what does prepaid travel card mean

Siri Stafford/Getty Images

Advertiser Disclosure

What to know about prepaid travel credit cards

Prepaid travel cards are one more way to access cash while traveling the globe

Published: December 15, 2022

Author: Allie Johnson

Author: Dan Rafter

Editor: Brady Porche

Reviewer: Kaitlyn Tang

How we Choose

Prepaid travel cards can make it easy to access cash while you’re traveling abroad, but remember that convenience comes with limitations.

The content on this page is accurate as of the posting date; however, some of our partner offers may have expired. Please review our list of best credit cards , or use our CardMatch™ tool to find cards matched to your needs.

Finally ready to take your next international trip? Whether it’s a business meeting in Brussels or a foodie’s tour of Florence, you might consider packing a prepaid travel card for your trip.

Prepaid travel cards let you access cash in your destination’s local currency without the risk of using your debit card. They also let you avoid the high fees of credit card cash advances or the hassles of scrounging up traveler’s checks before you depart.

But, be careful — despite the convenience of prepaid travel cards, they come with their own set of fees and limitations (most notably ATM withdrawal and purchase amount caps that could put a damper on your vacation).

“A prepaid travel card is one tool in a diverse travel wallet,” said Julie Hall, internal communications manager for Hilton Grand Vacations and former public relations manager for AAA, in a previous interview. “It’s one of the most convenient ways to get money while traveling.”

Let’s take a look at everything you need to know about prepaid travel cards — from how they work to the pros and cons of using them for your travels.

• How do prepaid travel cards work?

Prepaid travel cards work much like general-purpose prepaid cards, except that they typically offer special features and perks designed for travel — which can vary based on the issuing bank.

In general, to use a prepaid travel card, you purchase the card and simultaneously load it with the funds you want to spend on your trip, up to the maximum amount allowed on the card. (For example, the PayPal Prepaid Mastercard® , a general prepaid card, allows a maximum balance of $15,000.)

Once you’ve arrived at your destination, you can use your prepaid card to make purchases directly (much like you would with a debit card). You can also use it at an ATM to get cash in that destination’s currency.

Depending on the card issuer, you’ll be able to log in to a mobile app or your online account to check the balance, review your purchases and see any any account charges.

• What are the benefits of a prepaid travel card?

Why not just take cash, your credit cards and your debit card the next time you travel to an international destination? Why would you also take a prepaid credit card?

If you lose your card, thieves only have access to the loaded cash

If a thief gains access to your prepaid card abroad, they’ll only have access to whatever funds are loaded onto the card (unlike debit cards, which can provide thieves access to your bank account, or credit cards, which a thief can charge up to a certain limit).

Further, the network through which a prepaid card is offered may provide a zero liability policy , though, overall, prepaid cards don’t offer the same breadth of protections as debit and credit cards (think chargebacks and fraud alerts).

More convenient than traveler’s checks

Prepaid travel cards also provide more convenience than, say, traveler’s checks (which, yes, still exist). Getting traveler’s checks before you go can be a hassle, and you might also be surprised at how many retailers across the globe no longer accept them. As a result, prepaid cards are often a better option than these paper checks.

• What are the drawbacks of a prepaid travel card?

Like most financial products, prepaid travel cards come with pros and cons. Here are some of the drawbacks of using one:

Foreign transaction fees, among others

Travelers should be wary of the fees connected to prepaid cards, as they can add up to a lot of money during an international trip. Many prepaid cards carry foreign transaction fees. Today, it’s far easier to find credit cards with no foreign transaction fees than to find prepaid cards without them.

Further, prepaid travel cards may also charge a card purchase fee, ATM withdrawal fee, higher foreign ATM withdrawal fee, inactivity fee and a fee to get any remaining balance back by check.

No help for your credit score

If you charge restaurant meals, souvenirs and tickets to a traditional credit card and pay your bill on time, your three-digit credit score will receive a boost. This doesn’t happen with purchases you make with prepaid travel cards, because your prepaid card activity isn’t reported to the national credit bureaus .

If you don’t keep track, you could run out of funds

If you’re used to swiping a credit card without much thought, there’s a chance a prepaid card could leave you high and dry when you go to make a purchase. Just be sure to keep tabs on the amount of money you’ve loaded — and spent — on your card.

Prepaid travel card tips

Prepaid travel cards do come with some potential hurdles. Here are some tips for avoiding the most common downsides of these cards:

• Check the fees associated with your card (or potential card): Prepaid cards can charge fees that existing debit and credit card holders aren’t used to, so it’s important to read the fine print before swiping. For example, the Netspend® Visa® Prepaid Card charges a $5.95 inactivity fee per month after the card has been idle for 90 days.
• Verify the card will work at your destination: Double-check with your issuer that your prepaid card will be accepted where you’re traveling. Even a card that’s designed for international travel might not work in specific locations due to restrictions from U.S. trade sanctions.
• Know the limits: Prepaid travel cards typically have limits that could throw a wrench into your trip if you don’t understand them ahead of time. For example, some cards can have a daily reload limit as low as $500 (or as high as $7,500, in the case of the Netspend Visa card). Again: Be sure to read through your card’s fine print before embarking.
• Avoid holds at all costs: In a sense, prepaid travel cards work like debit cards. Be sure to avoid using a prepaid travel card to reserve a hotel room or a rental car, which can trigger a hold that could tie up hundreds of dollars of your cash for a week or longer. Instead, use a credit card to reserve these items, then use your prepaid card to pay the final charges.

Should you use a travel credit card instead?

If the drawbacks of a prepaid travel card outweigh the benefits, you might be better off signing up for a travel credit card  or using one you already have as your primary payment method while traveling.

Travel credit cards almost always have zero fraud liability, which can set your mind at ease in the event your card is lost or stolen . They also let you earn rewards for your spending, and many offer purchase and trip protection and have no foreign transaction fees. Some even offer perks such as access to airport lounges where you can get complimentary food and drink. And, depending on your credit limit, you may have more spending power with a credit card than a prepaid card.

That said, they can also have pitfalls. Not all travel credit cards are accepted in all countries. For example, Visa and Mastercard are widely accepted, while American Express and Discover have a smaller international presence. And, depending on your location, some merchants may require chip-and-pin cards or may not accept payment cards at all.

It’s advisable to carry a few different payment methods with you (credit, debit and prepaid) when traveling, along with some local cash. Also, notify your credit card company about your travel plans, lest they flag your card as stolen and cancel it.

Bottom line

A prepaid travel card doesn’t come without downsides, but if you want an easy way to access cash in your destination’s currency — and want a quick way to pay merchants once you arrive at your international destination — the ease of using them might make your trip a less stressful one.

Editorial Disclaimer

The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

Allie Johnson is an award-winning freelance writer covering personal finance, business and lifestyle. She loves tracking down tips, tricks and cautionary tales about credit cards and money.

Dan Rafter has covered personal finance for more than 15 years for publications ranging from The Washington Post and Chicago Tribune to Wise Bread, HSH.com and MoneyRates.com. His work has also appeared online at the Motley Fool, Fox Business, Huffington Post, Christian Science Monitor and Time.

On this page

• Prepaid travel card perks
• Stick with travel credit card?

Essential reads, delivered straight to your inbox

Stay up-to-date on the latest credit card news 一 from product reviews to credit advice 一 with our newsletter in your inbox twice a week.

By providing my email address, I agree to CreditCards.com’s Privacy Policy

Your credit cards journey is officially underway.

Keep an eye on your inbox—we’ll be sending over your first message soon.

Learn more about Education

Best credit cards for international travel

The best credit cards for international travel can make traversing the globe a more comfortable and rewarding experience. Compare our top picks to see how they work for your travel style and goals.

Best no-annual-fee travel credit cards of 2023

Looking for the best travel rewards with no annual fee doesn’t have to be hard. There are plenty of great credit cards you can explore to help you earn and redeem rewards for travel.

Best credit cards for trip cancellation

10 credit and money tips for travel abroad

TSA PreCheck vs. Global Entry vs. Clear: Which is best for you?

How do travel rewards credit cards work?

Explore more categories

• Card advice
• Credit management
• To Her Credit

Questions or comments?

Editorial corrections policies

CreditCards.com is an independent, advertising-supported comparison service. The offers that appear on this site are from companies from which CreditCards.com receives compensation. This compensation may impact how and where products appear on this site, including, for example, the order in which they may appear within listing categories. Other factors, such as our own proprietary website rules and the likelihood of applicants' credit approval also impact how and where products appear on this site. CreditCards.com does not include the entire universe of available financial or credit offers. CCDC has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover.

Since 2004, CreditCards.com has worked to break down the barriers that stand between you and your perfect credit card. Our team is made up of diverse individuals with a wide range of expertise and complementary backgrounds. From industry experts to data analysts and, of course, credit card users, we’re well-positioned to give you the best advice and up-to-date information about the credit card universe.

Let’s face it — there’s a lot of jargon and high-level talk in the credit card industry. Our experts have learned the ins and outs of credit card applications and policies so you don’t have to. With tools like CardMatch™ and in-depth advice from our editors, we present you with digestible information so you can make informed financial decisions.

Our top goal is simple: We want to help you narrow down your search so you don’t have to stress about finding your next credit card. Every day, we strive to bring you peace-of-mind as you work toward your financial goals.

A dedicated team of CreditCards.com editors oversees the automated content production process — from ideation to publication. These editors thoroughly edit and fact-check the content, ensuring that the information is accurate, authoritative and helpful to our audience.

Editorial integrity is central to every article we publish. Accuracy, independence and authority remain as key principles of our editorial guidelines. For further information about automated content on CreditCards.com , email Lance Davis, VP of Content, at [email protected] .

Most links in our content provide compensation to Slickdeals. Applying for and maintaining consumer credit accounts is an important financial decision, with lasting consequences, and requires thought, planning and comparison shopping for the offer that best suits your personal situation. That's why we offer useful tools to evaluate these offers to meet your personal objectives. Be sure to verify all terms and conditions of any credit card before applying.

Search Slickdeals Money

Featured articles.

What Are Points and Miles Worth this Summer?

Southwest Credit Card Offers: Earn 85,000 Bonus Points

5 Ways the Southwest Rapid Rewards Plus Credit Card Makes Traveling Easier

Southwest Rapid Rewards Priority Credit Card Review: Premium-ish Perks for Southwest Devotees

Tips and guides to help you navigate the world of personal finance

How Do Prepaid Travel Credit Cards Work?

• Share on Twitter
• Share on Facebook
• Share on Email

Most products on this page are from partners who may compensate us. This may influence which products we write about and where and how they appear on the page. However, opinions expressed here are the author's alone, not those of any bank, credit card issuer, airline or hotel chain.

Sticking to your travel budget isn't always easy. Using a prepaid travel card is one way to help keep your money safe, and can make sense for those who want to avoid overspending while on vacation. 

Prepaid travel cards are an alternative payment option to consider, especially when traveling outside of the U.S. They work like other prepaid debit cards but often come with valuable extra benefits that are perfect when traveling abroad, like loading other currencies onto them. 

Keep reading to learn more about prepaid travel cards, how they work and whether they are right for you. 

What Are Prepaid Travel Cards and How Do They Work?

Prepaid travel cards are prepaid debit cards that make spending easier when traveling outside of the U.S. Sometimes referred to as international prepaid cards, these cards allow you to load funds using specific currencies before you travel, making them a good tool if you're trying to stick to a specific trip budget. Cardholders can even reload additional funds as needed. 

Several payment networks like Mastercard and Visa offer prepaid travel cards. These cards are accepted almost anywhere worldwide and allow you to lock in exchange rates before traveling internationally. They also provide an extra level of security with zero liability protection from unauthorized purchases if your card is lost or stolen. 

Types of Prepaid Travel Cards

Most prepaid travel cards fall into two categories. 

1. Multicurrency Prepaid Travel Cards

Multicurrency prepaid travel cards allow you to lock in a specific exchange rate in several currencies before you travel. You avoid paying current exchange rates at an international ATM or merchant by loading funds ahead of time. 

These cards can be used wherever they are accepted. Since many of these cards are tied to payment networks like Visa or Mastercard, consumers have few limits when using prepaid travel cards. 

Not all multicurrency prepaid travel cards offer the same currency options. Some cards only offer a handful of the more popular currencies — the Australian dollar, British pound, Canadian dollar, the euro, Japanese yen and Mexican peso. Other cards offer over 50 different currencies. 

2. General Travel Prepaid Cards

General travel prepaid cards work like other prepaid debit cards where you can preload funds into the card, but with a few extra features handy for travelers. 

Some features of general travel prepaid cards can include:

• International ATM Use 
• Modern Features Like Chip and PIN Capability
• Emergency Cash Assistance
• Quick Card Replacement  

How Are Prepaid Travel Cards Different from Credit Cards? 

Many consumers are familiar with  travel rewards credit cards that can be used to rack up points for travel expenses, but not many know about prepaid travel cards. Prepaid travel cards are different from regular credit cards in a variety of ways, but they work similarly to secured credit cards with self-loaded funds acting as your credit line. Money is deducted from the prepaid card balance with every transaction until the funds are exhausted. However, consumers can add more funds to their prepaid cards using an outside funding source. 

Here are the major differences between prepaid travel cards and credit cards. 

• Prepaid cards are preloaded with your own money.  You can control your spending with a prepaid travel card based on how much money you load onto the card.
• Prepaid cards don't charge interest . That's because you can only use funds loaded onto the card, not borrow from a credit line like a credit card. You could end up paying foreign exchange fees with a prepaid travel card or a credit card, although many of the top travel rewards credit cards don't charge this fee. 
• Prepaid travel cards don't have any bearing on your credit score or history .  They can't help boost your credit  or hurt it because they're not reported to the credit bureaus since you use your own money to fund the card.

Pros & Cons of Using a Prepaid Travel Card

Just like any payment option, there are benefits and drawbacks to using prepaid travel cards. Here are some of the pros and cons to consider before getting a prepaid travel card. 

Pros of Prepaid Travel Credit Card  

• Helps you stay within your travel budget.
• Lock in the currency exchange rate in advance.
• Safer than a debit card or carrying cash.
• Load multiple currencies onto one card.
• Chip and PIN technology.
• Use at ATMs and shopping online.

Cons of Prepaid Travel Credit Card 

• Foreign transaction fees and ATM fees, among other fees.
• Doesn't help you build credit.
• No overdraft option.
• May not be able to use at hotels that only take credit cards.
• Few (if any) travel protections.
• No travel rewards.

Are There Fees With Prepaid Travel Cards?

While there are several benefits to using prepaid travel cards, there is one negative attached to most cards — extra fees. You could face several fees if you choose to use a prepaid travel card, including: 

• Foreign transaction fees : Many cards charge a fee when you use a prepaid card while traveling abroad. You could see charges of up to 4% or higher on some prepaid cards. 
• Monthly fees : You could also pay a monthly fee for using a prepaid card. Some cards have fee structures that include a monthly fee, while others opt to charge cardholders per transaction instead. Some cards charge fees upwards of $9.95 per month. Some cards waive the monthly fee by meeting balance or deposit requirements. 
• ATM fees : Using a prepaid card at an ATM typically involves paying a fee, whether used at a domestic or international ATM.

Other common prepaid card fees include: 

• Initial load fee
• Inactivity fee
• Transaction fee
• Cash reload fee
• Balance inquiry fee
• Replacement card fee

Fees attached to your card may depend on the specific card, payment network or how you use the card.

Is My Money Safe On A Travel Card?

One big benefit of prepaid travel cards is the security they provide, such as: 

• Funds are not linked to your bank : Unlike a debit card, a prepaid card isn't attached to your bank account. If your card is lost or stolen, you're less likely at risk of someone emptying your checking account. Your exposure is limited only to the funds on the card itself. 
• Chip and PIN authentication : Many prepaid cards also feature chip and PIN technology, giving you another safeguard if your card is stolen. You can contact your card provider to freeze the card account if necessary.  
• Zero-liability fraud protection : Several popular travel prepaid cards come with zero-liability fraud protection. Regardless of the card, prepaid cards must carry the same level of fraud protection as debit cards. 

Can I Get A Prepaid Travel Card If I Have Bad Credit?

Because prepaid cards are secured with cash, there’s typically no credit check involved. That's what makes prepaid cards an attractive good option for individuals with bad credit who may have a hard time qualifying for a travel credit card. If you have cash, generally, you can get a prepaid card. 

Unfortunately, prepaid travel cards don't help you build credit either. There are no monthly payments to report to credit bureaus. Prepaid cards also don't impact your credit utilization ratio, credit mix or length of credit history, all factors that could improve your credit. A prepaid card could be a good option short term when traveling but shouldn't be a substitute for other payment options that can help improve your credit. 

Are Prepaid Travel Cards Worth It?

A prepaid travel card could be worth it for individuals who are seeking a safe payment option when traveling internationally and want to keep their spending abroad in check. It can also help to lock in a lower exchange rate instead of leaving it to chance with fluctuating rates. 

But prepaid cards have their limitations too. They usually do not come with travel rewards or allow the cardholder to build credit by using the card. Don't forget that most prepaid cards also charge foreign transaction fees and other fees like monthly fees or inactivity fees. 

Shop around if you're thinking about getting a prepaid card for your next international trip. Compare card fees, features and benefits to find one that fits your needs and is accepted in places you travel. Another option is to use multiple payment options when you travel. Using a prepaid card in combination with a credit card and debit card allows you to use each card in situations where it's advantageous. This also protects you if you run into any issues with your prepaid card. 

Kevin Payne

Kevin Payne is a personal finance, credit card, and travel writer. He is the family travel and budget expert behind FamilyMoneyAdventure.com. Kevin lives in Cleveland, Ohio, with his wife and four kids. His work has appeared on several websites, including FinanceBuzz, Credit Karma, Millennial Money, Club Thrifty, Student Loan Planner and Slickdeals.

Follow the Money

Get all the latest finance topics and tips delivered straight to your inbox weekly.

Slickdeals Money Guide Tips and guides to help you navigate the world of personal finance Learn More

How to Rent a Car if You Don’t Have a Credit Card

3 Best Credit Cards for International Travel

4 Ways to Send Money Internationally

6 Best Banks for Global Travelers

Venmo Debit Card Review: Is It Worth It?

How Do Gas Credit Cards Work?

A Simple Guide to Credit Card Travel Protections

9 Most Common Bank Account Fees (and How to Avoid Them)

AT&T Points Plus Credit Card from Citi Review: Up to $240 in Annual Statement Credits

Citigold® Checking: Earn Up to $2,000 for Opening a New Account

Where to Store Your Crypto: Online, Hardware or Paper Wallets?

Automatic Bill Payments: How It Works and When to Use It

Are Prepaid Travel Cards a Good Idea?

They can help with budgeting but compare them with other debit and credit card options before you go.

Getty Images

A prepaid travel card can offer fraud protection, with your liability limited to $50 if you report it within two business days of learning of the theft.

Whether you're planning a trip to Bali or Boston, staying on a budget and keeping your money safe is essential. A prepaid debit card can help.

Prepaid travel cards function similarly to general-purpose prepaid debit cards but offer extra perks that can make your life a little easier when you're abroad. However, they also come with limitations and other drawbacks that may give the casual traveler pause.

What Are Prepaid Travel Cards?

Prepaid travel cards, also sometimes called international prepaid cards, can make spending easier when you're outside the country.

There are two primary types of prepaid travel cards:

Multicurrency prepaid travel cards. These cards allow you to load cash in specific currencies onto your card before you go on your trip, letting you lock in your exchange rate instead of paying the current rate at the ATM or point of sale.

You can then use the card wherever its payment network, such as Visa or Mastercard, is accepted.

