How Do Prepaid Debit Cards Work?

Prepaid debit cards also known as reloadable cards is a card that debits a sum of money from a user’s account that literally makes use of a PIN code for verification.

Basically, prepaid debit cards is an alternative for general public who do not own a standard account, credit card or a regular debit card. Prepaid debit cards are very easy and convenient to use without any hassle, and they are secured with a security pin and this makes the protection of your money more secure.

With a prepaid debit card, there is no need for an actual bank account, and this makes it more convenient as it can be used in stores, to pay rent and usually for general use. Because prepaid debit card does not require a bank account, it can be use as a gift for friends or relatives.

 Are you looking forward to having a prepaid debit card of your own?, or are you curious on how prepaid debit cards works?, this short review will give you an insight on ‘”How to do prepaid debit card works”

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How Does Prepaid Debit Cards Work?

Prepaid debit cards are very easy to use and similar to gift cards. Prepaid debit cards are cards that allow you to spend the money you have loaded into your prepaid cards ahead of a new transaction, it is just like paying in advance for something you’ve not had yet.

Sometimes, some card providers offer credit on your prepaid debit card, and this means you can actually request for an overdraft but they must meet some terms and conditions.

They normally link the prepaid debit car to a pin code that gives you access to spending or paying for stuff. When you purchase/request a reload card, you may pay the actual summer of money you want to load to your reload card, including the cost charge of the card.

One perk of having a prepaid debit card is that you don’t need to have a bank account in order to have a prepaid card, but they need it to have one in case you want to check your account directly.

For prepaid debit cards, here is how to reload your prepaid debit cards, you can:

  • purchase a prepaid/reload pack in order to add some sum of amount to your card
  • send money from a PayPal account to your prepaid card.
  • directly deposit a paycheck to your prepaid card.
  • easily transfer money from a checking account to your prepaid card or use reload cards like MoneyPak, Walmart, or MyVanilla.
  • add funds at so financial retail locations (Walmart, Walgreens) or transfer money from a bank account.
  • have your friend/family make a direct deposit onto your card.

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Types of Prepaid Debit Cards?

Here is a list of prepaid debit cards:

1. Retail Prepaid Cards is a type of prepaid card that can be used in stores, petrol suppliers, airlines or supermarkets. They are common and easy to use because they often attract discounts.

2. Prepaid Travel Cards is a type of a prepaid card that covers your traveling expenses.

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3. Prepaid Cash-back Cards is a type of a prepaid card that covers your general expenses.

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Types of Fee(s) Charged on a Prepaid Debit Card

Generally, they are some charges on prepaid debit cards, although some are more or less than others. Here is a list of fee charges on a prepaid debit card:

1. Prepaid Monthly fee; A prepaid monthly fee is a fixed fee, that you’ll pay every month. Monthly fees on some cards are more than others and some do waive the fees occasionally.

2. Prepaid transaction fee: is a cost that a user has to pay each time they make use of a prepaid debit card and some of these fees can be reduced.

3. Balance inquiry fee: this type usually takes place when you make use of your card at ATM stand for checking your balance

4. Other fees include: Cash reload fee, Paper statement fee, Decline fee, Inactivity fee, Card-to-card transfer fee, Card replacement fee, Bill payment fee, Foreign transaction fee, Card cancellation fee, and others.

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Benefits of Having a Prepaid Debit Card?

Prepaid debit cards are easy to use and more secure as we often see them as a safe haven. With a prepaid debit card, there is no credit check, and you don’t really need a bank account, and prepaid cards are always available for many purchases.

Prepaid debit cards help users to increase their credit score and also offer secure payment. Prepaid debit cards are mostly free and you don’t need to go through a credit check in order to have access to a Prepaid debit card.

You can only load money into your prepaid card and can use it for diverse use such as online bills, at supermarkets, gas stations, and more.

What are the Advantage of using a Prepaid Debit Cards?

Here are a few advantages of Prepaid debit cards:

1. Prepaid debit cards are much more convenient to use than others, You can use a prepaid card in gas stations, online stores, supermarkets, for traveling, and more.

2. When you make use of a prepaid debit card, there is a big chance of you not getting into any debt bondage because the money in your prepaid card is yours and you can only withdrawal what is yours has prepaid card providers don’t offer overdraft to users.

3. Prepaid cards are safe and secure to use. In some cases, they enable prepaid debit cards to free/cheap ATM networks.

4. If you are strictly on a tight budget, Prepaid debit cards can help you plan well for you and your family (budget-wise) with a lower risk of spending over your budget. With a prepaid card, there is a better chance of keeping track of your financial transactions. You can set spending limits that will help you budget. And it does not limit them to online transactions, as you can also withdraw cash from ATMs.

What are the Risk of Using Prepaid Debit Cards?

