Chosen cards:
Best Credit Offers For You
Limited Credit Offers
Credit Card Companies
Credit Cards by Rewards
Debit Cards
Credit Cards by Bank
Ask Your Question Now
Ask Your Question Now
Horizon Card Services Horizon Gold Credit Card

A Beginner’s Guide To Prepaid Cards

[Tuesday, August 9th, 2016]

Question: When is a credit card not a credit card?
Answer: When it’s a prepaid card.

Do you know the ins and outs of prepaid cards? If not – if, perhaps, you aren’t even entirely sure what a prepaid card is – then this article will tell you all you need to know. Read on to find out about some of the hottest and most popular cards out there: cards that look like a credit card and act like a credit card, but aren’t credit cards.

Prepaid cards, as I said, look just like credit cards. Visa, American Express, or MasterCard may issue them. And you use them like credit cards, by sliding them, tapping them, or inserting them into card readers. The difference is, with a credit card, you have to pay back the money that you spent later on, after you bring home your purchase. With a prepaid card, you’ve already spent the money, so you don’t owe anything after you make that purchase.

Here’s how it works: you decide how much you’d like to be able to spend using your prepaid card. It could be $10, or $1,000. You load that money onto the card, and then you spend it. In that sense, it works a lot like a debit card, only instead of taking money from your checking account, it takes it from your prepaid card account. Once the money is gone, you can’t buy anything else until you load more money onto the card. You can do this by transferring money from your bank account, receiving a direct deposit onto the card, or loading cash onto the card at a register where your particular brand of card can be reloaded.

Oh, here’s another thing about prepaid cards: you can get one no matter what your credit score is like. So if your credit is nonexistent or bad, but you need a card that functions like a credit card, a prepaid card may be the answer for you. The downside to this is that a prepaid card won’t help you mend your credit or establish credit in any way. Since it is not technically a credit card, nothing is reported to the credit bureaus. So it’s a net-zero effect.

Another great thing about prepaid cards is that you can use one in place of a traditional bank account. Since you can set up direct deposits and bill payment on them, it’s easy to just replace your bank with a prepaid card, if you so desire. More and more people are doing this now when they become disgruntled with the fees charged by their banks. You can get cash from an ATM, pay for purchases online or in stores, pay bills, and get paid: what more do you need?

One more good use for a prepaid card is to use it for your teenager, as an allowance and a financial education tool. Once your child is 13 years old, he or she can get a prepaid card on a family account with you. You can load money onto it and track exactly what is spent, and where. You can also take money off of it, if you decide to revoke some allowance for irresponsible behavior on your child’s part. Very handy!

Prepaid cards are easy to use and have many great features – and they are becoming more and more popular. Want to try one? Apply today.

See also

Q: The Hottest Payment Trends To Watch For In 2018

Every year, there’s something new in the payment space, whether it’s an amazing new travel rewards credit card, free credit score reports for cardholders, or new ways to utilize mobile payment technology.

more ››
Q: Why Prepaid Cards Are The Hottest Financial Trend Going

Prepaid cards are suddenly everywhere, it seems. Teenagers have them, college kids have them, parents have them, and even grandparents are using them.

more ››
Q: The 4 Types of Cards Most People Carry

Most of us have wallets packed with plastic—but what exactly is it that we’re carrying around, anyway? It’s not just credit cards, although the average household has more than three credit card accounts.

more ››
Q: Prepaid Cards: A Guide to the Different Types

When it comes to prepaid cards, it’s not unusual to get a little confused as to the different types out there. Prepaid cards are more popular than ever and no two are exactly the same.

more ››
Q: 5 Things You Can Do With a Prepaid Card

Prepaid cards are increasing in popularity, with more and more people becoming wise to the benefits of using cards instead of cash. But even if you’re already a pro at using prepaid cards, you may not know all the things you can do with it.

more ››
Copyright © 2004-2018
All Rights Reserved.
Read the online credit card application for details and to review the credit card's terms and conditions. Keep in mind that information presented without warranty on this website and subject to change. This website may be compensated by credit card issuers when visitors apply for a credit card through this website. is an independent, advertising-supported web site. The credit offers that appear on this site are from companies from which receives compensation. This compensation may have an impact on how and where credit products appear on our site, including, for example, the order in which they may be listed on our site pages. does not review or offer all available credit products.
* The webpage is a free service and an information resource for credit cards and financial products and services available to eligible United States consumers. does not offer any warranties and is not a direct service. There are no guarantees for approval or offers when applying for a credit card. Please refer to the application if you would like more information on each credit card. When you click "Apply" for a particular credit card, please take the time to review the terms and conditions of the product/service at the issuer's website. All logos on the website are property of their respective owners.
Disclaimer: This editorial content is not provided or commissioned by the credit card issuer. Opinions expressed here are the author's alone, not those of the credit card issuer, and have not been reviewed, approved or otherwise endorsed by the credit card issuer. Reasonable efforts are made to present accurate info, however all info is presented without warranty. Consult a card's issuing bank for terms & conditions.
Disclosure: Not an access card.