You can't load cash with just any currency, though. Even major prepaid cards may be limited to only a handful of currencies. For example, some have only six currencies available: the euro, British pound, Australian dollar, Canadian dollar, Japanese yen and Mexican peso.

General travel prepaid cards. These cards don't differ much from traditional prepaid debit cards. However, they're more likely to offer certain features that can come in handy when you're overseas.

Examples include chip and PIN capability, emergency cash and card replacement, and international ATM use.

Not all prepaid cards have a chip though, and that can be a problem, says Quentin Telep, director of financial services for AAA National. "In many countries, especially in Europe, they've had the chip functionality for many years."

You may have difficulty using a chipless card at unmanned kiosks and other automated payment points.

What Are the Benefits of Having a Prepaid Travel Card?

If you're planning a trip within the U.S., you likely won't need a travel prepaid debit card. But if you're traveling internationally, you may gain some benefits from doing so.

It can help with budgeting. Sticking to your vacation budget can be tough. Traveling is a time to let loose and live a little, and it can be easy to spend more than you originally planned.

"It's a little easier perhaps to overrun the credit card when you're on vacation and you're not really thinking about how much you're spending," says Mike Clark, co-founder of PrepaidCards123, an online tool for comparing prepaid debit cards. "You may want to set aside a specific amount for your spending money while you're on your trip, and people use prepaid cards for that purpose."

You'll be protected from fraud. Prepaid debit cards are required to give cardholders the same level of fraud protection as traditional debit cards.

This means that if someone uses your card without your permission, your liability is limited to $50 if you report it within two business days of learning of the theft.

Some prepaid cards may go above and beyond this standard, providing a zero-liability policy that protects you from losing any money, even if you don't report the theft before charges show up on your account.

Prepaid cards offer a buffer for your accounts. If you're wary about using your debit or credit card on your trip, a prepaid card can help. While all three types of cards offer some level of fraud protection, it might take time to recover.

A thief who gets access to your debit card could do serious damage to your bank account right when you need funds the most. For example, you may not be able to get reimbursed right away, or it may take some time to receive a replacement credit card . If any kind of theft happens with your prepaid card, the stakes are much lower.

What Are the Disadvantages of Using a Prepaid Travel Card?

While prepaid travel cards can have their perks, watch out for some potential pitfalls, too.

They can cost more. General prepaid debit cards typically charge foreign transaction fees on purchases made in a foreign currency. And though many travel credit cards waive that fee, prepaid travel cards don't. That means you may be paying 3% on top of every purchase you make on your trip.

Even if you exchange your currency before you go with a multicurrency card, you can expect to pay a premium. For example, you may pay a fee of 5.5% to exchange U.S. dollars to an available currency.

Prepaid travel cards could be a more expensive option than other methods of obtaining foreign currency, such as withdrawing cash from an ATM at your destination. "The exchange rate is not nearly as favorable as you would even have if you prepurchase currency at a bank," says Clark.

And if you don't use all the money on the card, you may be subject to a fee to get a refund of your remaining balance.

Prepaid travel cards can also come with other costs, such as fees to load money onto the account, inactivity fees, ATM fees and even a fee to set up your account.

They don't provide rewards or perks. If you're a disciplined spender and can stick to your budget while traveling, a travel rewards credit card may give you a lot more value than a prepaid travel card. Not only do most travel credit cards charge no foreign transaction fees, but you could get access to rewards and other perks such as statement credits for select travel-related expenses, travel insurance protections , complimentary airport lounge access and more.

Most benefits aren't unique. There are some clear benefits of using a prepaid travel card when you're out of the country, but other products could offer the same benefits.

For example, both traditional debit and credit cards offer fraud protection, and you can also avoid debt by using your regular debit card. And while prepaid travel cards come with a built-in limit as to how much you can spend, it's possible to do the same thing with your checking account – you'll just need to make sure your overdraft protection is disabled to avoid nonsufficient funds charges.

You may run into limitations. If you're hoping to get a multicurrency card, you'll only be able to use it if you're visiting a country that uses an eligible currency.

"It's kind of limited in terms of the geography where it's viable," says Telep, "and it also is really only suitable for frequent international travelers or people who are on very extended international trips."

Should You Consider Using a Prepaid Travel Card?

Prepaid travel cards may sound appealing because they're geared toward travel use. But they don't always provide more than what you get from using your regular debit card and a travel rewards credit card.

And while a multicurrency prepaid travel card sounds like it can make your life easier, you'll pay a premium to preload the currency of your choice. Credit and debit cards may assess fees, but many of them are easier to avoid than on prepaid card fees.

Some prepaid cards charge high monthly fees, for example, which may feel unnecessary if you're only using it when you travel. If you're thinking about using a prepaid debit card when traveling overseas for the forced budgeting feature, avoid limiting your search to cards that brand themselves as prepaid travel cards. Instead, also consider general-purpose prepaid cards that allow for international ATM withdrawals and don't charge a lot of fees.

"Look for a card that has a fee structure that's not going to penalize you if you only use the card two or three times a year when you’re going on various vacation trips," says Telep.

You'll also want to make sure you don't run into limitations on how and when you can use your card while you're traveling.

"If I'm traveling abroad, I have to make sure that my prepaid card is going to work for both cash access and for purchases abroad," says Clark. "And you're always going to want to go with a Visa or Mastercard network because of the acceptance abroad."

Consider Using a Mix of Payment Methods

Instead of focusing your vacation spending on just one form of payment, consider using more than one. For example, a travel rewards credit card may be best for most purchases because you can avoid the foreign transaction fee and earn valuable rewards on each transaction. Then use a traditional or prepaid debit card to withdraw cash from ATMs, since credit card issuers will charge a cash advance fee on these transactions.

By having multiple payment options, you can judge which one is the best every time you need to make a purchase. It can also help if one of them gets stolen. While some credit cards and prepaid debit cards offer emergency cash and card replacement services, having a backup ready to go can be a major stress reliever.

Whatever you do, take some time to compare your options to make sure you're getting the most value out of your trip.

Tags: credit cards

Comparative assessments and other editorial opinions are those of U.S. News and have not been previously reviewed, approved or endorsed by any other entities, such as banks, credit card issuers or travel companies. The content on this page is accurate as of the posting date; however, some of our partner offers may have expired.

A complete guide to prepaid cards

While prepaid cards may look like credit cards and are accepted at the same retailers, they're very different. In its simplest form, prepaid cards are a method of payment preloaded with money that you use to purchase things.

Let's take a look at the different flavors of prepaid cards and everything that you need to know about how they work.

Want more credit card news and travel advice from TPG? Sign up for our daily newsletter and check out our beginner's guide .

Key things to know about prepaid cards

The most important thing to know about prepaid cards is that they must be loaded with funds in advance. You can't spend beyond what you load and there is no credit score or credit history attached. Unlike a regular debit card, they are not tied to a bank account. Essentially, prepaid cards function similarly to gift cards.

According to the FDIC , in 2017 there were over 14 million Americans who didn't have a bank account. If you're one of these individuals or want to avoid traditional financial institutions, prepaid cards are an easy-to-obtain option requiring no credit check. Here are a few things to keep in mind about prepaid cards:

• Prepaid cards are marketed as an alternative to banks
• No credit required -- but no credit is built either
• Load money directly onto a prepaid card and then use that balance for purchases

How do prepaid cards work?

Prepaid cards function a lot like bank debit cards. They come with a PIN and in some cases you can accept direct deposits into your prepaid account. Unlike a conventional debit card , prepaid cards are not tied to a bank account and with some prepaid cards, you have the option to reload them back up.

You can even use some prepaid cards to withdraw cash from an ATM. However, there are fees attached to this functionality.

Types of prepaid cards

Open loop prepaid cards are branded with a network such as Visa, Mastercard, American Express or Discover. You're able to use these open loop cards anywhere the brand is accepted. If a retailer normally accepts a Visa credit card, for instance, you'll be able to use your Visa prepaid card there too.

Closed loop prepaid cards are only allowed to be used at specific merchants, such as at a particular store or group of stores. These are more commonly referred to as store gift cards and are brand specific. You can only use them at specified retailers.

Related reading: What credit cards should you use to purchase gift cards?

What are some advantages to prepaid cards?

There are a variety of reasons why someone might use prepaid cards as a form of payment. As mentioned, you don't need to have a credit history or a bank account to use prepaid cards. Some people may purchase prepaid cards to meet minimum spending requirements and use the balance to pay future expenses. Here are some advantages to using prepaid cards:

No prior credit history needed

Anybody can "qualify" to use a prepaid card, since you're not borrowing any money and there's no credit score that needs to be verified. This is particularly attractive for people with not-so-great credit, including any young people who have not yet built up their credit history .

No bank account needed

A prepaid card can be used in lieu of a checking account at a bank or credit union. If you don't have access to a bank account, a prepaid card still allows you to pay with plastic. For some prepaid cards, you can get some banking-like features like online bill pay , mobile checking, and ATM withdrawal.

Use it (almost) anywhere a credit card is accepted

Prepaid cards can be used anywhere a credit or debit card is accepted. That includes both online purchases and in-store. However, places like rental car agencies and hotels may not accept prepaid cards as a valid hold on the payment .

It could help with budgeting

Since prepaid cards have to be preloaded with funds, it can help you avoid temptations of overspending on money that you don't have. However, be cautious of common fees associated with prepaid cards. Some prepaid cards charge a monthly maintenance fee, for example.

Gift it as an alternative to cash

Prepaid cards can be gifted to a friend or loved one, but can also be used for yourself. While a gift card itself won't earn rewards, paying for it with a credit card that earns you a bonus will.

What are disadvantages to prepaid cards?

There are also disadvantages to prepaid cards that should be taken into consideration.

They usually come with fees attached

If you do decide to use a prepaid card, it's important to find out what fees you will have to pay and which card has the lowest one for your needs. While the Consumer Financial Protection Bureau (CFPB) requires prepaid card issuers to provide disclosures that clearly state fees, there are often many additional expenses (activation fees, usage fees, ATM fees, etc.) that could be avoided with other forms of payment.

If you need help building credit, consider other options

Perhaps the biggest disadvantage to prepaid cards is the inability to build any form of credit. While you won't need a credit check, the downside is that spending on prepaid cards is not tracked by credit bureaus .

There are usually fewer consumer protections

Some prepaid cards will restore the original balance and issue a new card if you report loss or theft of a registered card to the issuer. However, you will not have access to the same suite of protections in the way of fraud, unauthorized charges, warranty coverage, etc.

Related reading: Ways to use a credit card responsibly

Alternatives to prepaid cards

If you are looking to build credit, a prepaid card might not be your best option. Between the fees, lack of purchase protections and inability to build credit, a proper bank-issued debit card is a much better alternative if you qualify.

And if you are able to apply for one, secured credit cards can also help build credit. These particular cards require a security deposit from the cardholder when the account is opened. This security deposit is usually refundable and determines your initial credit limit . For those without credit history or with low credit scores , secured credit cards can be useful for building or repairing credit. You'll initially want to make modest, occasional purchases on secured cards and focus on paying off a balance in full each month.

Bottom line

There are a variety of different types of prepaid cards in the market from issuers. It pays to know the pros and cons of each, as well as your financial goals, before using it. With this guide, you'll know what to look for -- and what to avoid -- when it comes to prepaid cards.

Capital One Main Navigation

• Learn & Grow
• Life Events
• Money Management
• More Than Money
• Privacy & Security
• Business Resources

What is a prepaid card and how does it work?

January 30, 2024 | 5 min read

Similar to a debit or credit card , prepaid cards can be used to make purchases. But unlike those cards, a prepaid card comes with a balance that acts as a spending limit. Once you’ve spent the balance, the card can’t be used until you add more money to it.

Keep reading to better understand prepaid cards.

Key takeaways

Prepaid cards are similar to credit cards and traditional debit cards, but they’re not linked to a line of credit or a bank account.

Like credit and traditional debit cards, prepaid debit cards can be a simple and safe alternative to carrying cash.

Prepaid cards can be used to make purchases as long as you hold a balance.

There are often fees associated with prepaid debit cards.

See if you’re pre-approved

Check for pre-approval offers with no risk to your credit score.

What is a prepaid card?

You can use a prepaid card to make purchases or pay bills—the same way you would a credit card or debit card. But similar to a gift card , a prepaid card is loaded with money in advance. You might hear prepaid cards referred to as prepaid debit cards, prepaid credit cards, pay-as-you-go cards or stored-value cards.

You can generally buy prepaid cards at banks or retail locations like grocery stores and drugstores. The cards come with either a set available balance or an option to load money onto the card. From there, you can use the card until you’ve depleted the balance. Once the money runs out, you won’t be able to make more purchases until you reload the card.

A prepaid card functions in some ways like other cards. This means you can swipe or insert it into point-of-sale systems to make your purchases and, in some cases, use it at ATMs for cash withdrawals.

Prepaid card vs. debit card vs. credit card

A key factor that differentiates prepaid cards is that they aren’t linked to a bank account like a debit card is, and they aren’t linked to a line of credit like a credit card is.

When you use a prepaid card, you’re only using the money that you’ve loaded onto it. You aren’t borrowing any money, and the card doesn’t draw from any other financial accounts you may have.

That’s why you need to reload an empty card with more money if you want to continue using it.

Why use a prepaid card?

There are several situations where a prepaid card could be helpful. Here are some of them:

You don’t want to carry cash: A single card can be easier to carry than a wad of bills, and it may also be a safer alternative to cash.

You want an extra layer of security: While a stolen prepaid card can be easy to use, a thief will only have access to the balance on the card—unlike a debit card, where they may be able to overdraw an account.

You want to limit your spending: A prepaid card can help you avoid spending more than the balance available on your card.

You need a checking account alternative: If you don’t have a checking account but want the convenience of using a card instead of cash, you may opt for a prepaid card.

You don’t want to impact your credit scores: You don’t need a credit check to purchase a prepaid card, so it could be a helpful short-term credit card alternative.

How do you put money on a prepaid card?

Once you’ve used the balance on a prepaid card, you have to add more money to it if you want to keep using it. There are several ways to do this:

Deposit money directly to the card from a checking account or another prepaid card.

Deposit money to the card from paychecks or other sources of regular income.

Reload the card at a retail location or bank using cash.

• Purchase a reload pack to add a predetermined amount of money to your card.

Do prepaid cards build credit?

The Consumer Financial Protection Bureau (CFPB) confirms that prepaid cards generally won’t help build your credit history. When you use a prepaid card, you aren’t borrowing money, and there’s no associated line of credit. That means activity on your prepaid card isn’t reported to any credit bureaus and doesn’t impact your credit scores .

If your goal is to establish credit , you might consider applying for a traditional credit card . If that’s not an option, there are other ways to build credit from scratch , like applying for a secured credit card .

CreditWise from Capital One shows you key factors that may impact your credit scores. Plus, you’ll get email alerts when something meaningful changes on your TransUnion® credit report and more. Using CreditWise to keep an eye on your credit won’t hurt your scores. And it’s free for everyone, not just Capital One cardholders.

Disadvantages of a prepaid card

While there are some situations where prepaid cards might be helpful, they can come with certain disadvantages. 

One important thing to consider before choosing a prepaid card is whether there are fees associated with certain actions. According to the CFPB, you may be charged fees for a number of reasons, like: 

Withdrawing cash 

Making purchases

Reloading your card

Checking the balance on your card

Transferring money between cards 

Not using your card for a certain amount of time

Making foreign transactions

Using your card every month

The CFPB also points out that these fees vary in amount. 

Prepaid cards may also come with fewer protections than your typical credit or debit card. The government has taken steps to provide legal rights for prepaid cardholders , like options for reimbursement if you lose your card or have it stolen. But these protections may not measure up to those of traditional credit or debit cards.

For example, you may need to register your card in order to get assistance from the card provider. Additionally, there’s a time limit for disputing charges. After that, you may be considered responsible for them, even if fraud is involved.

Prepaid card alternatives

For anyone having trouble qualifying for a traditional credit card, a secured credit card might be a good alternative to a prepaid card.

Even if your credit scores are considered bad or poor , a secured card might be an option to help build your credit with responsible use.

Prepaid cards in a nutshell

Prepaid cards generally allow you to make purchases in the same way as credit and debit cards. The key difference is that prepaid cards aren’t linked to a bank account or a line of credit. So to use one, money has to be loaded onto the card. Keep in mind that there may be fees to activate or use prepaid cards.

If you’re looking for a payment option that allows you to earn rewards on every purchase, you may want to consider a Capital One rewards credit card . And with responsible use, like paying your statement on time each month, you could improve your credit scores over time.

Related Content

Credit cards vs. debit cards: key differences.

video | September 21, 2023 | 1 min video

How do credit cards work?

video | June 4, 2024 | 1 min video

How to build credit: 8 tips

article | March 12, 2024 | 9 min read

• Prepaid cards >
• Guides >
• How Do Prepaid Travel Cards Work?

How do prepaid travel cards work?

Prepaid travel cards are a handy and cost-effective way to manage your holiday money. Find out more, including how to choose the right card for your needs.

Prepaid currency cards, also known as multicurrency cards, travel money cards, prepaid travel cards and forex cards, are designed to be a safe and straightforward way to use money abroad.

Providers often have slightly different rules for their prepaid cards, but typically, you load money onto them before your holiday and then use them like regular bank cards while you’re away. That means you can use them for everyday spending and even cash withdrawals.

There are two main types. 

Multi-currency cards allow you to load numerous currencies onto one card. You choose the currency you need and then add cash at an agreed-upon exchange rate. This can be a great way of locking in rates and is handy if you’re travelling to several countries.

Prepaid sterling cards allow you to load money in pounds, which is exchanged when you use it abroad. The downside of this is that you won’t know what rate you’ll get and could be impacted by currency fluctuations. 

Never use a credit card to top up a prepaid card, as this counts as a cash withdrawal and could lead to hefty fees from your credit card company. Instead, use a debit card or bank transfer.

Learn more about withdrawing cash while abroad

What exchange rate will I get on my prepaid card?

The exchange rate you get depends on the provider. Some offer the interbank rate (the rate banks charge each other), some use the rates set by Mastercard or Visa, while others add their own foreign exchange fee. Finding a card that pays the interbank rate will give you the best deal overall.

Find out how to avoid currency conversion while abroad

What fees and charges apply to a prepaid card?

Checking all the fees and charges before choosing a prepaid card is essential. Some will have few or no fees, while others will have a long list.

The key ones to look out for are:

Application fees – a charge for getting your first card, often £5-£10

Replacement fees – a charge if your card is lost or stolen, or, in some cases, to replace the card after a year, meaning you’ll need to pay to keep using it and access your funds

Transaction fees – usually charged as a percentage or a flat fee when you use the card to make purchases

Withdrawal fees – a cost for using the card to withdraw money at a cashpoint

Inactivity charges – some providers will charge a fee if you don’t use the card within a certain period – for instance, a month

Advantages and disadvantages of a prepaid travel card 

Advantages of a prepaid travel card

You can lock in advantageous rates by loading money in advance

It’s easier to set and stick to a budget

Thieves only have access to the funds loaded on the card if it’s stolen

Many prepaid travel cards have helpful security features, such as enabling you to use an app to block a card that’s gone missing

Perks like cashback or travel insurance are available with some cards

Disadvantages of a prepaid card

Some have long lists of fees and charges, including replacement fees you need to pay every year

There are maximum loading or withdrawal limits on some cards

You can’t always use them to hire cars or at petrol stations

Sometimes, you have to pay for a replacement card if yours goes missing

Not all cards are widely accepted everywhere - you should check which cards work in your destination country before applying

What to consider when getting a prepaid travel card

When choosing a card, the first thing to check is that it offers the currency you need. Some cards provide just a few options, while others have more than 50.

