Prepaid cards

A prepaid card is a payment card that you can use to pay for purchases. Prepaid cards can be either physical or electronic. When you use the card, the merchant deducts the amount you use from the total amount on the card.

Types of prepaid cards

There are different types of prepaid cards.

Prepaid cards issued by a financial institution

Prepaid cards issued by a financial institution link to certain payment card networks, such as:

The payment card network logo will be on the card. You can use the prepaid card at most merchants that accept credit cards from the same payment card network. For example, you may use a prepaid Mastercard at a store that accepts Mastercard credit cards.

Note the following about prepaid cards issued by a financial institution:

Replacing a prepaid card after it expires

If your prepaid card expires and it still has money on it, contact the prepaid card issuer.

The card issuer may:

The card issuer may charge you a fee for these services.

Promotional prepaid cards

You may get a prepaid card as part of a promotional, loyalty or award program. Like other prepaid cards, they link to a payment card network.

Note the following about promotional prepaid cards:

Read the card agreement carefully for details about the terms and conditions.

Fees to use a prepaid card

Fees can lower the value of your prepaid card. This means you’ll have less to spend. Review the terms and conditions of your prepaid card to find out what fees apply.

Depending on the kind of prepaid card you have, you may need to pay fees to:

Activation fees

Some prepaid cards charge an activation fee or purchase fee. You pay the activation fee only once. The fee isn’t refundable. Activation fees vary. They can be a flat fee or can depend on the card’s value.

If there’s an activation fee, it takes money from your card. For example, if a $50 prepaid card has an activation fee of $4.95, then the actual amount of money on the card is $45.05.

Checking your prepaid card balance

Most prepaid cards offer several ways to check your balance and transactions, including:

You may have to pay a fee to check your balance.

Prepaid cards from federally regulated financial institutions must provide a toll-free number so you can check your balance.

Using a prepaid card

Before buying the card, find out if the places where you shop accept the card, such as:

A merchant can decline a prepaid card if:

Registering your prepaid card

You must register your card to be protected from unauthorized transactions if it’s lost or stolen. Unauthorized transactions are transactions you didn’t make or approve.

To register a prepaid card, you usually have to give the card issuer the card’s registration number and your contact information.

Reviewing the terms and conditions of a prepaid card

Each prepaid card has different terms and conditions. Take time to review your prepaid card agreement so that you’re aware of any expiry dates, fees or limits.

Find out what key details your financial institution must give you when you get a prepaid card.

Cancelling a prepaid card

Generally you can’t cancel a prepaid card. The only way to access the funds is to use the card.

Some card issuers will allow you to cancel the prepaid card for a fee. The issuer deducts the fee from the remaining balance before you get any money back.

Check the card’s terms and conditions for more details.

Paying bills with a prepaid card

You may be able to pay bills with a reloadable prepaid card. Check your agreement and ask your issuer. Find out if the merchant or service provider accepts prepaid cards.

Holds on funds when using your prepaid card

Restaurants, businesses that provide a service, hotels, car rental agencies or pay-at-the-pump gas stations may put temporary holds on the money on the card. This may limit the amount of money available. Check your balance after using your prepaid card.

For example:

Lost or stolen prepaid cards

Report your card if it’s lost or stolen. The prepaid card issuer may transfer money left on the card to a new card. Check whether a fee applies.

In some cases, losing the card is the same as losing cash. You can’t recover the money on the card.

Unauthorized transactions

If your prepaid card is lost or stolen, report it to the financial institution that issued your prepaid card as soon as possible. In some cases, you may not get your money back for any transactions made before you reported the card lost or stolen.

You may not have to pay for an unauthorized transaction if your prepaid card is covered by a zero liability policy or fraud protection guarantee.

This may include cards which are:

You may have to pay for unauthorized transactions if you didn’t act responsibly to protect your card or if you shared your personal identification number (PIN).

Check your prepaid card agreement to see what happens if your card is lost or stolen.

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