1. One disadvantage of using a prepaid debit card, is the diverse fees collected for each transaction, each time you make use of your prepaid card, you get debited for each transaction. Some card providers usually waiver some fees, making it easier than others. Some of the fees collected may include: transaction fees, ATM fees, Monthly fees, foreign transaction fees, Balance inquiry fees, and any other charges, you can even lose your money due to inactivity.

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2. With the use of prepaid debit cards being on the rise, there is also an increase in money laundering, and this is one major risk of using a prepaid debit card. 

3. When you make use of a prepaid debit card without a bank account, you’re are on banking with a risk, because your prepaid card is not protected, and it won’t increase your interest or help you build your credit.

4. While some prepaid cards serve as money saved for certain people, they don’t do the same for others as they do not control spending, mostly because of the various fees attached to a prepaid card. 

5. Some prepaid card puts a limit to the amount of money you can reload or withdraw during a time frame usually within a day or month.

What are the Fraudulent Activities Associated with a Prepaid Debit Card?

1. Stolen Prepaid Cards

Stolen prepaid cards are a common fraudulent activity that a swindler does in recent times, they steal a working prepaid debit card and make use of them (with or without the pin code). 

2. Card Reloading Fraud:

Swindlers steal/collections a prepaid card that doesn’t belong to them and put a call through to the card providers and defraud them by insisting that they are from the payment processor and 

3. Advance Fee Scams:

This type of scam has been around for a long time, fraudster sends direct message/email to their victims promising them a lot of money if they can purchase a prepaid card and pay for taxes and other miscellaneous fees ahead and use them.

4. Prepaid Card Tax Fraud

A lot of states/province enable refunds to go to prepaid cards, more like a cash back. And this allows fraudsters to activate tax forms with incorrect information from stolen identities.

5. Prepaid Card Repair Fraud

This type of scam is very similar to that of an advance fee scam, as swindlers calls their victims, information them about some prepaid card repair and request for money in order to help them.

6. Prepaid Card Swapping

This type of scam involve the scammer going to a store and swapping a fake card (clone) with the real one and peradventure someone purchased the fake card and load them the scammer gets to redeem the funds from the card.

7. Skimmed Cards

This type of scam is similar to that of Swapped card. A scammer scrape the card information from the magnetic stripe of a prepaid card, and when someone buys and enable the card, the scammer makes use of the skimmed card to his own benefit.

Who Can Own a Prepaid Debit Cards?

Are you curious on who can use a prepaid debit card? Well anyone can make use of a prepaid debit card because they are easy to use, they are reliable and secure.

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With as prepaid card you can set a spending limit on your account, making you plan well for your future and family. They are easy to carry and can be use anywhere you decide to use your card.

Where Can I Use a Prepaid Debit Card?

Your prepaid debit card can be use anywhere and anytime without any restrictions.

You can make use of your prepaid card at Supermarkets, Stores, Gas station, Retailers, you can pay your bills with it or withdraw cash using ATMs, and many more

Where Can I Request for a Prepaid Debit Card?

One of the best way to request for a prepaid debit card, is by signing up online on the bank’s official page.

These prepaid cards are provided by credit card companies or bank and you can make use of them for literally everything, some of these card providers makes it easy for their customers by waiving some fees like ATM fees and other fees.

Are Prepaid Debit Cards Free?

When you request for a prepaid debit card online, they are free when you sign up online and they are issued by banks and other standard financial institute like American express,, Visa, MasterCard, Discover and others.

1. Bluebird American Express card: offers zero monthly fees, Foreign Transaction Fees: and ATM fees.

2. Greenlight Prepaid Mastercard: offers interest payment of 2%.

3. PayPal Prepaid Mastercard: offers free transfer and other amazing perks.

4. Chase Liquid Prepaid Card: offers free access to any Chase ATM

5. Walmart MoneyCard: offers up to $75 cashback

6. Brinks Prepaid Mastercard: offers zero purchase fees and no monthly fees

7. Movo Virtual Prepaid Visa Card: offers zero monthly fees

8. Netspend Visa Prepaid Card: offers zero reload fees and transaction fees.

9. Others includes MoneyPass, FamZoo, Allpoint and more.


Are prepaid debit card totally free?

Prepaid debit cards are free when you sign up online.

What is a Letter of Credit and How Does it Work?

Answer: You can purchase a prepaid/reload pack in order to add some sum of amount to your card or send money from a PayPal account to your prepaid card.

Are prepaid debit card safe to use?

One of the advantages of a prepaid debit card is that, they are easy and safe to use.

Do I need a bank account for my prepaid debit card?

You do not need a bank account for a prepaid debit card, just few personal information will be required.

How long does it take before I can use my prepaid card?

You can make use of your prepaid card, once you activate your account online.


Prepaid debit card is very similar to having a gift card, and they are easy to get and easy to use. If you are looking forward to saving more, you should consider having a Prepaid Card.

With a prepaid card, you don’t need any actual account as they can be owned without having an account. I do hope I have answered most of your questions on How do prepaid debit card works.




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