Next, you should check the exchange rate you’ll get. Ideally, you want the interbank rate. However, some have quirky rules. For instance, Revolut offers the interbank rate from Monday to Friday but charges up to a 1% fee on weekends. You can beat this by loading the card during the week to spend on Saturday and Sunday.

Unless you’re a frequent traveller, avoid cards that charge a fee if you don’t use them. And make sure that any cash withdrawal limits suit your spending needs.

Alternatives to prepaid travel cards

Prepaid cards aren’t the only way to get a good deal on your travel money. You should also consider the following methods.

Specialist travel debit and credit cards

Most credit and debit cards are expensive to use abroad because they charge foreign transaction fees, sometimes with a chunky flat fee on top. However, specialist cards often provide fee-free spending and interbank exchange rates. Lots also have perks such as cashback or free cash withdrawals. Opting for a credit card will give you Section 75 protection, but you must pay it off in full each month to avoid hefty interest charges.

Foreign currency

If you want to exchange foreign currency for cash, shop around ahead of your trip. Avoid getting holiday money at the airport unless it’s an emergency, as it’s typically very expensive (even pre-booking an exchange and picking up money at the airport can be cheaper than arranging it at the last minute).  Getting money online, at a local exchange or at the post office will almost always result in a better deal than using airport bureaux.

Learn more about travel money

Whether you need a prepaid card for spending overseas, easy budgeting or due to bad credit, we can find the right option for you by comparing some of the best deals around.

You may also like

• What is the difference between Visa and MasterCard?
• How to use a prepaid card
• Should you get a prepaid card?
• What are prepaid cards?
• Chargeback claims: How to get your money back

Prepaid cards

Prepaid travel cards

Business prepaid cards

About Sara Benwell

Travel Technology: Should I Use a Prepaid Travel Credit Card Like Wise?

by Carolyn Ray | Apr 9, 2024

• Toggle High Contrast
• Toggle Font size

Last updated on April 19th, 2024

How to save money and convert multiple currencies while travelling

by Carolyn Ray

Welcome to our Travel Technology column, where I attempt to answer your questions about the mystifying, ever-changing and evolving world of technology. Having spent years working in the technology industry with IBM and other notable firms, I have always been an early adopter and feel qualified to share my personal experiences or find those who know more than me, which often includes our readers. I always encourage you to review other sources and consult with experts.

Topic of the week: Prepaid travel credit cards

One of the most frequent questions on our private Solo Travel Wisdom group is about prepaid travel credit cards.

Question: “Does anyone have experience with a Wise card? How are the exchange rates going from Canadian dollars to other currencies? Thank you for any guidance you can give me.” — Cheryl T.

My take : I much prefer having a digital card like Wise on my phone versus pulling my credit card out of my wallet when I want to pay for public transit or make payments at stores and restaurants. In most European countries, you can tap on and off public transportation, such as the metro, subway, or bus with your phone using your Wallet (on iPhone) which uses facial recognition for additional protection.The other feature I enjoy is currency exchange, which can be done at the touch of a button for a small fee. For example, if I am travelling to Switzerland and don’t have Swiss Francs, I can convert my Euros into this currency at the touch of a button, and then convert unused funds into a currency I need. As a business owner, I use Wise to make payments in different currencies and have found the fees significantly lower than Paypal. Wise also has a plastic credit card as well but I just use the digital one.

Editorial note: JourneyWoman may earn revenue from this article from the company mentioned if you choose to purchase their product, but there is no cost to you for this. Our perspective is informed by our readers and our personal experiences, not influenced by advertisers. We wouldn’t recommend a product we haven’t used ourselves and will state if an article of this type is paid for or sponsored by a company, which it is not in this case. Read our disclaimer here . 

What is a prepaid travel card?

A travel money card, also called a currency card, is a type of card which allows you to keep multiple currencies and use the card while travelling the world with no hidden fees to worry about.

Read More: How to Save Money on Travel: Tips From Experienced Solo Travellers

Benefits of a prepaid travel card.

Prepaid cards like Wise offer several benefits over physical credit cards, including no foreign transaction fees and lower rates than traditional credit cards.

Exchange rates : Both Revolut and Wise use the mid-market exchange rate, which is much better than the rate we might get at a bank, which also charges hidden fees. One difference with Revolut is that there is an extra 1.0% fee if you’d like to move RUB, THB or UAH. Revolut also charges a fee outside exchange hours, which can range between 0.5% – 2.0%.

Sending money : Fees vary slightly when sending money depending on the source of the funding. For example, if you’re funding your Wise account from your bank account, there is an Interac fee. I use Wise for business so the fees may be slightly higher than on personal accounts.

Receiving money : There is no charge to receive non-wire money on Wise . There is a fixed fee depending on the amount for SWIFT or wire transactions, between $4 and $10.

Read More: Travel Technology: What is an eSIM or Electronic Sim Card for Mobile Phones?

What women say about Wise and prepaid travel credit cards

“ Wise is an amazing resource. If you get the debit card, you can transfer money into a local currency account and use the debit card to withdraw it when in the country. You save a LOT on fees and currency conversion charges. — Mariellen W.

“Reminder to check which credit cards don’t have international fees. I forgot all about it this last trip & boy did those fees add up.” — MaKoa N.

“I have (a Wise card). I can’t really speak to your question about exchange rates but I have found it to be a great way to carry money internationally. It’s easy to load money onto it. It’s not connected to my own bank account so the risk of losing it is less damaging. It’s widely accepted so less need to carry anything else. I have nothing but positive experiences with it.” — Nancy T.

“I have Wise and I totally love it. You can go on their website and see that day’s exchange rate I believe. What you are not paying with this card is the 2 to 3% above that rate that bank cards charge to do a foreign transaction!!” — Cathi W.

“I used Wise to transfer money to an overseas vendor to pay for a trip in their currency. The exchange rate and service fees were less than using my credit card. It was easy once I read through the steps and provided confirmation of the transaction and delivery of the funds. I continue to weigh the savings vs credit card use (not accumulating points and insurance).” — Helen C.

“I also use Wise as a way to receive money from retreat participants in the currency of their choice and so that I can easily and seamlessly move through countries and access that same currency, having never paid exchange rates. I will caution anyone who holds large amounts (50K+) in any digital service, however. They are not a bank, and while highly regulated are not under the same protection as an institution.” — Tania C.

Please note: We make every effort to provide accurate and up-to-date information. While we may highlight certain positives of a finanical product, there is no guarantee that readers will benefit from the product. To the extent any recommendations or statements of opinion or fact made in a story may constitute financial advice, they constitute general information and not personal financial advice in any form. Readers of our stories should not act on any recommendation without first taking appropriate steps to verify the information in the stories consulting their independent financial adviser in order to ascertain whether the recommendation (if any) is appropriate, having regard to their investment objectives, financial situation and particular needs. Providing access to our stories should not be construed as investment advice or a solicitation to buy or sell any security or product, or to engage in or refrain from engaging in any transaction by JourneyWoman.  Read more in our Terms of Use of this site. 

Learn More About Travel Technology

Travel Technology: What is a VPN or Virtual Private Network?

by Carolyn Ray | May 18, 2024

Our Travel Technology series answers the question: ‘what is a VPN’, to help you protect your privacy on public networks.

Travel Technology: What is an eSIM or Electronic Sim Card for Mobile Phones?

by Carolyn Ray | Mar 31, 2024

Our Travel Technology series starts with a look at eSIMs, a new, cost-effective way for women to save money and stay connected on mobile phones.

Hold The Phone, Grandma: Safe Etiquette for Grandkid Holiday Snaps and Social Media

by Kathy Buckworth | Dec 22, 2023

Suggestions for grandparents when posting holiday photos on social media, particularly when traveling with grandchildren.

Carolyn Ray

As the CEO and Editor of JourneyWoman, Carolyn is a passionate advocate for women's travel and living the life of your dreams. She leads JourneyWoman's team of writers and chairs the JourneyWoman Women's Advisory Council and Women's Speaker's Bureau. She has been featured in the New York Times, Toronto Star and Zoomer as a solo travel expert, and speaks at women's travel conferences around the world. In March 2023, she was named one of the most influential women in travel by TravelPulse and was the recipient of a SATW travel writing award in September 2023. She is the chair of the Canadian chapter of the Society of American Travel Writers (SATW), a member Women's Travel Leaders and a Herald for the Transformational Travel Council (TTC). Sometimes she sleeps. A bit.

We always strive to use real photos from our own adventures, provided by the guest writer or from our personal travels. However, in some cases, due to photo quality, we must use stock photography. If you have any questions about the photography please let us know. Disclaimer: We are so happy that you are checking out this page right now! We only recommend things that are suggested by our community, or through our own experience, that we believe will be helpful and practical for you. Some of our pages contain links, which means we’re part of an affiliate program for the product being mentioned. Should you decide to purchase a product using a link from on our site, JourneyWoman may earn a small commission from the retailer, which helps us maintain our beautiful website. JourneyWoman is an Amazon Associate and earns from qualifying purchases. Thank you! We want to hear what you think about this article, and we welcome any updates or changes to improve it. You can comment below, or send an email to us at [email protected] .

Submit a Comment Cancel reply

Your email address will not be published. Required fields are marked *

Submit Comment

MASTERCARD BENEFIT INQUIRIES

Within the U.S.: 1-800-Mastercard (1-800-627-8372) | Outside the U.S.: Mastercard Global Service Phone Numbers

Availability of insurance benefits on your card may vary by card issuer. Please refer to your issuing financial institution for complete insurance benefit coverage terms, conditions and exclusions.

*Card registration required. Certain exceptions apply. Click here for terms and conditions .

†Requirements may vary. See card packaging for details or contact card issuer.

What is a prepaid card and how does it work?

Advertiser disclosure.

We are an independent, advertising-supported comparison service. Our goal is to help you make smarter financial decisions by providing you with interactive tools and financial calculators, publishing original and objective content, by enabling you to conduct research and compare information for free - so that you can make financial decisions with confidence.

Bankrate has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover.

• Share this article on Facebook Facebook
• Share this article on Twitter Twitter
• Share this article on LinkedIn Linkedin
• Share this article via email Email

• Connect with Bankrate on Twitter Twitter

• • Travel and rewards points
• Connect with Liliana Hall on LinkedIn Linkedin

The Bankrate promise

At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict editorial integrity , this post may contain references to products from our partners. Here's an explanation for how we make money . The content on this page is accurate as of the posting date; however, some of the offers mentioned may have expired. Terms apply to the offers listed on this page. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any card issuer.

At Bankrate, we have a mission to demystify the credit cards industry — regardless or where you are in your journey — and make it one you can navigate with confidence. Our team is full of a diverse range of experts from credit card pros to data analysts and, most importantly, people who shop for credit cards just like you. With this combination of expertise and perspectives, we keep close tabs on the credit card industry year-round to:

• Meet you wherever you are in your credit card journey to guide your information search and help you understand your options.
• Consistently provide up-to-date, reliable market information so you're well-equipped to make confident decisions.
• Reduce industry jargon so you get the clearest form of information possible, so you can make the right decision for you.

At Bankrate, we focus on the points consumers care about most: rewards, welcome offers and bonuses, APR, and overall customer experience. Any issuers discussed on our site are vetted based on the value they provide to consumers at each of these levels. At each step of the way, we fact-check ourselves to prioritize accuracy so we can continue to be here for your every next.

Editorial integrity

Bankrate follows a strict editorial policy , so you can trust that we’re putting your interests first. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions.

Key Principles

We value your trust. Our mission is to provide readers with accurate and unbiased information, and we have editorial standards in place to ensure that happens. Our editors and reporters thoroughly fact-check editorial content to ensure the information you’re reading is accurate. We maintain a firewall between our advertisers and our editorial team. Our editorial team does not receive direct compensation from our advertisers.

Editorial Independence

Bankrate’s editorial team writes on behalf of YOU – the reader. Our goal is to give you the best advice to help you make smart personal finance decisions. We follow strict guidelines to ensure that our editorial content is not influenced by advertisers. Our editorial team receives no direct compensation from advertisers, and our content is thoroughly fact-checked to ensure accuracy. So, whether you’re reading an article or a review, you can trust that you’re getting credible and dependable information.

How we make money

You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey.

Bankrate follows a strict editorial policy , so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers.

We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money.

Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories, except where prohibited by law for our mortgage, home equity and other home lending products. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range, can also impact how and where products appear on this site. While we strive to provide a wide range of offers, Bankrate does not include information about every financial or credit product or service.

A prepaid card is a great option for people who may not qualify for an unsecured credit card or other types of credit cards. Prepaid cards don’t require a credit check and are typically a popular choice for college students and other young adults who are trying to establish strong financial habits without taking on the financial responsibility that comes with most credit cards.

What is a prepaid card?

Much like a debit card, a prepaid card is a card that can be used to make purchases. It is loaded with a balance ahead of time, and this balance acts as your spending limit. The prepaid card can then be used in place of a credit card for payment, but unlike a credit card, the prepaid card won’t build up any debt or incur interest charges. Instead, the prepaid card can only be used for spending the money you already have.

A prepaid credit card won’t boost your credit score, but it can come in handy for making online purchases or paying bills. Many people also use prepaid cards as a way to teach their children how to manage money.

Prepaid cards vs. debit cards vs. credit cards

Unlike debit cards, prepaid cards aren’t linked to a bank account. And unlike credit cards, prepaid credit cards do not come with a line of credit. Prepaid cards are issued by banks and financial service companies. Instead, you only have access to the money you have loaded onto it. You aren’t borrowing money or paying a deposit that acts as collateral.

The pros and cons of prepaid cards

A prepaid card, for the most part, functions like any other card. You can swipe it or insert it at most point-of-sale systems to make a purchase. So, you may be wondering what is the point of a prepaid card when most people could simply pay with cash. There are pros and cons of prepaid cards that are worth considering. Let’s take a look at a few:

Pros of a prepaid card

A prepaid card is more accessible than a credit card.

If you think you’re not likely to qualify for a credit card, a prepaid card is probably the way to go because you don’t have to worry about qualifying for a specific card. The prepaid card issuer grants you access to the card without checking your credit history .

You won’t have to worry about overspending

Many of us are susceptible to offers and special deals . While that may be a good thing because it means you’re taking advantage of all the opportunities for possible rewards, it can be a challenge to avoid overspending. That’s where a prepaid card, with its set spending limit, comes in handy. You can only spend what you’ve already loaded onto the card, so you won’t wrack up debt on an impromptu shopping trip.

You don’t have to worry about missing a payment

While traditional credit cards can be convenient, they can also be a liability. With a prepaid card, you can take advantage of the convenience of plastic without the risk of taking on more debt than you can pay off. You can shop with a prepaid card virtually anywhere and you don’t have to worry about paying your credit card bill and potentially  making late payments .

A prepaid card is less stressful to carry around

If your prepaid card is stolen, the thief will only have access to the amount loaded onto the card and not an entire checking account, as is the case with a debit card. And while most credit cards have zero fraud liability, fraudulent credit card charges can still wreak havoc on your credit.

Cons of a prepaid credit card

Fewer consumer protections.

Prepaid cards come with fewer protections than your average credit card. In 2019, the Consumer Financial Protection Bureau added comprehensive consumer protections for prepaid accounts, including protections in case of errors, loss or theft, and stricter rules for issuers when it comes to relaying clear information regarding prepaid account fees. While this is a step in the right direction for consumers who already hold prepaid cards, these protections don’t exactly compare with those of traditional credit cards.

It won’t change your credit score

When you use a prepaid card, you aren’t borrowing money, so any activity is not reported to the three credit bureaus. Prepaid cards don’t offer you the same protections as credit cards, but they can still help you with your credit goals by inspiring financial habits such as only spending what you currently have. If your goal is to improve your credit score, you may want to consider becoming an authorized user on someone else’s card or applying for a secured credit card.

Lingering fees can add up

Before committing to a prepaid card, be aware of any fees that come with it. Some prepaid cards may charge cardholders fees for withdrawing cash, reloading a card, checking the balance or even making purchases.

Alternatives to prepaid cards

Not everyone is comfortable with the idea of a prepaid card, especially those who want a card with a credit line or a boost to their credit score. However, there are other options that are specifically designed for people with bad credit or no credit at all.

For starters, a secured credit card is a solid alternative. Secured credit cards are credit cards that require a cash deposit as collateral. Your credit limit is often equal to the amount of the initial deposit. Consumers with poor credit tend to lean toward secured credit cards because they give consumers the opportunity to build credit by practicing good credit habits.

One of the biggest advantages of a secured credit card, especially as a beginner card, is that the card issuer reports your credit information to the three credit bureaus . This allows you to build a positive credit history once you start making regular purchases and paying them off on time. These cards tend to be better for your credit than prepaid cards, but there are some drawbacks to keep in mind. Like most credit cards, be aware of any fees you may face with a secured credit card, such as annual fees or processing fees.

Another option is to apply for an unsecured credit card for consumers with bad credit . Don’t be discouraged if your credit score is bad, as there are plenty of credit cards that you can apply for without paying a deposit upfront.

Keep in mind that a hard inquiry appears on your credit report every time you apply for a new credit card, which results in a temporary ding to your credit score. That’s why it’s important to research credit cards ahead of time and only apply for the card that will best meet your financial needs.

The bottom line

There are many reasons to apply for a prepaid card. For instance, a prepaid card can help you make purchases without overspending. But prepaid cards are not for everyone—they don’t help you improve your credit score, nor do they offer the same consumer protections as credit cards. If you are trying to rebuild your credit, be sure to apply for the card that best fits your needs.

Correction, Feb. 10, 5:40 pm ET: A previous version of this article incorrectly stated that prepaid card activity generally isn’t reported to the three credit bureaus. It’s been updated to reflect that no prepaid cards report to the credit bureaus. A previous version of this article also incorrectly stated that your credit limit on a secured credit card is often equal to 50 percent to 100 percent of the amount of the initial deposit. It’s been updated to reflect that secured card credit limits are typically equal to the amount you put down for the security deposit.

Related Articles

What is a business credit card and how do they work?

Prepaid cards vs. debit cards

What is an ATM card?

How one young millennial is using the Chase Slate Edge to pay off debt

• Kreyòl Ayisyen

How are prepaid cards, debit cards, and credit cards different?

Prepaid cards and debit cards are ways to spend money you already have. Credit cards are ways to borrow money.

How do prepaid cards compare to debit cards?

A prepaid card is not linked to a bank or credit union account. Instead, you put money into the card account, sometimes called loading money onto the card, before you can spend it. With a debit card, you are spending money you have in your bank or credit union account.

Generally, with prepaid cards and debit cards, you can’t spend more than you have loaded on the card or than you have in your account. If you try to spend more, the transaction is denied. However, some bank and credit union accounts allow you to make overdrafts, and so do some prepaid cards. Overdrafts allow you to overspend, and then you must replace the money. Plus, you have to pay an overdraft fee for each transaction that overdraws your account.

How do prepaid cards and debit cards compare to credit cards?

Prepaid cards and debit cards are very different from credit cards. This can be confusing because both types of cards could show a card network logo, such as Visa, MasterCard, American Express, or Discover. When you use a credit card, you’re borrowing money, and you must repay it on the payment due date. Paying late generally means paying a late fee, and paying less than the full amount means paying interest charges. On the other hand, with a debit or prepaid card, you are withdrawing money you already have in your account. Unless you overdraw your account, you do not need to repay money or pay fees.

Still have questions about prepaid cards?

