’re going to use it for online payments and ATM withdrawals.

Another key thing you need to look into is the fees and charges. In line with this, you also need to consider how you intend to use the card. Understandably, you’d want to keep your fee payments to a minimum. That being said, look for prepaid cards that will charge you less for transactions you frequently do.

For instance, if you intend to use your cards for ATM withdrawals, consider it best to opt for a prepaid card that waives ATM fees when the cards are used at certain networks. Other prepaid card issuers will also waive monthly fees for cardholders who load a specific amount monthly.

Answers to the Top 5 Questions About Prepaid Cards

Over the years, the best prepaid cards have become one of the most trusted ways to make purchases both in stores and online. They are also considered as the ideal travel companion for those who travel outside the country on a consistent level.

While the best prepaid cards can share many surface similarities with credit and debit cards, they have distinct differences. For starters, prepaid cards need to be loaded with a predetermined amount before it can be used for purchase transactions or ATM withdrawals.

If you’re like many people, you’re probably considering getting a prepaid card or you’re considering getting one. However, do you know how to use your prepaid card to its full advantage? Start by getting to know the basics of your prepaid card.

Below are 5 of the top questions about prepaid cards and the answers to them:

Question No. 1: Are there regulations that apply to prepaid cards?

Regulations that apply to prepaid cards can differ based on where you live and the issuer of the cards. However, for prepaid cards that are provided by federally regulated financial institutions, they are covered in the Prepaid Payment Products Regulations.

As a general rule of thumb, consider it best to check all there is to know about the prepaid card before deciding which one to pick. Nowadays, most prepaid cards already have websites you can check. Make sure you do your due diligence and find out all there is to know about a prepaid card you’re considering.

Question No. 2: Do you have to pay for an activation fee? How much is it?

Some issuers of prepaid cards can charge users with an activation fee before the card can be used. However, the fees will depend on the issuer and the prepaid card chosen. In some cases, prepaid cardholders are charged depending on the card’s value or a pre-set rate might be associated with the card.

Question No. 3: Do prepaid cards have expiry dates?

Most prepaid cards don’t have expiry dates unless they are distributed as promotional cards. Depending on the issuer, a prepaid card might have an expiry date. However, you can always check with the issuer if there is an expiry and verify with them if there are any fees should you want a renewal card.

Question No. 4: What other fees apply to my prepaid card?

In most cases, the fees are determined by the issuer. In other cases, it will depend on the features of the prepaid card. For instance, prepaid cardholders can be charged a minimal fee when checking their balance, customising the card, reloading money onto the card, purchasing goods and services online, and replacing stolen or lost cards.

Also, it would be wise to check with your prepaid card issuer if you are required to pay an amount should you decide to cancel your card. Other prepaid card issuers might also charge cardholders if their card has stayed dormant for a long period to cover overdraft or monthly maintenance. In line with this, consider it best to go over and review the fees that apply to your chosen prepaid card.

Question No. 5: What happens if my prepaid card gets lost or stolen?

In the event that your prepaid card gets lost or stolen, you are advised to report the incident immediately to your card issuers. In most cases, prepaid card issuers will transfer whatever balance is left on the stolen or lost card to the new one. While you’re at it, consider it best to also check with your issuer if there are additional fees you are required to pay to replace the lost or stolen card.