Quick Answer: How Do Prepaid Cards Work?

Prepaid cards look like credit cards and spend like credit cards but there’s no credit behind them.

Unlike traditional debit cards, however, you don’t need a bank account to use a prepaid card.

You just load dollars directly onto the card and then use that balance for purchases.

How does a prepaid Visa card work?

Prepaid debit cards work almost like a combination of a credit card and a checking account. They are issued by a bank holding company and branded by major credit card companies, such as Visa, MasterCard, Discover or American Express. Money is loaded on to the prepaid card much like a gift card.

What is the best reloadable prepaid card?

7 Best Reloadable Credit Cards Online (2019)

  • Pink Netspend® Visa® Prepaid: Best for Direct Deposit.
  • Brink’s Prepaid Mastercard®: Best for Everday Use.
  • NetSpend® Visa® Prepaid Card: Best for Flexibility.
  • Chase Liquid® Prepaid Visa®
  • BlueBird® by American Express®: Best for Budgeting.
  • American Express® Serve®: Best for Onsite Shopping.

What are prepaid cards used for?

Prepaid cards are cards that you can load money onto in advance in order to make purchases or transactions. These cards are not linked to any bank accounts. For the most part, you can only use the prepaid card to spend up to the amount of money you loaded onto it.

How do prepaid credit cards work to build credit?

Once the initial deposit is paid, secured cards work just like unsecured ones: You can use them wherever credit cards are accepted, including online. You can build or rebuild your credit by using the card responsibly and paying your balance on time. You incur interest if you carry a balance.

Where can you use a prepaid Visa card?

Because prepaid cards are associated with major card networks – Visa, MasterCard, American Express and Discover – they can be used anywhere debit cards can: to buy groceries, gas up your car, even pay bills online.

Can I withdraw cash from a prepaid Visa card?

Though the two cards are similar, only prepaid cards can be used to get cash from an ATM or to get “cash back” from a merchant. Gift cards cannot. Read the terms and conditions on the back of your card to know for sure.

What prepaid debit card has no fees?

The Bluebird® by American Express is about as low-fee as you get, charging no monthly fee, no transaction fees, and no direct deposit fees. Reloading is also free through direct deposit, mobile check capture, or by using cash or a debit card at Walmart.

How do Reloadable prepaid cards work?

You can fund the reloadable Visa Prepaid card through a variety of ways, such as through direct deposit or with cash at a participating retail location. It is accepted anywhere that Visa Debit cards are accepted. A prepaid card is not linked to a checking account. Instead, it is pre-loaded with a balance of funds.

Which prepaid card has lowest fees?

Best Prepaid Cards Comparison

Activation Fee ATM Fees
Fifth Third Access 360° Reloadable Prepaid Card $0 $0 with in-network ATMs
MOVO Virtual Prepaid Visa Card $0 $2
NetSpend® Visa® Prepaid Card $0 $2.50
American Express Serve® (currently unavailable through our site) $0 $0 at MoneyPass ATMs

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What are the benefits of prepaid cards?

The advantages of prepaid debit cards include being safer than carry cash, worldwide functionality due to Visa and MasterCard merchant acceptance, not having to worry about paying a credit card bill or going into debt, the ability for anyone over the age of 18 to apply and be accepted without regard to credit quality

Are prepaid cards safe?

With prepaid debit cards, you only spend money that’s loaded on the card. Keeping money safe when traveling. Prepaid debit cards are easily used overseas. And there’s another upside: If your card is stolen, your losses are limited to the amount on your card.

What is the difference between a Visa gift card and prepaid card?

The biggest difference between the two reflects their permanence: prepaid cards can be reloaded and used indefinitely, while gift cards can generally only be used until the dollar amount on them is exhausted.