If you’re considering getting a prepaid card or account, we have information that can help you choose the right one for you. We also help you understand your rights.

• Learn more about prepaid cards

Don't see what you're looking for?

Browse related questions.

• What types of fees do prepaid cards typically charge?
• How do I shop for and buy a prepaid card?

Search for your question

Searches are limited to 75 characters.

• Customer Care Number

Internet banking

• NRI Banking
• Money2World
• Money2India

Offers especially for you!

Open an Insta Save Account.

No Paperwork, No Branch Visits, No Hassle!

ICICI Bank Credit Cards

Save more on your everyday expenses.

ICICI Bank Personal Loans

For your safe, comfortable, and convenient travel needs

ICICI Bank Home Loans

The key to your Dream Home, within easy reach

Campus Power - from a dream to a degree, with you at every step.

Solutions for student, parents and institutes.

Just getting returns on your investment?

Save Tax too, while you build your corpus!

Manage all your utility bills, smartly.

Pay bills easily, using Internet Banking.

ICICI Bank Two-Wheeler Loan

Get your dream bike now!

ICICI Bank FD

Choose certainity during uncertain times.

ICICI Bank PPF Account

A blessing for wealth creation is here for you!

Your guide to Personal Finance

A refreshing way to learn all about Personal Finance.

All it takes is 5 minutes!

Instant payout on selling shares, with the ICICIdirect Prime Account.

ICICI Bank Car Loan

Experience a seamless Car Loan process!

What is Forex Card and how it works

Want us to help you with anything? Request a Call back

Thank you for your request..

Your reference number is CRM

Our executive will contact you shortly

THE ORANGE HUB

Planning a foreign trip? Why not use a Prepaid Forex or Travel Card to eliminate all the hassles of currency conversion and the risks of carrying cash in a foreign land? Read this post to know what these cards are and how they work.

One of the most important considerations when planning a trip abroad is 'currency exchange'. While there are several ways in which you can get your INR converted into foreign currency, a large number of travellers now prefer using a Forex or international Travel Card .

The hassles of getting your currency exchanged at the airport, dealing with an untrustworthy exchange service provider, low exchange rates and the risks associated with carrying cash are some of the top reasons why people now prefer such Travel Cards. But what is Forex Card? How does it work? Let us have a look.

What does a Forex or Travel Card mean?

A Travel Card is one of the easiest ways of carrying foreign currency when you are travelling abroad. Think of it as a Prepaid Card which you can load with several popular currencies such as USD, EUR, CAD, GBP, AED, SGD and more. Once loaded, the card can then be used just like a Debit Card to pay for all your travel expenses in the local currency of the place you are visiting.

From hotel bookings to entry tickets, bus or rail passes, shopping, restaurant bills, you can simply swipe your Travel Card anywhere and everywhere card payments are accepted. Moreover, the card can also be used for withdrawing local currency from foreign ATMs.

How does a Forex Card work?

You can load your Travel Card as per the applicable Forex Card rates of the bank when you are still in India. The card can be loaded with most of the popular currencies. Once your card is loaded with foreign currency of your choice, you are no longer required to worry about the fluctuating exchange rates.

Once you reach your destination, you can then use the Travel Card just like you use a Debit Card for making payments. Moreover, you can also use the Internet Banking portal of the bank to reload the Travel Card anytime you wish.

Benefits of using a Forex Card

Some of the top benefits of using a Travel Card are as follows:

• You get a card which is already loaded with foreign currency of your choice even before you start your journey
• A Forex Card supports a number of popular currencies such as USD, GBP, CAD, EUR, AUD, SGD and more
• Eliminates the need to carry a lot of cash when travelling abroad
• Can be used at every location where card payments are accepted
• Can also be used for withdrawing local currency from foreign ATMs
• Easily reload the card online anytime you like.

Applying for a Forex Card

Now that you know how Forex Card works and its benefits, you might now want to know how you can get one. A large number of reputed private banks now offer international Travel Cards. You can get in touch with these banks to buy your Travel Card online.

Click here to buy a Forex Card now!

For disclaimer, Click Here.

Your reference number is CRM 786578956

Sorry! Please check back in a few minutes as an error has occurred.

Share this blog, get social with us..

People who read this also read

Recommended.

Scroll to top

• Credit cards
• View all credit cards
• Banking guide
• Loans guide
• Insurance guide
• Personal finance
• View all personal finance
• Small business
• Small business guide
• View all taxes

You’re our first priority. Every time.

We believe everyone should be able to make financial decisions with confidence. And while our site doesn’t feature every company or financial product available on the market, we’re proud that the guidance we offer, the information we provide and the tools we create are objective, independent, straightforward — and free.

So how do we make money? Our partners compensate us. This may influence which products we review and write about (and where those products appear on the site), but it in no way affects our recommendations or advice, which are grounded in thousands of hours of research. Our partners cannot pay us to guarantee favorable reviews of their products or services. Here is a list of our partners .

Prepaid Debit Cards: What They Are and How They Work

Many or all of the products featured here are from our partners who compensate us. This influences which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money .

Table of Contents

Nerdy takeaways about prepaid debit cards

What is a prepaid debit card, how do prepaid debit cards work, how to get a prepaid debit card, prepaid debit cards: what to consider, downsides of prepaid debit cards, prepaid debit cards vs. debit cards and credit cards, prepaid debit card alternatives.

Prepaid debit cards can be used to make payments and purchases.

Many prepaid debit cards don't require credit checks, so they're easy to get.

You can use prepaid debit cards as an alternative to a bank account and as a budgeting tool.

A prepaid debit card only lets you spend the money you’ve loaded onto the card.

Many prepaid debit cards don't require credit checks, so they're easy to get. If you're in one of the roughly 6 million U.S. households without access to a bank account, prepaid cards can be a solution to safely spending money without having to use a bank.

A prepaid card is a card you can use to make payments and purchases; it can have money loaded onto it. Prepaid debit cards can serve as an alternative to a bank account. They can also be called stored-value cards, pay-as-you-go cards or, more formally, general-purpose reloadable prepaid cards.

Like debit cards, prepaid cards work at any merchant that accepts its payment network, such as Visa or Mastercard. A prepaid debit card only lets you spend the money you’ve loaded onto the card.

A prepaid card offers the convenience of having your money available to spend without the potential issues of using cash — the risk of total loss if it’s stolen or misplaced. Prepaid cards are also federally protected from unauthorized use including withdrawals and purchases made without the owner’s consent; as long as you immediately let the bank that issued the card know about the unauthorized transactions, your responsibility is limited to $50.

Here's more information on how to get a prepaid debit card and how they work.

You can buy a prepaid debit card from a retailer, bank, credit card company or other financial services provider. When you purchase a prepaid debit card and add funds to it, those funds are usually held by a bank or credit union.

» COMPARE: See our list of the best prepaid debit cards

If you need to build credit or have been denied a bank account, a prepaid debit card might not be the best option. Secured credit cards help build credit , and if you can't get a regular checking account, try second chance checking . These accounts provide another shot at mainstream banking and its perks.

Member FDIC

SoFi Checking and Savings

4.60% SoFi members with Direct Deposit or $5,000 or more in Qualifying Deposits during the 30-Day Evaluation Period can earn 4.60% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. Members without either Direct Deposit or Qualifying Deposits, during the 30-Day Evaluation Period will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Interest rates are variable and subject to change at any time. These rates are current as of 10/24/2023. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet.

EverBank Performance℠ Savings

on Wealthfront's website

Wealthfront Cash Account

on Betterment's website

Betterment Cash Reserve – Paid non-client promotion

5.50% *Current promotional rate; annual percentage yield (variable) is 5.50% as of 4/2/24, plus a .50% boost available as a special offer with qualifying deposit. Terms apply; if the base APY increases or decreases, you’ll get the .75% boost on the updated rate. Cash Reserve is only available to clients of Betterment LLC, which is not a bank; cash transfers to program banks conducted through clients’ brokerage accounts at Betterment Securities.

Marcus by Goldman Sachs High-Yield CD

5.10% 5.10% APY (annual percentage yield) as of 04/29/2024

Discover® Cashback Debit

Chase Total Checking®

Deposits are FDIC Insured

Chime Checking Account

Discover® Money Market Account

Prepaid cards vary widely, but they tend to have some features in common. Consider these aspects when deciding on the right one for you:

Fees: You might have to pay for activating or getting a card, making deposits and using out-of-network ATMs. There’s often a monthly fee, which sometimes can be waived — by having direct deposits, for example. Some cards charge a fee for every purchase and ATM transaction.

» COMPARE: See our list of the best banks to avoid ATM fees

Reload options: You can usually add money to a card in multiple ways, such as setting up direct deposits, loading cash at participating retailers and depositing checks at ATMs. Some cards also let you make online transfers or mobile check deposits from a smartphone.

ATM access: Some prepaid cards have access to free nationwide ATM networks, such as MoneyPass and Allpoint, or to branded bank networks for cards issued by banks.

Amount limits: Some cards restrict how much you can withdraw, reload or spend during a certain period, such as a day or month.

Protections: Reloadable prepaid cards have liability and fraud protections by federal law. One safeguard many cards have is federal deposit insurance, meaning your money is covered if an issuer becomes bankrupt. Note that you must register your prepaid card with the card issuer to be eligible for Federal Deposit Insurance Corp. coverage of your funds.

» MORE: Learn about FDIC insurance limits at banks

Expiration dates: Prepaid cards have expiration dates. Funds on the cards shouldn’t expire, but you’ll need to be reissued a card before it expires so you can continue using it. In a 2016 report by the Consumer Financial Protection Bureau (CFPB), some consumers complained that they had money on their cards when they expired, but the issuer didn’t reissue cards that included those balances. If that happens to you, reach out to the prepaid card company to see if it can be resolved. If not, you can submit a complaint on the CFPB website.

Other features: Some prepaid cards offer check writing, online bill pay and subaccounts (funded by the main prepaid card account) which may come with their own cards for family members. A rare few even offer rewards such as cash back on purchases, similar to what rewards credit cards do.

» Need a debit card instead? Read more about the basics of debit cards

Prepaid debit cards have major limitations compared with banking accounts and credit cards. Although they typically have online services, many prepaid cards lack standard banking services, such as a way to withdraw or reload cash for free. The money you load on a card probably won't earn interest, either. Here’s more information on the downsides of using a prepaid debit card:

No effect on credit: Because prepaid debit cards aren’t credit cards, they don’t affect your credit, and you can’t build credit with them, either. For that, you’d want to consider a secured credit card .

Lack of bank services: Prepaid cards also don’t automatically have all the features you’d expect with a checking account, including access to an ATM or branch network, online or mobile banking or bank services such as wire transfers and the ability to stop payments.

Past horror stories: Major problems with prepaid debit cards haven’t made the news in recent years, but some prepaid card users have experienced challenges and inconveniences in the past. Several prepaid cards have been affected by technological outages that lasted days or weeks. The Walmart MoneyCard experienced an outage in 2016. Netspend settled with a federal regulator over claims that customers were blocked from accessing their accounts, providing refunds to those who were eligible.

Whether used as a budgeting tool or as an alternative way to bank, prepaid debit cards can help you store and spend money.

» ALSO: See some alternatives to big banks

Here’s a quick breakdown of the differences among prepaid debit cards, credit cards and debit cards:

Prepaid debi t cards: No bank account is required. You load money onto the card via cash, checks, direct deposit or a transfer from another account before paying for purchases or making other transactions. Generally, you can’t spend more than the amount of money you have loaded onto the card.

Debit cards: A bank account is required. You use money directly from a checking account when paying for purchases or withdrawing money from an ATM. If you’ve opted into overdraft protection, you may be able to spend more with your debit card than what’s in your account, but you might also be charged a fee for the service. (Learn more about overdraft fees .)

Credit cards: No bank account is required. You borrow money from a bank when you use the card and pay the money back later. 

» CONSIDER: NerdWallet's picks for the best prepaid debit cards

If a prepaid debit card isn’t quite right for you, you can find a good alternative with a no-fee checking account. Though some checking accounts come with monthly costs, a growing number of online institutions offer accounts without monthly fees or minimum balance requirements, and there are options if you’ve had problems with bank accounts in the past.

For an account without monthly fees, check out our list of best free checking accounts . 

For an account that doesn’t require good credit history or a review of your ChexSystems record or Early Warning report (ChexSystems and Early Warning Services are reporting agencies that banks use to track customers who have mishandled previous bank accounts), consider a second chance checking account .

For a checking account that earns interest, compare the best rewards checking accounts .

For an institution that doesn’t penalize you for overdrawing your account, see our list for the best banks for overdrafts .

For easy access to free ATM use, consider the best banks to avoid ATM fees .

A prepaid card is a card that you load cash onto (i.e., you add money to the card account) in order to use as a form of payment. Prepaid cards are a safer and more convenient option to using cash, and you don’t need to have a bank account to use them.

The way a prepaid debit card works is that you can only spend the money you have already loaded onto the card. Prepaid cards work at any merchant that accepts its payment network, such as Visa or Mastercard.

You can buy a prepaid debit card from a retailer, bank, credit card company or other financial services provider.

Prepaid debit cards can be a helpful financial tool — they allow you to use a debit card without a bank account. But there are some downsides to consider when using them. You can’t build credit with them and the money you load onto them won’t earn interest. And many prepaid cards lack standard banking services, such as a way to withdraw or reload cash for free.

You can usually add money to a card in a few different ways, such as setting up direct deposits, loading cash at participating retailers and depositing checks at ATMs. Some cards also let you make online transfers or mobile check deposits from a mobile device.

way a prepaid debit card works

is that you can only spend the money you have already loaded onto the card. Prepaid cards work at any merchant that accepts its payment network, such as Visa or Mastercard.

On a similar note...

on NerdWallet

• Date Archives
• Popularity Archives
• Publication Archive
• Headline Archive
• Survey Archive
• Partnerships
• Board of Directors
• Press Releases
• News Headlines
• Media Inquiries
• Join Press List
• Photo Gallery
• Best Practices
• Training Tools
• Our Network
• Publications
• Other Languages
• How to Order
• Newsletters
• Consumer Action News
• Consumer Action Insider
• Submit Complaint

Consumer Resources

• Consumer Service Guide (CSG)
• Consumer Booknotes

Questions and Answers about Choosing and Using Prepaid Cards

The prepaid cards training manual can help answer many questions about reloadable prepaid cards, on everything from loading and using a card to card policies and protections.

Publication Series

• This publication is not currently associated with any training series.

Download File

PDF files may contain outdated links.

Questions and Answers about Choosing and Using Prepaid Cards File Name: Prepaid_Q&A_2012.pdf File Size: 0.89MB

Languages Available

Table of contents, prepaid cards, loading and using a card, prepaid card costs, policies and protections, managing your card, are there different types of prepaid cards.

Yes, prepaid cards include non-reloadable (single-use) and reloadable (reusable) cards.

Gift cards, rebate cards and incentive or promotional cards are examples of non-reloadable prepaid cards. Once you have spent the balance on the card, it becomes useless. In many cases, these cards can only be used at one merchant (a single retail chain, for example) or at locations that accept payments for the network that’s branded on the card, such as American Express, Visa, MasterCard or Discover. These cards are generally not redeemable for cash and cannot be used internationally.

A reloadable prepaid card is one that allows funds to be “loaded” and “reloaded” onto it so that it can be used now as well as over the long term.

Reloadable cards include payroll cards, cards you can use to receive government benefits, single-purpose reloadable cards (to pay for rides on public transit or to make purchases at Starbucks, for example) and cards that consumers can reload as needed and use to make everyday purchases and cash withdrawals at a wide variety of businesses and ATMs (known as general-purpose reloadable prepaid cards).

Reloadable cards are generally considered relationship cards because the purchaser is not anonymous. The customer’s identification must be checked before they can do things like reload funds onto the card or withdraw cash at an ATM, and in many cases the customer will receive a card with his or her name on it. (Note: This publication covers general-purpose reloadable cards only.)

How do reloadable prepaid cards differ from gift cards?

Gift cards typically come with a predetermined amount of money on them (say, $25, $50 or $100) and typically cannot be reloaded once the funds on the card have been depleted. They are generally anonymous and meant to be given as gifts, whereas a prepaid reloadable card is often personalized and comes with other benefits and tools, once the card buyer has been fully identified.

Are prepaid cards the same as debit cards?

No. Although you may hear prepaid cards referred to as “prepaid debit cards,” traditional debit cards are tied to a checking or other demand deposit account; a prepaid card is not. Also, bank debit cards offer different features or protections for users. For instance, purchase and fraud protections and dispute resolution rights are not generally as strong for general-purpose reloadable prepaid cards as those offered on credit and debit cards.

How do prepaid cards differ from the “payroll cards” that some companies use to pay employees?

Like bank-issued debit cards linked to a checking account, payroll cards are subject to certain modified provisions of Regulation E, a federal regulation imposed under the Electronic Fund Transfer Act that provides important consumer protections and requirements. These include limits on losses if the card is used fraudulently, replacement of lost or stolen funds, and information concerning transaction history. These protections do not automatically apply to general-purpose reloadable cards (except that certain provisions of Regulation E do apply to payroll cards). Though some prepaid card issuers have similar voluntary protections, such policies can change at any time.

Payroll cards also are covered by FDIC insurance for up to $250,000 per employee; not all prepaid cards are FDIC-insured.

Most states don’t permit a charge to obtain or activate a payroll card or to reload the card with earnings. And in nearly all states, payroll cardholders must be allowed to obtain their wages without charge at least once per pay period (one free ATM transaction, for example). These rules generally do not apply to general-purpose prepaid cards (though some card issuers exclude or waive certain fees), although there are a number of state laws that address these issues.

How does using a prepaid card compare to having a checking account?

There are many differences between a prepaid card and a checking account. First, a prepaid card doesn’t give you the option of writing checks. And not all prepaid cards offer telephone or online bill-pay. Also, you generally can’t “overdraw” your prepaid card account—spend more than is available. (Checking accounts may give you the option to overdraw your account, for a fee.)

In addition, fees on checking accounts typically are fewer and lower than fees on prepaid cards. Bank fees may even be avoidable by signing up for direct deposit or maintaining a minimum balance. (Some prepaid cards also waive some fees with direct deposit or a minimum balance.)

Who are prepaid cards right for?

Prepaid cards can be used by any consumer for a variety of different reasons. They tend to be more attractive to consumers who can’t get a credit card, either because they have a negative credit history or no credit history at all, or who either can’t or don’t want to get a checking account. The cards can make paying and managing finances easier for the “unbanked” or “underbanked” because they allow ATM withdrawals, direct deposit, in-person and online purchases and, in many cases, online bill-pay and automatic payments.

Prepaid cards provide a tool for people who want to provide a parent, teen or other person, like a nanny or a contractor, with an allowance, a way to pay with “plastic” without the risk of accumulating debt and a way to manage and track their spending. These cards are also attractive to individuals who want to manage/budget their funds and finances.

Can a prepaid card help me build credit?

Generally speaking, no, a prepaid card cannot help you build credit because you are not borrowing and repaying money—you are simply accessing your own money that you loaded onto the prepaid card. To build credit, you must borrow money and then pay it back, and the creditor must report your payment record to at least one of the three major credit reporting agencies (Equifax, Experian and TransUnion). There are a number of companies working on prepaid cards that may in the future allow you to build credit by using them.

A secured card is another option for consumers who can’t qualify for a traditional, unsecured credit card. A secured card is a credit card backed by your deposit, which is used by the card issuer to cover your debt if you default on the account. Most of these cards report to one or more of the three major credit reporting agencies.

How do I get a reloadable prepaid card?

