EXTENSION CONNECTION: Defining prepaid or reloadable cards

Published: Tuesday, March 19, 2013 at 18:18 PM.

A major difference between prepaid cards and a credit or a debit card is that the cards have to be "loaded" with money before you can use them. When the balance gets low, you can reload; that is, add more money, as the name implies. Depending on the card, you can reload online, in person or through a direct deposit from a work place.

Advantages:

•They can be safer than cash. If the card is registered with an issuer and it’s lost, you can recover your full balance.

•They are convenient like credit cards but don’t allow users access to a credit line.

•Account activity does not affect your credit.

•Credit checks are not required to get a prepaid card.

•Prepaid cards that allow direct deposit may save you money by allowing online and telephone payments for other debts.



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