How do prepaid credit cards work?

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Prepaid credit cards are an asset to those that don't wish to use the traditional revolving credit found with traditional credit cards. Prepaid card can be used for transactions without the need for cash, checks or a bank account.

Loading

Prepaid cards can be loaded using direct deposit of a paycheck from an employer or by making payments in cash at a designated location, such as Western Union or MoneyGram locations.

Use

Prepaid credit cards work similarly to a gift card, as once loaded, prepaid credit cards can be used for shopping online, paying bills and use at point of sale credit card machines in stores and restaurants. The user cannot spend more than the amount that's available on the card, preventing over-limit fees and finance charges.

Fees

Prepaid cards may be associated with additional fees if a minimum balance or deposit level is not maintained. Others may have a small monthly fee assessed for the use of the card. ATM withdrawals may also cause charges to be assessed. Finance charges are generally not found on prepaid cards.

Buying

Cards are available for purchase in many retail locations, such as drug stores, discount stores and check cashing locations, and many options for buying cards are available online.

Caution

Prepaid credit card scams are plentiful on the internet. Be sure to purchase only from reputable retailers, such as Visa.com or MasterCard.com

Source:

Visa Reloadable Prepaid Card

MasterCard Prepaid Cards

Resource:

credit.com: PrePaid and Debit Cards

Walgreen's: MasterCard and Visa Cards

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How do prepaid credit cards work?

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