You can get a reloadable prepaid card from many retailers, banks or online. Ideally, you should research your options online before deciding on a card. There are a number of card comparison websites that make the process quicker and easier. Try to learn something about the source or sponsor of the card ratings to be sure you’re not being steered to cards that are not consumer friendly.

You can also shop for cards at the American Express, Discover, MasterCard and Visa websites.

For any card you’re considering, visit the card’s website and read the disclosures carefully.

After identifying which card has the features you want at the lowest cost, submit your application. You can expect to receive your card in about one to two weeks. Follow the activation and registration instructions, and some cards may require you to sign the back of the card.

What information do I have to provide when I request a prepaid card?

Typically, a card issuer will ask for identifying and contact information such as your name, address, birthdate and Social Security number. If you plan to load your new card from a bank account, credit card or other source, you’ll need to provide that information, too.

How can I load money on my prepaid card?

Depending on the card, you may be able to load and reload online, using cash at a participating retail store (such as Target or Walmart), or automatically, using a credit card, a wire transfer or direct deposit. Not all cards allow all these reload methods. For example, a particular card may only allow you to reload through payroll direct deposit or using cash at agent locations. Reload fees vary—in some cases, reloading may be free. (Many cards do not charge a fee for regularly scheduled direct deposits, for example.)

How much money can I load on a prepaid card?

Card issuers have their own minimum and maximum reload limits per day or per month. Make sure that the card you choose doesn’t have a minimum so high it will be difficult for you to achieve, or a maximum too low to meet your needs. In some cases, the minimum and maximum limits don’t apply to direct deposits.

How long does it take for the funds to load to my prepaid card?

This varies among card issuers and will likely depend on the way you reload. For example, a cash reload might be available immediately while a wire transfer might take a few days.

I’m a government benefits recipient—can I get my payments loaded directly onto my prepaid card?

Generally speaking, yes, you can get your benefits payments loaded onto a prepaid card that you select and open yourself, or onto a card that the government agency provides.

If you’re having your benefits payments loaded directly to a card you already own, be prepared to provide the card’s routing number and its account number or deposit ID number. (You can get this information from the card issuer’s website or from a customer service representative.)

Before agreeing to receive your government payments on a government-administered prepaid card, get some information about the fees, features and protections associated with that card. Then compare those with the fees, features and protections on cards you can select yourself. Choose the card that gives you everything you need and want at the lowest cost.

Can I get my tax refund on my prepaid card?

Yes, you can request that the IRS deposit your refund on an existing prepaid card account. You must open and activate the card prior to your filing a tax return. Or, you can request that your refund be applied to a new prepaid “tax refund card” as part of the tax return filing process.

Where can I use my prepaid card?

Network-branded prepaid cards carry a logo from one of the four major electronic payment networks: American Express, Discover, MasterCard or Visa. You can generally use your card anywhere that accepts cards with the same logo that appears on your card, including online merchants. For example, if your card has an American Express logo on it, you can generally use it anyplace that accepts American Express cards. Many businesses belong to more than one payment network, and many businesses accept payments from all four networks.

Where or how can’t I use my prepaid card?

You can’t use your card anywhere that isn’t a member of the same payment network that the logo on your card indicates.

You also may not be able to use your card to make reservations with airlines, hotels and car rental companies, though you should be able to pay the final bill with your card.

If you are allowed to use the card to make the reservation, the merchant may place an authorization hold on the card for the estimated amount of the final bill, which means that that amount of money will not be available for you to use until the final bill is settled and the hold expires. This is sometimes called a “block” on your card. This is similar to how debit and credit cards work, too.

What is an authorization hold?

An authorization hold (or block) is used for certain types of purchases where the amount of the sale is not yet known and will be determined and paid in the future. The anticipated amount of the final bill is held to ensure that sufficient funds will be available to the merchant to complete the transaction. Typically, the hold is removed from the account between one and ten days after the transaction is completed.

Businesses that routinely place authorization holds include gas stations (when you pay at the pump), auto rental companies, airlines and hotels. For example, if you swipe your prepaid card at a gas pump, the station might put a hold on $75 to make sure that there will be at least that amount available to pay for your purchase. If the pump stops at $20, you would eventually get the unspent portion of the held money back ($55), but it would take a few days.

It’s important to plan for holds so that your money isn’t tied up when you need it. To avoid a hold or running out of funds, you could pay cash for certain purchases or try to maintain a higher card balance. For purchases of gas, one way to ensure there is no hold on the funds is to go inside the station and pre-pay for your fill-up. For example, tell the station agent the amount of gas you want to purchase with your card—say, $25. The agent will then set a limit of $25 on the pump. When you are finished putting gas in your car, you will go inside and complete the transaction (using your PIN or signing a receipt). 

Authorization holds are common on credit and debit cards as well.

Can I get cash back when making a purchase?

You may be able to get cash back at places like grocery stores by hitting the debit button after swiping your card and then selecting the amount of cash you want.

Can I withdraw cash from an ATM using my prepaid card?

Yes, you can generally use your prepaid card to get cash from an ATM. Insert your card into the machine and enter your PIN (personal identification number). Select “withdrawal” when asked what type of transaction you want to make, and select “checking” when asked which account you want to withdraw the money from. Enter the amount of cash you want. Take your receipt.

When withdrawing cash, you may be informed that there is a fee for cash withdrawals at that machine. Your prepaid card issuer may give you one or more monthly “free” withdrawals but the owner of the ATM usually charges an additional fee.

There may also be limits on the ATM cash withdrawals you can make per day, week or month, depending on the card issuer’s policies.

What’s the difference between a PIN transaction and a signature transaction?

There are two types of transaction possible with a card: a PIN-based transaction, which requires you to use a keypad to enter your personal identification number, and a signature-based transaction, which requires you to sign a receipt. At the time of purchase, you may be given the choice between “debit” (PIN) and “credit” (signature—but not actually a credit since the amount will still be deducted from your card balance).

Before making the “credit or debit” decision for the first time, check with the card issuer how it treats debit and credit transactions differently. For example, some card issuers charge a fee (or a higher fee) for one type of transaction or the other. Choosing the free or less expensive option when asked “debit or credit” would save you money. For example, if each debit transaction costs 50¢ and you made just one transaction per day, you would pay $15 in fees in one month.

Verify whether any zero liability protection on your card applies to all transactions or if it only covers credit (signature) transactions.

If you’re given the option between debit and credit, choosing credit may be the safer option, but ask about the card issuer’s policies before you use the card.

What can I do if I need to pay for something but there is not enough on my prepaid card to cover the payment?

In most cases, your transaction will be declined if you try to spend more than the balance remaining on the card. However, some merchants will allow you to use the available balance on your prepaid card and then pay the remainder with another form of payment such as cash, a check, or a debit or credit card. For this to work, you must tell the sales clerk how much you want to pay using your prepaid card and how much with another form of payment before the transaction begins. (This is called a “split tender” transaction.)

A few prepaid cards will allow you to spend more than the balance on the card; but note that there is a fee for doing so.

How do I return something to a store if I purchased it using my prepaid card?

The return process is similar to that for credit and debit cards: Present the item you’re returning along with the receipt. If the return is eligible for a refund under the merchant’s return policy, the purchase amount should be credited back to your card, though it could take up to a week for the money to be loaded back onto your card.

The possibility of needing to make a future return is a good reason to keep your receipts and the card even if you don’t plan to reload.

I’m going on an overseas trip—will my prepaid card work outside the U.S.?

Yes, you can use most reloadable prepaid cards in other countries, but it’s always best to check with the card issuer to ensure your card can be used internationally. If you plan to frequently use your card abroad, choose one that has low foreign transaction (or currency conversion) fees.

It’s always wise to notify your card issuer before you leave the U.S. so that your card isn’t frozen. As a fraud protection measure, issuers sometimes freeze the balance on cards when foreign transactions begin to appear.

Can I rent a car or reserve a hotel room using a prepaid card?

Depending on the policy of the rental car company or hotel, you may be able to use your prepaid card to make a reservation. If you are not able to make an advance reservation, the merchant will typically allow you to pay the final bill with your card.

If you are allowed to use the card to make the reservation, the merchant may put a hold on the estimated amount of the final bill, which means that the set-aside amount will not be available for you to use until the final bill is settled.

For example, if on January 1 you reserve one night at a hotel for February 15, the hotel will most likely put a hold in the amount of one night (or even the amount of the estimated final bill) to ensure the money will be available when you check out on February 16. That means you won’t be able to use that money for anything else between January 1 (the date you made the reservation) and around February 20 (a few days after the payment is processed and the hold “falls off”).

Can I use a prepaid card to pay bills online?

Depending on the card you choose and the policies of the card issuer, you may have the ability to pay bills online or by phone.

First contact companies you owe—utilities, wireless service providers, cable companies, insurance providers, etc.—to find out if they will accept prepaid card payments made through your card issuer.

If they do, then follow the instructions provided by the card issuer for setting up online bill-pay. There could be a fee for each bill you pay but it is likely to be less expensive and more convenient than purchasing and mailing money orders.

Since not all prepaid cards can be used to pay bills, you should make a point of shopping for one that does if you know that that is an option you’ll want. Look for a card with free bill pay or a low fee.

I’d like to buy a gift online. Can I pay for it with my prepaid card?

Yes, prepaid cards can be a safe way to make online purchases. There may be some limitations to using a prepaid card online given that there is a fixed amount of funds available on a prepaid card, unlike a debit or credit card.

Can I buy a prepaid card for someone else and then load money on it?

Yes, as long as you are 18 you can purchase and load a prepaid card for someone else, such as an employee, a teen or young adult, or an elderly parent. Individual card issuers may have additional restrictions on who can purchase cards and for what purpose.

Would getting my son a prepaid card help him learn to use payment cards wisely?

It could. Some prepaid cards are designed with this in mind. A parent who buys and loads the card can set up parental controls (including spending limits) and he or she can monitor transactions. The card can be reloaded automatically with the child’s allowance, or as needed.

A prepaid card can provide the opportunity for a young person to learn about budgeting and using “plastic” without the risk of overspending or making a mistake that could damage his or her credit.

Can I transfer money to a family member or friend using a prepaid card?

Yes, you may be able to transfer money to another person using a prepaid card, depending on the card issuer. Fees will vary, as will the options for how the recipient can access their money (for example, on another prepaid card or through their checking account). You can also use your prepaid card to wire money to someone who will pick up the money from a money wiring business near them.

Will my transactions be debited from my card balance immediately?

Typically, yes, your transactions will “post” on the same day. However, some transactions, such as a purchase at the gas pump, can take a day or two to post. In such a case, you would likely see a hold on some of your funds until the purchase is complete and the hold is removed.

Could I ever be charged interest on my prepaid card?

Since you are not borrowing money, you cannot be charged interest. However, if a card allows you to spend more than you have loaded on it, you would likely be charged a fee for exceeding your card balance.

How do companies make money on prepaid cards if they don’t charge interest?

Prepaid card issuers generally make money two ways: on the fees you, as the cardholder, pay and on the transaction fees that businesses pay each time you use your card to make a purchase (sometimes called interchange or merchant fees).

How much will a prepaid card cost me?

How much a prepaid card ultimately costs depends on many factors, including the number and amount of fees charged on your particular card as well as how you use the card.

Look not only at the fees that could be charged but also at any fees that are mandatory and cannot be avoided. For example, a few cards offer fee-free transactions while others waive certain fees when you maintain a minimum balance or use direct deposit.

Fee disclosures may appear on the card packaging, but the card issuer’s website will probably be your best source of complete information. Unfortunately, there’s no law that requires a standard fee chart for prepaid cards but some issuers are more upfront about their fees than others. Before you buy a card, look for a prepaid card where the issuer discloses all the fees clearly.

When you’ve narrowed down your options, calculate your monthly cost for each card based on how you expect to use it.

Do all prepaid cards have the same fees and terms?

No, prepaid card fees and terms vary widely. It’s very important to shop around because the difference between one card and another could be hundreds of dollars each year depending on your usage.

Could a prepaid card save me money?

If you don’t have a checking account, it’s possible that a prepaid card’s fees could be lower than the fees you’d pay to cash your checks and purchase cashier’s checks to pay your bills. In some instances, prepaid cards can be more expensive than checking accounts, so it is important to compare the costs of your payment account options to determine what is the best value for your money.

Is there an upfront cost for a prepaid card?

It’s very likely. Most cards charge a purchase fee or an activation fee and sometimes both. An activation fee is different from a purchase fee. A purchase fee is the upfront price you pay to buy a card. (Some cards cost money to buy in a store, but can be ordered for free online.)

What is an activation fee?

An activation fee is a one-time charge also known as an account opening fee, initial load fee or set-up fee. If there is a fee, it can range up to $30 or more, so it’s very important to compare this cost among cards you’re considering. If a “purchase fee” is also required, the combination of the two fees could be significant.

What is a monthly maintenance fee?

This is a fee charged to your card each month after you activate it. Many prepaid cards charge a monthly maintenance fee—but you can find cards that don’t. On cards that have them, they vary widely, up to $10 per month. With some cards, you may be able to avoid a maintenance fee if you meet a monthly reload minimum, maintain a high enough balance on the card or sign up for direct deposit for your paycheck, benefits or other income.

What is a reload fee?

A reload fee is charged when you add funds to your card. The fee varies among cards and may also vary according to the method used to reload. For example, a cash reload might incur a fee while another type of reload, such as direct deposit, would not. There may also be a third-party fee if you visit an “agent” (such as a participating chain of stores) to load cash onto your card.

What is an inactivity (or dormancy) fee?

Some cards charge an inactivity, or dormancy, fee if you don’t make at least one transaction during a certain period. This timeframe varies by card (and not all cards have the fee) so make sure you learn how long you can go without using your card before you’ll be charged a dormancy fee.

Legally (as of August 2010), inactivity fees can’t be charged on gift cards unless the card has gone unused for at least 12 months. General-purpose reloadable prepaid cards—the subject of this guide—are not covered by this rule. However, several states place limitations on when inactivity fees can be charged by card issuers subject to state law.

Is customer service free?

Not always. Some issuers provide free customer service across the board—by phone (with a live representative), online or via email. Others charge for live customer service but not for automated assistance. And still others charge for virtually every type of assistance. Before choosing a card, find out what types of customer service are offered free and which ones you have to pay for.

What can I do to avoid prepaid card fees?

Check with your card issuer. Not all prepaid cards offer ways to avoid fees. Depending on the issuer, some of the ways you might be able to avoid prepaid card monthly maintenance and transaction fees include:

• setting up direct deposit for your paycheck or other monthly income
• loading a certain amount onto your card each month
• maintaining a minimum balance on the card
• getting cash back when making a purchase at a grocery store or other retailer (instead of paying an ATM fee)
• checking your balance by whichever method is free (It’s very common to encounter a charge to check your balance at an ATM. Avoid card issuers that charge a fee to check your balance online or using an automated phone help line.)
• loading by whichever method is free (if there is one)
• using network ATMs (Even if there is a fee, it will be less expensive than using an out-of-network ATM.)
• making transactions using whichever method is free (if either PIN or signature transactions are free)
• avoiding transactions that go over your balance
• using automated “help” rather than a live customer service representative, if your issuer charges you for this, and viewing your statement online rather than getting a paper copy

Do prepaid cards offer rewards, like credit cards do?

Typically, no. If you do come across a prepaid card that offers rewards, make sure you are aware if there are fees associated with these rewards—such fees are likely to be high in comparison to non-rewards cards to cover the card issuer’s cost of the rewards program. You’re better off finding a low-cost card that meets your needs but offers no rewards. (However, some prepaid cards, especially those designed for travelers, may offer legitimate perks like purchase protection. See the next section.)

How safe are prepaid cards?

Since you need to use a PIN or provide your signature to use it, a prepaid card is safer than carrying around cash. If you report your card lost or stolen as soon as you notice it missing, you may be able to avoid any financial loss, unlike lost or stolen cash. (Some card companies will voluntarily replace money stolen from your card, but such policies are subject to change at any time.)

Do prepaid cards offer the same consumer protections that debit and credit cards do?

No, prepaid cards are not subject to the same laws that govern credit and debit cards. (Prepaid payroll cards, issued by employers for the express purpose of distributing salaries, are subject to certain provisions of Regulation E just like debit cards). However, some card issuers voluntarily provide similar protections, such as zero liability for unauthorized transactions and replacement of lost funds.

To understand exactly what your card’s policies are, review the information that came with the card or that appears on the issuer’s website. Be aware that to benefit from protections offered by your card issuer you might have to follow certain procedures (such as notifying the issuer of unauthorized activity within a specified number of days) or meet certain criteria (such as having the loss occur as the result of a signature transaction rather than a PIN transaction). Voluntary policies are subject to change at any time.

What is “zero liability” protection?

Zero liability protection is a voluntary policy of certain issuers that guarantees that you will not be held responsible for any unauthorized transactions should your card be lost or stolen. Typically, this policy requires that the card be registered and that the cardholder promptly notify the issuer of the missing card and/or unauthorized transactions.

Be aware that there are exclusions and limitations on zero liability protection for prepaid cards. For example, the policy may not cover ATM transactions or certain other types of transactions. And such voluntary policies are subject to change at any time.

What does it mean to “register” my card?

Registering your card means providing your personal information, including, in some cases, government-issued identification and Social Security number. Generally speaking, you must be registered to qualify for certain cardholder protections and to make purchases online (some merchants require a valid “billing” address). Also, general-purpose reloadable cards are generally not anonymous cards like single-load gift cards, so some information about the cardholder is required before the card can be issued and reloaded.

Are all prepaid card balances insured by the FDIC?

Many, but not all, prepaid card accounts are insured for up to $250,000 per account by the Federal Deposit Insurance Corporation (FDIC) if the bank fails.

If the issuing bank’s account records name the cardholder, then the balance on the card will be insured for the cardholder. However, if the funds are pooled and records do not identify cardholders individually, the insured could be the card distributor or another third party rather than the cardholder.

In 2008, the FDIC clarified that even when money is pooled, account owners are protected by FDIC insurance as long the custodial arrangement is disclosed and there are sufficient records to identify individual cardholders. Still, there are some card issuers that do not deposit money in FDIC-protected accounts, so cardholders have to ask specifically if they and their individual accounts are insured.

My prepaid card balance is protected by state money transmitter laws. What does this mean?

Many states regulate prepaid card issuers (and other financial service providers) through “money transmitter” laws, which apply to non-bank businesses that facilitate consumer payments. Generally speaking, money transmitter laws ensure the safety and soundness of non-bank money transmitter businesses and their customers’ money.

State money transmitter laws require that issuers must at all times hold assets that have a market value equal to or greater than the aggregate amount of outstanding prepaid balances in order to protect consumer funds. Many states also have requirements that treat consumer monies (such as prepaid card balances) as being held in trust for the benefit of consumers in the case that issuers fail.

My prepaid card offers “purchase protection”—when does it apply?

Purchase protection is a benefit that some card issuers provide voluntarily. Typically, it does things like extend the standard manufacturer’s warranty, lengthen the period during which an item can be returned, and reimburse cardholders for accidental damage, loss or theft that occurs soon after purchase (usually within 90 days). Coverage terms and exclusions vary, so check your card agreement. Not all prepaid cards offer purchase protection.

Can I dispute a transaction, the way I can with a credit card?

You can dispute a charge that you believe is in error or fraudulent. Contact your card issuer’s customer service department as soon as you notice an error on your statement. In most cases, you must report an error within a limited period (60 days from the date of the statement on which the unauthorized transaction first appears is common).

