What Makes Prepaid Cards Different From Others


If you currently don’t have a bank account and you are looking for an effective way to manage your money, you have a trusted ally in prepaid cards. Undoubtedly, prepaid cards are one of the best options available at your disposal. So what is a prepaid card exactly? How do prepaid cards work? And what makes them different from the others?

The Lowdown on Prepaid Cards

A prepaid card is a powerful financial tool that allows users to spend the money they have available on their cards. Just like debit cards, a prepaid card can be used at merchants that honor its payment network. Nowadays, a prepaid card is considered way more convenient than using cash.

Prepaid cards are also known by other names including pay-as-you-go cards and general purpose reloadable cards. Unlike other plastic cards, prepaid card transactions are limited by the balance that’s available on the card. In other words, spending stops automatically once you have depleted all the balance.

Fortunately, once you have loaded money onto your card, you can use the prepaid card right away for purchase transactions and ATM withdrawals. What makes prepaid cards even more ideal is they are very easy to secure. You won’t have to undergo background checks or submit financial documents just to obtain one.

What Makes Prepaid Cards Different From the Others

Prepaid cards differ from the other plastic cards in several ways. For instance:

Reload Options

There are several ways to load money onto a prepaid card depending on the issuer. Prepaid card issuers can load money through direct deposits, merchant retailers, and secure online portals. Other prepaid card loading options include mobile check deposits through smartphones and online transfers.


In most cases, transactions that will merit fees can include deposits, card activation, and the use of out-of-network ATMs. Some issuers will also implement a monthly fee. Others also provide the option to have the monthly fee waived. Some prepaid card issuers can also charge a small fee each time you use the card, regardless if it’s for ATM withdrawals or purchase transactions (merchants or online).

ATM Access

Some prepaid card providers provide cardholders access to ATM networks for free. Prepaid cards that are issued by banks are also given access to branded bank networks by some providers.


Prepaid cards don’t have the liability or fraud protection that many debit cards have. However, this setup can change in the future. Some prepaid cards also provide purchase protections. Unfortunately, it is sometimes difficult to dispute some unauthorised transactions that are carried out using the card.

There is one safeguard however that many prepaid cards have. This safeguard is the federal deposit insurance. This means the money of the cardholder is covered in the event that the prepaid card provider goes bankrupt.

Expiration Dates

Most prepaid cards come with an expiration date. However, you will be reissued another one after the expiration date. The great thing is funds that are loaded on the card will have no expiration date.

Other Features

Some prepaid card issuers offer exciting and enticing perks that are hard to match like check writing, online bill payments, and multiple cards for family members. A rare few of the prepaid card issuers also provide exciting perks such as cash back on purchases—a feature that’s only common among credit cards.

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