Most prepaid card issuers do not send a transaction statement by mail or email—however most allow you to check transactions online. If the card you choose does not issue statements, it’s important that you frequently check your transactions online so that you can catch any unauthorized activity as quickly as possible. (To avoid racking up fees, choose a card that offers free unlimited online account access.)

Can prepaid cards help me avoid fraud?

Some cards (credit and prepaid) allow you to create a “virtual” card with its own card number, security code (the “secret code” (CVC number) that appears on the back of a “real” card) and expiration date. Transactions are posted to the real account, but you are able to keep that information private during the transaction.

A virtual card can be useful when shopping online. The virtual card number might expire automatically after you complete your purchase, or you can set your own expiration. You can also cancel it manually, with the click of a button, without canceling your prepaid card account. This means that even if thieves got your virtual card number, they couldn’t use it to access the money remaining on your prepaid card account. 

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

Your liability will depend on your card issuer’s policies and how quickly you report the missing card. The best bet is to contact customer service as soon as you know (or notice) that your card is missing.

What if my card is lost or stolen—what happens to the money on the card?

Contact the card issuer immediately if you notice your card missing. (Copy down and keep the account number and the toll-free number from the back of the card in a safe place.) The number of the old card will be invalidated to protect the remaining funds. Check your online statement for any transactions that you did not authorize. If you find any, report them immediately.

Some prepaid card companies will voluntarily replace money stolen from your card, but not all of them do. And such policies are subject to change at any time.

You can get a replacement card, but if you want it immediately be aware that the card issuer might charge you an expedited delivery fee to ship the card. If you don’t need rush delivery, let the issuer know.

How long will it take for me to get a credit for missing money from a transaction error or unauthorized use of my card?

That depends on the card issuer and its policies, but in some cases it could happen very quickly—say, within 24 to 48 hours of your report. Or, it could take longer, pending the card issuer’s investigation of your claim.

Will I be able to seek reimbursement if someone who has my PIN steals money from my card?

No. It is very important to keep your personal identification number private. If you reveal your PIN to someone and that person uses your debit card, the card issuer will see it as a case of you giving permission to use your card and it will not view the transactions as fraudulent.

What is the “valid date” or “good through” date on my card for?

Like a credit card, your prepaid card displays an expiration date. This enables you to use the card online at sites that require the information to complete the transaction.

The card issuer should automatically send you a new card before the expiration date. Automatic renewal may not happen, however, if you don’t meet certain criteria—for example, if you have a zero balance on the card or haven’t reloaded or used the card in the previous six months.

If the card is not renewed automatically, you may or may not receive a check for the remaining balance—find out what the card issuer’s policy is before you choose your card or lose funds.

When I get a prepaid card, must I give up my rights to go to court or join a class action lawsuit if I sign an arbitration agreement?

If you sign the agreement, then you agree to forfeit your rights to go to court or join a class action lawsuit. If you don’t want to sign an arbitration agreement, you have a couple of options:

• Look for a card that doesn’t include an arbitration clause in its contract. (You may have better luck with cards issued by smaller banks.)
• Sign an arbitration opt-out if one is available or cross out the clause in the card agreement and initial the change.

Can a prepaid card help me stick to a budget?

It might. Since in most cases you can’t spend more than you have on the card, a prepaid card can keep you from overspending and can help you track your purchases. Some cards even have tools to help you monitor your spending, like text or email alerts.

Will I receive a monthly transaction statement?

That depends on your card issuer’s policies. You probably will not receive a printed transaction statement in the mail, and you might not receive one by email either. However, most prepaid card issuers make your transaction history available on demand at the cardholder website. Some cards provide statements via mail, email or text but only for a fee.

How do I keep track of transactions and my card balance?

First, keep all your transaction receipts. Second, log in to your account regularly at the cardholder website to view transactions and the card balance. (You can also check your card balance at an ATM or by calling customer service but there may be a fee for doing so. Certain merchants will have the ability to read your card’s balance for you at no charge.) Third, look for free card issuer services that can help you keep track of your money, such as text alerts and account management apps. (Some card issuers charge a fee for these services.)

Can I get extra cards for my family?

Many card issuers will provide one or more additional cards upon your request. There may be minimum age or other requirements for additional cardholders. There also may be activation or other fees for each extra card; be sure to check this before ordering an additional card.

Could the funds on my prepaid card expire?

Depending on the issuer’s policies, the funds you have on your card could expire and you could lose your money. (Don’t confuse this with the expiration or “valid thru” date on your card. See the next question for more on that.) However, many issuers have policies to ensure that the funds on the card do not expire. Make sure you check with your card issuer to determine whether the funds on your prepaid account can expire—and when (if ever) this might occur.

What happens to my card when it reaches the date on the front of the card?

Your card will become invalid on the date shown on the card. Virtually all issuers print a “valid thru” date on the card so that customers can use them for online and phone “credit card” purchases, which require that information. However, the card issuer should automatically send you a new card before the expiration date. Automatic renewal may not happen, however, if you have a zero balance on the card or haven’t reloaded or used the card in a long while.

Under what circumstances would an issuer cancel my prepaid card?

The cardholder agreement will explain under what circumstances your card could be cancelled. Possible reasons might include consistently breaking an important part of the agreement, failing to pay fees or charges you owe, or deliberately using the card for fraudulent or illegal purposes.

If you cancel the card, you may incur a cancellation fee. If it is your card issuer’s policy to not refund money remaining on the card at the time of cancellation, make sure you spend it before you cancel.

Can I use a prepaid card as a savings account?

The typical prepaid card is not a great place to put your savings. First, you won’t earn interest on your balance. And second, you could lose all your savings if your card were lost or stolen. Even if your prepaid card has a policy of reimbursing lost funds, it is voluntary and could change at any time.

There are some prepaid cards that offer a linked, interest-bearing savings account. However, there is usually a cap on the balance you can keep (which defeats the purpose of a savings account). And you can only make deposits and withdrawals via your prepaid card, which means you will incur fees for every transaction.

How can I avoid a paper statement fee?

You can avoid a paper statement fee either by opting out of receiving paper statements (if they are sent automatically) or by not requesting one (if they are optional). Many, if not most, prepaid cards allow you to check your account information online at any time at no charge.

How can I protect my personal data and card information when using a shared or public computer?

To avoid revealing your personal information to the next user, answer “No” when the web browser asks if it should save your username, password or account information. This is especially important when using a public or shared computer (at the library, for example). Before leaving the computer, log out of your account and clear information you’ve entered by selecting “Clear Recent History” (or a similar phrase) from the browser’s Tools menu.

Can I be charged if I don’t have enough money on the card and attempt to make a purchase?

This could happen, depending on your issuer’s policies. In addition to the transaction being declined, you might be charged a “denied transaction fee” if you try to make a purchase or an ATM withdrawal that exceeds your card balance. If you have one of the relatively few cards that will allow you to spend more than you have loaded on the card, you’ll be charged an overdraft or shortage fee, which ranges from $10 to $25 or more. Use a check register or similar tool to keep track of your card balance, or frequently check it online if there’s no charge to do so.

Will my prepaid card charge me for speaking with a live customer service agent?

It may. Some cards charge a fee for live customer service but allow cardholders to get free help by using the automated phone system or online help tools. When selecting a card, look for one that makes getting assistance easy and free.

Will I be notified when the terms of my prepaid card agreement change?

Maybe not. To be safe, check the website regularly for change notices. There’s no requirement for prepaid issuers to notify you when prepaid card terms change. In general, prepaid card issuers can change terms and conditions at any time with or without notice. Review all materials (print, email, text, etc.) you receive about your card.

Consumer Financial Protection Bureau The CFPB takes complaints about consumer financial services, guides consumers to the appropriate regulatory agencies and offers money management tools and information. You can call the CFPB at 855-411-CFPB (2372).

Federal Trade Commission (FTC) Works for consumers to prevent fraudulent, deceptive and unfair business practices and to provide information to help spot, stop and avoid them. You can call the FTC at 877-382-4357.

Consumer Action Consumer Action offers free information and advice on choosing and using prepaid cards. Counselors speak English, Spanish and Chinese. 415-777-9635 and 213-624-8327, TTY: 415-777-9456; e-mail: [email protected] . Connect with us on Facebook and Twitter .

American Express American Express is a global services company, providing customers with access to products, insights and experiences that enrich lives and build business success. Learn more at American Express website and connect with us on American Express on Facebook website , American Express on Foursquare website , American Express on Linkedin website , American Express Twitter website , and American Express on Youtube website .

Published / Reviewed Date

Published: May 08, 2012

American Express

Consumer Action created this publication in partnership with American Express.

Filed Under

Banking   ♦   Money Management   ♦   Prepaid Cards   ♦  

© 2012 –2024 Consumer Action. Rights Reserved.

Tags/Keywords

Advanced Search

Join Our Email List

Consumer Help Desk

• Submit Your Complaints
• Presente su queja
• Frequently Asked Questions
• Links to Consumer Resources
• Consumer Services Guide (CSG)
• Class Action Database
• California Action Center
• Position & Issues
• Legislative Positions
• Coalition Efforts
• On Our Radar

Consumer Action

57 Post Street, Suite 708 San Francisco, CA 94104 tel. (415) 777-9648

Consumer education and advocacy since 1971

• Headline News

Archives (cont'd)

• Events Archive
• Site Archive

Policies & Partners

• Copyright Policy
• Privacy Policy

Page rendered in 0.9105 seconds | 94 querie(s) executed |  

• Shop all deals
• Free phones
• Smartphones
• Fios Home Internet
• Bring your own device
• Accessories
• Refer a Friend
• Verizon Visa® Card
• Certified pre-owned phones
• Apple iPhone 15 Pro
• Apple iPhone 15
• Samsung Galaxy S24 Ultra
• Google Pixel 8 Pro
• Other phones
• Trade in your device
• Tablets & laptops
• Certified pre-owned watches
• Jetpacks & hotspots
• Shop all accessories
• Phone cases
• Screen protectors
• Tablet accessories
• Chargers & cables
• Phone attachments
• MagSafe compatible
• Verizon accessories
• Shop all watch accessories
• Smart watches
• Shop all plans
• International services
• Connected devices
• Discounts overview
• Mobile + Home
• First responders
• Verizon Forward
• Connected car plans
• Shop all home solutions
• 5G Home Internet
• LTE Home Internet
• Accessories overview
• Cables & connectors
• Networking & Wi-Fi
• TV accessories
• Phone equipment
• 5G Home accessories
• Prepaid overview
• Phone plans
• Smartwatch plans
• Tablet & hotspot plans
• International plans
• Smartwatches
• Hotspots & routers
• Basic phones
• Why Verizon Prepaid
• Disney+, Hulu, ESPN+
• Apple Arcade
• Google Play Pass
• Apple Music
• Xbox All Access
• Services & perks overview
• Entertainment
• Protection & security
• Digital family
• Financial services
• Back to Menu
• Sign in to My Account
• Prepaid instant pay
• Business Log in

Choose your cart:

• Mobile solutions
• Home solutions

Layer_4 Created with Sketch.

Prepaid TravelPass® FAQs

This page explains how you can use your prepaid plan while traveling internationally. If you're not on a prepaid plan, see the TravelPass FAQs or the International Travel page. For more information about using your prepaid device internationally, go to our Prepaid International Travel FAQs .

International high-speed-data

What is prepaid travelpass, and how much does it cost.

For a flat daily fee, Prepaid TravelPass lets you use your prepaid phone's talk, text and data* allowances while traveling outside the US. See available destinations and international coverage . You'll be charged $5 or $10 for a 24-hour TravelPass session, based on which country you're in at the time of purchase. The daily charge only applies on days you use your service outside of the US. You'll receive text messages to your prepaid phone stating when your 24-hour TravelPass session will expire. You'll also use your prepaid minutes, messages and data* allowances from your plan, just like when you're in the US. Note: If you travel to a new destination with a different fee during a 24-hour TravelPass session (e.g., from a $5 country to a $10 country), you'll be charged a new daily fee. You'll start a new 24-hour TravelPass session with 2 GB of high-speed data to use. If you travel to a new destination with the same fee (e.g., a $5 country to a $5 country), you'll continue using your same TravelPass session until it expires. TravelPass isn't available for prepaid data-only devices. *High-speed data applies for the first 2 GB/day with reduced 3G speeds thereafter. You may receive a text offering the option to buy additional International high-speed data when you reach your limit.

What devices and plans are compatible with Prepaid TravelPass?

Most World Devices with HD Voice are compatible with TravelPass. But prepaid data-only devices aren't compatible with TravelPass at this time. You can see if your plan and device are compatible on the Features page in My Verizon. Tap or click Start now in the TravelPass section to check your compatibility. Note: If you don't see TravelPass listed in your available features, you may not be eligible for it. You may need to upgrade to a Prepaid World Device and/or switch to an eligible monthly plan .

How do I get Prepaid TravelPass?

If you're on a compatible device and prepaid plan , TravelPass is already on your line of service but is set to disabled. You can enable Prepaid TravelPass using:

• My Verizon app
• My Verizon website

I'm traveling outside the US. What countries can I call with Prepaid TravelPass?

If you're in an eligible Prepaid TravelPass country, you can use TravelPass to call phone numbers within the country you're in or call back to the US (including Puerto Rico, US Virgin Islands, Guam and Northern Mariana Islands). Note: If you need to call a different country while abroad, you can use Wi-Fi Calling . This call will be billed as an international call from the US. For rates and dialing instructions, go to the Prepaid International Calling page. Note: If you’re traveling to Mexico or Canada, consider getting one of our current prepaid unlimited plans that include talk, text and data in Mexico and Canada.

When will I be charged for Prepaid TravelPass?

When you arrive in a country covered by TravelPass, you'll receive a free international welcome message text. But your 24-hour TravelPass session won't begin until you make or receive a phone call, send a text or use data. Your account will be debited the daily fee at that time, or you’ll be asked to add funds to your account to cover the daily fee. You must have enough funds in your prepaid account to cover the Prepaid TravelPass daily fee if you want to use TravelPass services. Note: You may need to enable Prepaid TravelPass through My Verizon. You'll receive a message when you start your Prepaid TravelPass session, informing you when it will end. If you don't want to incur any additional charges the next day while you're traveling, you can disable Prepaid TravelPass before the end of your session or through the My Verizon app on your phone if you turn on Wi-Fi.

How will I be charged if I travel to multiple countries covered by Prepaid TravelPass?

If you travel from one TravelPass country to another during a 24-hour TravelPass session, how you're charged depends on if the 2 countries have the same TravelPass daily fee or different fees:

• Both countries have the same daily fee - You're only charged 1 daily fee per 24 hours for TravelPass.
• The countries have different fees - In addition to the fee for the first country, you'll also be charged the new fee when you use your device in the second country. This will start another 24-hour TravelPass session with a new allowance of 2 GB of high-speed data. For example, if your TravelPass session begins while you're in Mexico, it will cost $5. If you travel to Aruba during that 24-hour session, you'll also be charged $10 when you first use your device in Aruba and start a new 24-hour TravelPass session.

Where can I find the Prepaid TravelPass Terms and Conditions?

You can view the Prepaid TravelPass Terms and Conditions online.

I live in a town bordering Canada or Mexico. How does Prepaid TravelPass affect me?

If you live in a neighboring town and aren't intentionally traveling to Canada or Mexico, be sure to disable TravelPass. You may inadvertently connect to a Canadian or Mexican network near the US border. If this happens, you may receive a free Verizon message welcoming you to Canada or Mexico. As long as TravelPass is disabled (the default state), you won't incur any TravelPass fees.* But if TravelPass is enabled, you may accidentally incur TravelPass fees. You can also consider getting one of our current prepaid unlimited plans that include talk, text and data in Mexico and Canada.

• Manage Prepaid TravelPass in My Verizon website
• Manage Prepaid TravelPass in the My Verizon app

*Roaming fees may still apply while on a roaming partner's network.

What is International high-speed data, and how much does it cost?

Each 24-hour TravelPass session you purchase lets you use 2 GB of high-speed data from your prepaid data allowance. If you reach that high-speed data limit, you'll receive a text message asking if you want to purchase more International high-speed data. You can reply "YES" to be able to use another 2 GB of your high-speed data allowance until your 24-hour TravelPass session expires. International high-speed data costs the same amount as a TravelPass session in the country you're in (e.g., $5 in Mexico, $10 in Aruba, etc.). You can purchase International high-speed data as many times in your 24-hour TravelPass session as you need, until your prepaid data allowance runs out. For example, if you have a 3 GB data allowance on your prepaid plan, you can purchase additional International high-speed data up to 5 times during a 24-hour TravelPass session.

How do I buy International high-speed data?

Once you use 2 GB of data during a 24-hour TravelPass session, you'll receive a text message asking if you'd like to purchase International high-speed data. Reply "YES" to that text, and the funds will be deducted from your account. This will let you use another 2 GB of your prepaid high-speed data allowance, until the end of your 24-hour TravelPass session. Notes:

• If you don't have enough funds in your account to cover the cost of the International high-speed data, your text message will tell you to add funds. Once you add the necessary funds to your account, reply "YES" to the text message to purchase International high-speed data.
• If you don't reply to the text message, you'll be able to continue using data at reduced speeds until your next 24-hour TravelPass session begins.
• International high-speed data isn't available through My Verizon or by phone. You can only purchase it by replying to the text message you receive.

Does International high-speed data expire?

International high-speed data will expire at the end of your current 24-hour TravelPass session. It won't carry over to your next TravelPass session.

Do I need to cancel Prepaid TravelPass from my account when I return to the US?

No, you don't need to cancel TravelPass when you return to the US. TravelPass only triggers a daily charge when you use your device while traveling outside the US in a qualifying TravelPass country.

Do I have to opt-in daily to use Prepaid TravelPass?

No, you don't need to do anything. Once your 24-hour session ends, you'll automatically start another 24-hour session if you make or receive a phone call, send a text or use data. Every time your account is charged for a new TravelPass session, you'll receive a message that includes the time that it will expire. If you turn off your device before your 24-hour session ends, you won't be charged again. If you continue to use your device, you'll be charged another daily fee and get another 24-hour session.

How do I disable Prepaid TravelPass, so I don't get charged another daily fee?

If you don't want to be charged another daily fee for TravelPass, you can disable TravelPass in My Verizon. If your previous 24-hour TravelPass session has already expired, use a Wi-Fi connection to disable it to avoid activating another 24-hour session. Note: If you disable TravelPass, you can still use TravelPass until the end of your 24-hour session. It won't automatically renew if you attempt to use voice, text or data after that. You'll have to re-enable TravelPass if you want to use it again. You can disable Prepaid TravelPass using:

Note: Some apps may continue to use data while they're running in the background. So if your phone is powered on, it may use data even if you aren't actively using your phone. Alternatively, you can turn off your device before your 24-hour TravelPass expires to avoid additional charges.

Additional support

Prepaid international travel faqs, select and set up your prepaid plan faqs, prepaid family account faqs.

• Home Internet & TV
• Mobile + Home discount
• Support overview
• Return policy
• Community Forums
• Business support
• Download My Verizon App
• Accessibility
• Check network status
• Responsibility
• Verizon Innovative Learning
• Consumer info
• 5G overview
• Innovation Labs
• Apple iPhone 15 Pro Max
• Apple iPhone 15 Plus
• Apple AirPods Max
• Apple Watch Series 9
• Elizabeth James
• Terms & Conditions
• Device Payment Terms & Conditions
• Report a security vulnerability
• Mobile customer agreement
• Announcements
• Radio frequency emissions
• Taxes & surcharges
• Legal notices
• facebook-official
• Privacy Policy
• California Privacy Notice
• Health Privacy Notice
• Open Internet
• Terms & Conditions
• About Our Ads

Understanding How Prepaid SIM Cards Work: An Overview

• Computing & Gadgets
• Mobile Devices

Introduction

In today's fast-paced world, staying connected is more important than ever. Whether it's for business, travel, or personal use, having a reliable mobile communication system is essential. One of the most popular and versatile options for mobile connectivity is the prepaid SIM card. Understanding how prepaid SIM cards work and their benefits can help individuals make informed decisions when it comes to staying connected on the go.

Prepaid SIM cards have revolutionized the way people use mobile devices, offering flexibility, affordability, and convenience. As technology continues to evolve, the demand for seamless and cost-effective mobile communication solutions has grown exponentially. In this article, we will delve into the inner workings of prepaid SIM cards, exploring their functionality, advantages, and potential drawbacks. By gaining a comprehensive understanding of prepaid SIM cards, readers can make informed choices about their mobile connectivity needs and optimize their communication experience.

Whether you're a frequent traveler, a budget-conscious consumer, or someone seeking flexibility in mobile plans, prepaid SIM cards offer a myriad of benefits. From cost-effective data and call options to the freedom of choosing your preferred network provider, prepaid SIM cards have become a popular choice for individuals seeking control and versatility in their mobile communication. As we delve into the mechanics of prepaid SIM cards and the ways in which they can enhance mobile connectivity, readers will gain valuable insights into leveraging this technology to meet their specific needs.

In the following sections, we will explore the fundamental principles behind prepaid SIM cards, uncovering the mechanics that enable users to stay connected on their terms. Additionally, we will examine the advantages and potential limitations of using prepaid SIM cards, providing a comprehensive overview of this mobile communication solution. By the end of this article, readers will have a deeper understanding of how prepaid SIM cards work and how they can be utilized to optimize mobile connectivity.

What is a Prepaid SIM Card?

A prepaid SIM card, also known as a pay-as-you-go SIM card, is a small, portable chip that is inserted into a mobile device to enable communication services. Unlike traditional postpaid plans, where users are billed at the end of a billing cycle for the services they have used, a prepaid SIM card requires users to pay for services upfront. This payment is typically in the form of purchasing credit or a recharge voucher, which is then loaded onto the SIM card to enable usage.

Prepaid SIM cards are widely used by individuals who seek flexibility and control over their mobile communication expenses. These cards are available from various mobile network providers and can be easily obtained at retail outlets, convenience stores, and online platforms. Upon acquiring a prepaid SIM card, users are required to activate it by providing basic personal information and selecting a preferred mobile number.

One of the key features of a prepaid SIM card is its flexibility. Users have the freedom to choose from a variety of prepaid plans that best suit their communication needs, including options for voice calls, text messaging, and data usage. Additionally, prepaid SIM cards do not require a long-term commitment or credit checks, making them an attractive option for individuals who prefer a pay-as-you-go approach to mobile communication.

Prepaid SIM cards are also popular among travelers, as they offer the convenience of using local mobile services without the need for a long-term contract or roaming charges. This flexibility allows users to stay connected while abroad without incurring exorbitant fees typically associated with international roaming.

In summary, a prepaid SIM card is a versatile and cost-effective mobile communication solution that offers users the freedom to manage their expenses and usage on their own terms. With its ease of accessibility, flexibility, and absence of long-term commitments, prepaid SIM cards have become a popular choice for individuals seeking control and convenience in their mobile communication experience.

How does a Prepaid SIM Card Work?

A prepaid SIM card operates on a straightforward principle, enabling users to access mobile communication services by preloading credit onto the card. The functionality of a prepaid SIM card is rooted in its ability to store user data, including the mobile number, account balance, and network-specific information. When a user inserts a prepaid SIM card into a compatible mobile device and activates it, the SIM card establishes a connection with the network provider, allowing the user to access voice, text, and data services.

Upon purchasing a prepaid SIM card, users are required to load credit onto the card by purchasing a recharge voucher or electronically topping up their account. This credit serves as a form of payment for the mobile services used, including outgoing calls, text messages, and data usage. As the user consumes these services, the corresponding amount is deducted from the available credit on the prepaid SIM card.

The SIM card also stores information related to the user's account, such as the available credit balance and the validity period of the services. Additionally, the card contains security features that authenticate the user's identity and enable secure communication with the network provider. This ensures that the user's personal and financial information remains protected during mobile transactions.

When a user initiates a call, sends a text message, or accesses data services, the prepaid SIM card communicates with the network provider to authorize the requested service. The network provider verifies the user's available credit and service eligibility before allowing the requested communication to take place. This real-time interaction between the prepaid SIM card and the network enables users to utilize mobile services based on their available credit balance and the terms of their prepaid plan.

Furthermore, prepaid SIM cards are not tied to a specific mobile device, allowing users to easily transfer the card to a new device as needed. This flexibility adds to the convenience and versatility of prepaid SIM cards, making them an attractive option for individuals seeking control over their mobile communication expenses and usage.

In essence, the functionality of a prepaid SIM card is rooted in its ability to store user data, manage credit for mobile services, and facilitate secure communication with the network provider. By understanding the mechanics of how a prepaid SIM card works, users can make informed decisions about their mobile communication needs and optimize their usage based on their preferences and budget.

Benefits of Using a Prepaid SIM Card

Using a prepaid SIM card offers a multitude of benefits that cater to the diverse needs and preferences of mobile users. These advantages contribute to the widespread popularity of prepaid SIM cards as a flexible and cost-effective mobile communication solution.

Flexibility and Control : Prepaid SIM cards empower users with unparalleled flexibility and control over their mobile communication expenses. With the ability to choose from a variety of prepaid plans that align with their usage patterns, users can tailor their mobile services based on their specific needs, whether it's for voice calls, text messaging, or data usage. This flexibility allows users to manage their communication expenses according to their budget and usage preferences, without being tied down by long-term contracts or commitments.

No Credit Checks or Contracts : Unlike traditional postpaid plans, prepaid SIM cards do not require credit checks or lengthy contracts. This makes them an attractive option for individuals who prefer a pay-as-you-go approach to mobile communication. The absence of credit checks also means that users with varying credit histories can easily obtain and activate a prepaid SIM card, eliminating barriers to accessing essential mobile services.

Cost-Effective Communication : Prepaid SIM cards offer a cost-effective communication solution, allowing users to control their spending by only paying for the services they use. This pay-as-you-go model eliminates the risk of unexpected charges or overage fees, providing users with transparency and predictability in their mobile expenses. Additionally, prepaid plans often include competitive rates for voice calls, text messages, and data usage, enabling users to maximize the value of their communication budget.

Travel Convenience : For travelers, prepaid SIM cards offer the convenience of accessing local mobile services without incurring exorbitant roaming charges. By simply swapping their existing SIM card with a prepaid one upon arrival at a destination, travelers can enjoy seamless connectivity without being tied to long-term contracts or expensive roaming packages. This flexibility empowers travelers to stay connected while abroad and effectively manage their communication expenses.

Security and Privacy : Prepaid SIM cards provide a layer of security and privacy for users, as they do not require personal information such as credit card details or billing addresses for activation. This anonymity offers peace of mind for users who prioritize safeguarding their personal information while enjoying mobile communication services.

Device Compatibility : Prepaid SIM cards are compatible with a wide range of mobile devices, allowing users to easily transfer the card to a new device as needed. This versatility ensures that users can continue to access their prepaid services without being restricted to a specific handset, providing a seamless and convenient user experience.

In summary, the benefits of using a prepaid SIM card encompass flexibility, cost-effectiveness, travel convenience, security, and device compatibility. These advantages make prepaid SIM cards an appealing choice for individuals seeking control and versatility in their mobile communication experience.

Drawbacks of Using a Prepaid SIM Card

While prepaid SIM cards offer a range of advantages, it's important to acknowledge the potential drawbacks associated with this mobile communication solution. Understanding these limitations can help individuals make informed decisions when considering the use of prepaid SIM cards.

Limited Features and Add-Ons : Prepaid plans may have limitations in terms of additional features and add-ons compared to postpaid plans. Certain services, such as international roaming, premium content subscriptions, and extended data packages, may be less accessible or more costly for prepaid users. This can impact the overall flexibility and convenience of using a prepaid SIM card, particularly for individuals with specific communication needs.

Credit Management : Managing the credit balance on a prepaid SIM card requires vigilance. Users must consistently monitor their remaining credit to ensure uninterrupted access to mobile services. In cases where the credit balance runs low, there may be a risk of service disruption until additional credit is loaded onto the SIM card. This ongoing credit management can be a potential inconvenience for users who prefer a more seamless and automated billing process.

Top-Up Requirements : Unlike postpaid plans that provide continuous service with monthly billing, prepaid SIM cards necessitate regular top-ups to maintain active usage. For individuals who may have irregular income or limited access to top-up locations, ensuring a continuous supply of credit on the prepaid SIM card can pose a challenge. This requirement for proactive credit management may not align with the preferences and lifestyle of some users.

Network Limitations : Depending on the specific prepaid plan and network provider, users may encounter limitations in network coverage and service quality compared to postpaid offerings. This can impact the overall reliability and consistency of mobile connectivity, especially in areas with limited network infrastructure. Users who prioritize seamless and uninterrupted communication may find these network limitations to be a drawback of using a prepaid SIM card.

Lack of Billing Flexibility : Prepaid SIM cards do not offer the billing flexibility of postpaid plans, which often include detailed billing statements and the ability to dispute or negotiate charges. This may be a disadvantage for users who require comprehensive billing records for expense tracking or reimbursement purposes. The absence of detailed billing statements can limit the financial visibility and accountability associated with prepaid usage.

Understanding these drawbacks can provide individuals with a holistic perspective on the considerations involved in utilizing a prepaid SIM card. While the benefits of flexibility and cost control are significant, these limitations underscore the importance of evaluating one's specific communication needs and preferences when choosing a mobile communication solution.

Tips for Using a Prepaid SIM Card Efficiently

Monitor Your Usage : Keep track of your voice call minutes, text messages, and data usage to avoid unexpected depletion of your prepaid credit. Many mobile devices offer built-in usage tracking features, and mobile network providers often have online portals or apps that allow you to monitor your consumption in real time.

Choose the Right Plan : Select a prepaid plan that aligns with your communication habits. If you primarily use data for browsing and streaming, prioritize a plan with ample data allowances. Similarly, if you frequently make international calls, opt for a plan that offers competitive international calling rates.

Take Advantage of Promotions and Bundles : Mobile network providers frequently offer promotions and bundled packages that provide additional value for prepaid users. These promotions may include bonus credit, extra data allocations, or discounted international calling rates. Stay informed about these offers to maximize the benefits of your prepaid plan.

Automate Top-Ups : Many mobile network providers offer the option to set up automatic top-ups, ensuring that your prepaid credit is replenished before it runs out. This automation can provide peace of mind, especially for individuals with busy lifestyles or those who may have limited access to top-up locations.

Utilize Wi-Fi Networks : Whenever possible, connect to Wi-Fi networks for data-intensive activities such as streaming, downloading large files, or software updates. By leveraging Wi-Fi, you can conserve your prepaid data allowance and optimize your credit usage.

Manage Roaming Costs : If you travel frequently, familiarize yourself with the roaming charges associated with your prepaid plan. Consider purchasing local prepaid SIM cards when traveling abroad to avoid excessive roaming fees. Additionally, some mobile providers offer international roaming add-ons that provide cost-effective roaming options for prepaid users.

Regularly Review Your Plan : Periodically review your prepaid plan to ensure that it continues to meet your communication needs. As your usage patterns evolve, you may find that a different plan or add-on better suits your requirements, allowing you to optimize your prepaid experience.

Secure Your SIM Card : Protect your prepaid SIM card from unauthorized use and potential loss. In the event of a lost or stolen SIM card, promptly notify your mobile network provider to prevent unauthorized usage and safeguard your remaining credit.

By implementing these tips, individuals can maximize the efficiency and value of their prepaid SIM card usage, ensuring a seamless and cost-effective mobile communication experience.

In conclusion, prepaid SIM cards offer a versatile and user-centric approach to mobile communication, empowering individuals with flexibility, cost control, and convenience. The fundamental principles behind prepaid SIM cards, including their pay-as-you-go model and user-managed credit system, provide users with the autonomy to tailor their communication experience according to their specific needs and budget.

Throughout this overview, we have explored the mechanics of how prepaid SIM cards work, shedding light on the seamless integration between the SIM card, the user's account, and the network provider. The benefits of using a prepaid SIM card, such as flexibility, cost-effectiveness, travel convenience, security, and device compatibility, underscore the appeal of this mobile communication solution for a diverse range of users.

While the advantages of prepaid SIM cards are significant, it is essential to acknowledge the potential drawbacks, including limitations in features, credit management requirements, and network considerations. Understanding these drawbacks allows individuals to make informed decisions and effectively mitigate any potential challenges associated with using a prepaid SIM card.

Moreover, the tips for using a prepaid SIM card efficiently provide practical strategies for optimizing usage, managing costs, and maximizing the value of prepaid plans. By implementing these tips, users can enhance their prepaid experience and make the most of their mobile communication services.

Ultimately, the widespread adoption of prepaid SIM cards reflects the evolving preferences and priorities of mobile users, as well as the increasing demand for personalized and cost-effective communication solutions. As technology continues to advance, the role of prepaid SIM cards in facilitating seamless and accessible mobile connectivity is poised to remain integral to the ever-changing landscape of mobile communication.

In embracing the benefits, understanding the considerations, and leveraging practical tips, individuals can harness the full potential of prepaid SIM cards to meet their unique communication needs, whether for local usage, international travel, or budget-conscious connectivity. With its user-driven approach and adaptability to diverse lifestyles, the prepaid SIM card stands as a testament to the empowerment of individuals in managing their mobile communication experience on their own terms.

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Save my name, email, and website in this browser for the next time I comment.

• Crowdfunding
• Cryptocurrency
• Digital Banking
• Digital Payments
• Investments
• Console Gaming
• Mobile Gaming
• VR/AR Gaming
• Gadget Usage
• Gaming Tips
• Online Safety
• Software Tutorials
• Tech Setup & Troubleshooting
• Buyer’s Guides
• Comparative Analysis
• Gadget Reviews
• Service Reviews
• Software Reviews
• PCs & Laptops
• Smart Home Gadgets
• Content Creation Tools
• Digital Photography
• Video & Music Streaming
• Online Security
• Online Services
• Web Hosting
• WiFi & Ethernet
• Browsers & Extensions
• Communication Platforms
• Operating Systems
• Productivity Tools
• AI & Machine Learning
• Cybersecurity
• Emerging Tech
• IoT & Smart Devices
• Virtual & Augmented Reality
• Latest News
• AI Developments
• Fintech Updates
• Gaming News
• New Product Launches

5 Ways to Improve IT Automation

• What is Building Information Modelling

Related Post

Sla network: benefits, advantages, satisfaction of both parties to the contract, what is minecraft coded in, how much hp does a diablo tuner add, what is halo-fi, what is halo lock iphone, related posts.

Activating AT&T Prepaid SIM Card: A Comprehensive Guide

Obtaining A SIM Card In France: A Comprehensive Guide

Obtaining A New SIM Card: Essential Tips

Quick Guide To Topping Up Your Prepaid SIM

Obtaining A SIM Card In Paris: A Comprehensive Guide

Obtaining A SIM Card In Japan – Guide

15 Amazing IoT Devices For 2024

Activating A Prepaid SIM Card: A Step-by-Step Guide

Recent stories.

What is Building Information Modelling?

How to Use Email Blasts Marketing To Take Control of Your Market

Learn To Convert Scanned Documents Into Editable Text With OCR

Top Mini Split Air Conditioner For Summer

Comfortable and Luxurious Family Life | Zero Gravity Massage Chair

Fintechs and Traditional Banks: Navigating the Future of Financial Services

AI Writing: How It’s Changing the Way We Create Content

• Privacy Overview
• Strictly Necessary Cookies

This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.

Strictly Necessary Cookie should be enabled at all times so that we can save your preferences for cookie settings.

If you disable this cookie, we will not be able to save your preferences. This means that every time you visit this website you will need to enable or disable cookies again.

Security Alert May 17, 2024

Worldwide caution, update may 10, 2024, information for u.s. citizens in the middle east.

• Travel Advisories |
• Contact Us |
• MyTravelGov |

Find U.S. Embassies & Consulates

Travel.state.gov, congressional liaison, special issuance agency, u.s. passports, international travel, intercountry adoption, international parental child abduction, records and authentications, popular links, travel advisories, mytravelgov, stay connected, legal resources, legal information, info for u.s. law enforcement, replace or certify documents.

Get a Passport

Renew or Replace a Passport

Get My Passport Fast

Prepare to Apply

Passport Help

Legal Matters

Share this page:

Frequently Asked Questions

Passport Resources

Next Generation Passport

Passport Videos

We started issuing a next generation U.S. passport book in 2021. The book has new features, such as a polycarbonate data page, laser engraving, and updated artwork.

What is an alphanumeric passport number?

The passport number in the new passport book begins with a letter, followed by eight numbers. The number is located in the top right corner of your data page and the bottom of each page in the book.

Can I still use my old passport issued before 2021?

Yes, if the passport is still valid, you may use it. Since our older passports are secure and meet international standards, they can be used for international travel. 

My passport has fibers in the paper that look like tiny hairs. Is that okay?

Yes. The fibers you see in the paper are part of the U.S. passport pages.

External Link

You are about to leave travel.state.gov for an external website that is not maintained by the U.S. Department of State.

Links to external websites are provided as a convenience and should not be construed as an endorsement by the U.S. Department of State of the views or products contained therein. If you wish to remain on travel.state.gov, click the "cancel" message.

You are about to visit:

Mobile Menu Overlay

The White House 1600 Pennsylvania Ave NW Washington, DC 20500

FACT SHEET: President   Biden Announces New Actions to Secure the   Border

New actions will bar migrants who cross our Southern border unlawfully from receiving asylum Biden taking action as Congressional Republicans put partisan politics ahead of national security, twice voting against toughest reforms in decades

Since his first day in office, President Biden has called on Congress to secure our border and address our broken immigration system. Over the past three years, while Congress has failed to act, the President has acted to secure our border. His Administration has deployed the most agents and officers ever to address the situation at the Southern border, seized record levels of illicit fentanyl at our ports of entry, and brought together world leaders on a framework to deal with changing migration patterns that are impacting the entire Western Hemisphere.  Earlier this year, the President and his team reached a historic bipartisan agreement with Senate Democrats and Republicans to deliver the most consequential reforms of America’s immigration laws in decades. This agreement would have added critical border and immigration personnel, invested in technology to catch illegal fentanyl, delivered sweeping reforms to the asylum system, and provided emergency authority for the President to shut down the border when the system is overwhelmed. But Republicans in Congress chose to put partisan politics ahead of our national security, twice voting against the toughest and fairest set of reforms in decades. President Biden believes we must secure our border. That is why today, he announced executive actions to bar migrants who cross our Southern border unlawfully from receiving asylum. These actions will be in effect when high levels of encounters at the Southern Border exceed our ability to deliver timely consequences, as is the case today. They will make it easier for immigration officers to remove those without a lawful basis to remain and reduce the burden on our Border Patrol agents. But we must be clear: this cannot achieve the same results as Congressional action, and it does not provide the critical personnel and funding needed to further secure our Southern border. Congress still must act. The Biden-Harris Administration’s executive actions will:   Bar Migrants Who Cross the Southern Border Unlawfully From Receiving Asylum

• President Biden issued a proclamation under Immigration and Nationality Act sections 212(f) and 215(a) suspending entry of noncitizens who cross the Southern border into the United States unlawfully. This proclamation is accompanied by an interim final rule from the Departments of Justice and Homeland Security that restricts asylum for those noncitizens.
• These actions will be in effect when the Southern border is overwhelmed, and they will make it easier for immigration officers to quickly remove individuals who do not have a legal basis to remain in the United States.
• These actions are not permanent. They will be discontinued when the number of migrants who cross the border between ports of entry is low enough for America’s system to safely and effectively manage border operations. These actions also include similar humanitarian exceptions to those included in the bipartisan border agreement announced in the Senate, including those for unaccompanied children and victims of trafficking.

Recent Actions to secure our border and address our broken immigration system: Strengthening the Asylum Screening Process

• The Department of Homeland Security published a proposed rule to ensure that migrants who pose a public safety or national security risk are removed as quickly in the process as possible rather than remaining in prolonged, costly detention prior to removal. This proposed rule will enhance security and deliver more timely consequences for those who do not have a legal basis to remain in the United States.

Announced new actions to more quickly resolve immigration cases

• The Department of Justice and Department of Homeland Security launched a Recent Arrivals docket to more quickly resolve a portion of immigration cases for migrants who attempt to cross between ports of entry at the Southern border in violation of our immigration laws.
• Through this process, the Department of Justice will be able to hear these cases more quickly and the Department of Homeland Security will be able to more quickly remove individuals who do not have a legal basis to remain in the United States and grant protection to those with valid claims.
• The bipartisan border agreement would have created and supported an even more efficient framework for issuing final decisions to all asylum seekers. This new process to reform our overwhelmed immigration system can only be created and funded by Congress.

Revoked visas of CEOs and government officials who profit from migrants coming to the U.S. unlawfully

• The Department of State imposed visa restrictions on executives of several Colombian transportation companies who profit from smuggling migrants by sea. This action cracks down on companies that help facilitate unlawful entry into the United States, and sends a clear message that no one should profit from the exploitation of vulnerable migrants.
• The State Department also imposed visa restrictions on over 250 members of the Nicaraguan government, non-governmental actors, and their immediate family members for their roles in supporting the Ortega-Murillo regime, which is selling transit visas to migrants from within and beyond the Western Hemisphere who ultimately make their way to the Southern border.
• Previously, the State Department revoked visas of executives of charter airlines for similar actions.

Expanded Efforts to Dismantle Human Smuggling and Support Immigration Prosecutions

• The Departments of State and Justice launched an “Anti-Smuggling Rewards” initiative designed to dismantle the leadership of human smuggling organizations that bring migrants through Central America and across the Southern U.S. border. The initiative will offer financial rewards for information leading to the identification, location, arrest, or conviction of those most responsible for significant human smuggling activities in the region.
• The Department of Justice will seek new and increased penalties against human smugglers to properly account for the severity of their criminal conduct and the human misery that it causes.
• The Department of Justice is also partnering with the Department of Homeland Security to direct additional prosecutors and support staff to increase immigration-related prosecutions in crucial border U.S. Attorney’s Offices. Efforts include deploying additional DHS Special Assistant United States Attorneys to different U.S. Attorneys’ offices, assigning support staff to critical U.S. Attorneys’ offices, including DOJ Attorneys to serve details in U.S. Attorneys’ Offices in several border districts, and partnering with federal agencies to identify additional resources to target these crimes.

Enhancing Immigration Enforcement

• The Department of Homeland Security has surged agents to the Southern border and is referring a record number of people into expedited removal.
• The Department of Homeland Security is operating more repatriation flights per week than ever before. Over the past year, DHS has removed or returned more than 750,000 people, more than in every fiscal year since 2010.
• Working closely with partners throughout the region, the Biden-Harris Administration is identifying and collaborating on enforcement efforts designed to stop irregular migration before migrants reach our Southern border, expand investment and integration opportunities in the region to support those who may otherwise seek to migrate, and increase lawful pathways for migrants as an alternative to irregular migration.

Seizing Fentanyl at our Border

• Border officials have seized more fentanyl at ports of entry in the last two years than the past five years combined, and the President has added 40 drug detection machines across points of entry to disrupt the fentanyl smuggling into the Homeland. The bipartisan border agreement would fund the installation of 100 additional cutting-edge inspection machines to help detect fentanyl at our Southern border ports of entry.
• In close partnership with the Government of Mexico, the Department of Justice has extradited Nestor Isidro Perez Salaz, known as “El Nini,” from Mexico to the United States to face prosecution for his role in illicit fentanyl trafficking and human rights abuses. This is one of many examples of joint efforts with Mexico to tackle the fentanyl and synthetic drug epidemic that is killing so many people in our countries and globally, and to hold the drug trafficking organizations to account.

Stay Connected

We'll be in touch with the latest information on how President Biden and his administration are working for the American people, as well as ways you can get involved and help our country build back better.

Opt in to send and receive text messages from President Biden.

The 10 best prepaid debit cards you can get without a credit score

Debit cards make it easy to make purchases, shop online, and pull cash out of an ATM. But to use one, you need a checking account —and not everyone has one. 

If you’re a part of  the “unbanked” community, meaning you don’t use or have access to mainstream financial services such as checking or savings accounts, you aren’t out of luck. Prepaid debit cards are designed to be loaded and used right away as opposed to being a credit line that you pay each month. If you want to actually build credit, a secured credit card may be a better choice. But if you just need a handy way to pay, a prepaid debit card will do the job.

The Fortune Recommends TM team evaluated the top prepaid debit cards available today and ranked them based on factors such as fees, rewards, and more. Read on to see our top picks. See our full methodology here .

Best prepaid debit cards of June 2024

Best overall prepaid debit card: greenlight debit card for kids, best for overdraft protection: netspend prepaid card, best for receiving federal benefits: direct express prepaid debit mastercard, best for no fees: cash card, best for credit card-like perks: bluebird by american express, best for online security: movo digital cash card, best for family money management: famzoo prepaid card, best for walmart shoppers: walmart moneycard, best for giving back: one vip visa prepaid card.

• Best for Paypal users: PayPal Prepaid Mastercard

Greenlight Debit Card For Kids

• Foreign transaction fee: None
• Rewards: 1% cash back
• Additional perks and benefits: Identity theft protection, purchase protection, phone insurance for Max and Infinity plans
• Offers up to five cards for the same price
• Parental controls for child spending
• No foreign transaction fee
• Tiered monthly fee
• Limited deposit methods

Why we like this card 

The Greenlight Debit Card For Kids is specifically designed for families and offers unique features that promote financial education for kids while giving parents control and oversight. For example, parents have the ability to monitor and control where and how much their children can spend, including setting specific store-level spend controls. It also allows parents to pay allowances, set spending limits, and categorize these allowances for saving, spending, and giving. The card supports real-time notifications of each transaction, so parents can stay up-to-date on card usage. 

Though there is a monthly fee that starts at $4.95, the Greenlight Debit Card For Kids doesn’t charge any fees for transactions, ATM usage, adding funds, or checking your balance. Additionally, certain membership levels earn 1% cash back, which is deposited to savings (and savings accounts earn up to 5%). 

Netspend Prepaid Card

• Foreign transaction fee: 3%
• Rewards: Payback Rewards
• Additional perks and benefits: Early Paycheck
• Earns cash back
• Earns rewards
• Purchase cushion
• Monthly fee
• No surcharge-fee ATM network
• Foreign transaction fee

NetSpend caters to a range of financial needs by offering multiple card plans, each with its own fee structure. With the monthly plan, you can pay a reduced monthly fee of $5.00 as long as you receive at least $500 in direct deposits each month. There are no transaction fees under this plan.

A key feature of this card is its “purchase cushion.” If you perform a transaction that exceeds your available balance by $10 or less, Netspend may choose to approve the purchase anyway without charging you an overdraft fee. You’ll need to make up for any negative balance though. Enrollment is required for this program.

Another perk of the Netspend prepaid card is that it earns rewards. Simply visit your Rewards page to see which customized offers are available, and click to activate the offers you want.

You can then use your card at those retailers to redeem your offers.

The Direct Express card is free of most fees, including monthly fees, transaction fees, and cash reload fees. Users also receive one free ATM withdrawal with each deposit to the card. Additionally, the card includes federal protections against unauthorized transactions, further bolstered by Mastercard’s Zero Liability Protection, making it a secure and practical option for managing federal benefits.

Cardholders can also participate in the PayPerks program, which offers the opportunity to learn about financial management through educational modules. By participating in these modules and taking quizzes, cardholders can earn chances to win cash prizes in monthly sweepstakes.

How to use a prepaid card Pros and cons of prepaid cards

Direct Express Prepaid Debit Mastercard

• Rewards: Cash back at selected merchants
• Additional perks and benefits: N/A
• No monthly fee
• Ability to get cash back at selected merchants
• PayPerks program
• Must receive federal benefits to qualify

Issued by Comerica Bank for the U.S. Treasury, the Direct Express prepaid card allows for automatic deposit of federal benefits directly to the card. You can use it wherever Mastercard is accepted, including for purchases, bill payments, and ATM cash withdrawals. 

• Rewards: N/A
• Additional perks and benefits: Customizable card design, exclusive access to events, mobile wallet compatibility
• No hidden fees
• Instant discounts on spending
• Must have the Cash App to use
• ATM fee for those who don’t meet direct deposit requirements

Issued by Sutton Bank, the Cash Card is a Visa debit card linked to the user’s Cash App balance, offering a convenient way to access funds for purchases anywhere Visa is accepted. It comes with zero monthly fees, transaction fees, and cash reload fees. Plus, in-network ATM fees can be avoided if you receive at least $300 in direct deposits monthly. Its integration with Cash App’s broader financial services, including money transfers, stock investments, and Bitcoin trading, making it a robust financial tool.

The card also features instant discounts at certain merchants like coffee shops and restaurants. Users can also enroll in round-ups to help grow their savings. Security-wise, it offers helpful features like the ability to pause the card instantly via the app and PIN or fingerprint locks.

Bluebird by American Express

• Additional perks and benefits: Purchase protection, access to Amex Offers
• Can add subaccounts
• Money-saving Amex Offers program
• Fee to reload at non-Walmart retailers
• Amex is not as widely accepted as Visa or Mastercard

The Bluebird by American Express is a prepaid debit card created in partnership with Walmart. It stands out for its lack of monthly, transaction, and activation fees. Users can benefit from features like direct deposit and online bill payments. It also offers a robust mobile app for account management, including mobile check deposit and money transfers. 

As an American Express product, it includes perks such as purchase protection, fraud protection, and roadside assistance. Free ATM withdrawals are available at MoneyPass ATMs, and cash can be easily reloaded for free at Walmart. Additional features include the ability to create subaccounts for precise budget management and 24/7 customer service with emergency assistance.

Movo Digital Cash Card

• Heightened security with digital card numbers
• Converts cryptocurrency to USD for spending
• No free ATM network

The MOVO Digital Cash Card is a prepaid, reloadable debit card that emphasizes a digital-first banking experience. A standout feature is the ability for users to create temporary, disposable digital card numbers for secure online transactions, which goes a long way toward preventing fraud. But if you prefer in-person shopping, don’t worry: users also receive a physical Mastercard debit card that can be used in stores, online, and at ATMs. The card also facilitates free person-to-person transfers within its network.

FamZoo Prepaid Card

• Additional perks and benefits: $15 referral bonus
• Customizable subaccounts
• Parental controls and incentives for child spending
• Cash reload fee

Similar to Greenlight, the FamZoo Prepaid Card is a family-friendly debit card designed to teach children and teenagers about money management in a practical, hands-on way. A standout feature of FamZoo is its ability to create multiple cards under one family account, allowing parents to allocate funds and oversee the spending of each child individually. Parents can set up automatic allowances, assign chores, and reward kids for good financial behavior. FamZoo also allows for parent-to-child and sibling-to-sibling money transfers. 

There are no fees for standard card activities like purchases or ATM use within the network, though a monthly subscription fee applies. 

Walmart MoneyCard

• Rewards: 3% cash back on Walmart.com purchases, 2% at Walmart fuel stations, 1% in Walmart stores
• Additional perks and benefits: overdraft protection, early direct deposit
• Free cash withdrawals and reloads at Walmart locations
• Up to four free family accounts
• Monthly fee (can be waived by meeting certain requirements)
• Cash back is capped

The Walmart MoneyCard, issued by Green Dot Bank , offers up to 3% cash back on Walmart.com purchases, 2% at Walmart fuel stations, and 1% in Walmart stores (total annual cash back limit is capped at $75). The card also offers a savings account option with a 2% interest rate on balances up to $1,000 and opportunities to win cash prizes. 

There’s a monthly fee of $5.94, which can be waived with a minimum of $500 loaded onto the card in the previous month. The card provides free cash withdrawals at Walmart stores and ATMs in the MoneyPass network. Meanwhile, the Walmart MoneyCard app provides features such as depositing checks and managing funds. Family accounts are also available for members aged 13 and above. 

ONE VIP Visa Prepaid Card

• Rewards: Earn 1 point for every $2 spent on everyday purchases, or 1.5 points for every $1 spent at certain brands including Netflix, Uber, Sephora and at select Black owned businesses. 
• Option to donate rewards to charity
• Digital wallet access
• Higher monthly fee

Issued through Stride Bank, N.A., the ONE VIP Visa Debit Card is a prepaid card focused on supporting the Black community, offering a rewards program that earns up to 1.5% cash back on purchases, particularly at select Black-owned businesses. Cash back can be applied to your account, or you can choose to make a charitable donation to a cause benefiting communities of color.

The card is accompanied by a mobile app for managing funds, viewing transactions, and depositing checks. It charges a monthly fee of $7.95 but avoids hidden fees, minimum balance requirements, and overdraft fees. 

Best for Paypal users: Paypal Prepaid Mastercard

Paypal prepaid mastercard.

• Foreign transaction fee: 4%
• Rewards: Payback rewards
• Additional perks and benefits: $20 referral bonus
• Free cash back at retail outlets
• Free transfers from your Paypal balance
• Ability to earn rewards at certain stores
• High foreign transaction fee

The PayPal Prepaid Mastercard is a versatile prepaid debit card that offers easy integration with your PayPal account. It enables users to transfer funds from their PayPal balance directly onto the card. Additionally, the card can be loaded through direct deposit of paychecks, tax refunds, or government benefits, as well as cash additions at retail locations, including more than 130,000 NetSpend Reload Network locations nationwide. 

While the card is associated with some fees, such as monthly charges, ATM withdrawal fees, and reload fees at certain retail outlets, it does offer special offers and Payback Rewards when you shop at qualifying stores. This optional program awards cash back to your account.

Remember, while they can be a useful way to manage your money and they don’t require a credit check for approval, prepaid debit cards do not help you build or improve credit history. If you want to help your credit score, consider a secured credit card.

What is a prepaid debit card?

A prepaid debit card is a reloadable payment card that is pre-funded by the user. Unlike traditional debit cards that are linked to a bank account, a prepaid card’s spending limit is set by the amount of money loaded onto it, so there’s no need to have a bank account at all. 

These cards are accepted in most places where regular debit or credit cards are used, including online retailers. However, they often come with various fees, such as monthly maintenance and reloading fees. Additionally, they don’t influence credit scores, since card activity is not reported to the credit bureaus.

How much do prepaid debit cards cost? 

Prepaid debit cards are notorious for their fees, though the exact cost depends on the issuer and how you use the card. Common fees include the initial card purchase cost, monthly maintenance fees, cash reload fees, and ATM withdrawal fees. While less common, some cards charge per-transaction fees. And using the card internationally can incur foreign transaction fees of around 1% to 3%. Cards might also have inactivity fees if not used regularly, fees for customer service access or paper statements, charges for card replacement, and fees for closing the account. 

That said, the best prepaid cards will charge minimal fees and offer ways for users to keep costs down. That’s why it’s crucial to evaluate multiple prepaid card options and review their terms and conditions to understand all potential fees before opening an account.

Who needs a prepaid debit card? 

Prepaid debit cards are primarily designed for people who don’t have traditional bank accounts, since they provide a convenient alternative for managing daily transactions and receiving direct deposits. These cards can also be helpful to those who need help controlling their spending, since they’re limited to the preloaded amount, thus avoiding overdrafts and debt accumulation. Parents may also find prepaid cards useful for teaching financial responsibility to teenagers and young adults since they can set spending limits and get real-time transaction alerts. 

Frequently Asked Questions 

How do i get a prepaid debit card.

You can purchase prepaid cards online, at some retailers, and from certain banks and credit unions. 

What is the disadvantage of a prepaid card?

Though they can be convenient for some people, prepaid cards do have some notable drawbacks. For one, they are often laden with fees, which can erode the card’s balance over time. Also, unlike credit cards, prepaid cards don’t contribute to building or improving your credit. Prepaid cards typically offer limited consumer protections as well; in cases of loss or theft, you might not receive the same level of security against unauthorized transactions as offered by traditional bank cards. 

Where can you not use a prepaid card?

Most prepaid debit cards belong to a certain network, as indicated by the logo (Visa, MasterCard, American Express, or Discover) and can be used anywhere that brand is accepted. However, there are certain types of transactions that aren’t allowed with prepaid debit cards, including credit card or loan payments. 

Our methodology 

To bring you our top picks for the best prepaid debit cards, the Fortune Recommends team compared the top cards currently available from major issuers that are accessible nationwide. To learn more about how we rate credit cards, see our credit cards methodology .

We ranked each account in these eight core categories: 

• Retail/physical card price (5%): Some cards may charge a one-time fee for obtaining a physical card. 
• Transaction fee (25%): In some cases, there is a fee associated with each transaction you perform with the prepaid card. We docked cards significantly for charging transaction fees.
• Monthly fee (25%): It’s common for prepaid cards to charge a monthly service or administrative fee, though not all do. We prioritized cards with no monthly fees in our rankings.
• Cash reload fee (10%): You may be charged a fee for adding funds to your card in person at select retailers. Cards that charge for this service received lower scores.
• In-network ATM fee (10%): Some prepaid cards allow users to make withdrawals for free at ATMs that are within the selected network. However, others charge per ATM withdrawal, regardless of the ATM’s network, in which case they were penalized in our rankings. 
• ATM balance inquiry fee (10%): Cards that charge a fee to check your balance at an ATM were also penalized.
• Foreign transaction fee (5%): Some cards may charge a fee for performing transactions abroad. We prioritized cards that do not charge foreign transaction fees. 
• Rewards (10%): Cards that also provide rewards (such as cash back or points ) on spending were given a boost in our rankings.

Keep in mind that the fee structures and other features associated with the cards mentioned are subject to change. 

About the author

Dia Adams is the senior editor leading the credit cards team at  Fortune Recommends . Previously, Dia was a managing editor on the credit cards and travel rewards team at Forbes Advisor. She is the author of Amazon Bestselling book “Disney World Hacks,” and she has been featured on national television, radio, print, and online media as an expert in the realms of credit cards, points and miles, Disney and family travel. 

Please note that card details are accurate as of the publish date, but are subject to change at any time at the discretion of the issuer. Please contact the card issuer to verify rates, fees, and benefits before applying.

EDITORIAL DISCLOSURE : The advice, opinions, or rankings contained in this article are solely those of the Fortune Recommends ™ editorial team. This content has not been reviewed or endorsed by any of our affiliate partners or other third parties.

Guide to understanding credit

How to use a prepaid debit card—the tool that lets you leave your cash at home, a prepaid debit card is an easy way to charge it—here's what you need to know, 6 ways to build credit without using a credit card, we all start with zero credit. here's how to build credit with a credit card the smart way.