Over the years, the best prepaid cards have become one of the most trusted ways to make purchases both in stores and online. They are also considered as the ideal travel companion for those who travel outside the country on a consistent level.
While the best prepaid cards can share many surface similarities with credit and debit cards, they have distinct differences. For starters, prepaid cards need to be loaded with a predetermined amount before it can be used for purchase transactions or ATM withdrawals.
If you’re like many people, you’re probably considering getting a prepaid card or you’re considering getting one. However, do you know how to use your prepaid card to its full advantage? Start by getting to know the basics of your prepaid card.
Below are 5 of the top questions about prepaid cards and the answers to them:
Question No. 1: Are there regulations that apply to prepaid cards?
Regulations that apply to prepaid cards can differ based on where you live and the issuer of the cards. However, for prepaid cards that are provided by federally regulated financial institutions, they are covered in the Prepaid Payment Products Regulations.
As a general rule of thumb, consider it best to check all there is to know about the prepaid card before deciding which one to pick. Nowadays, most prepaid cards already have websites you can check. Make sure you do your due diligence and find out all there is to know about a prepaid card you’re considering.
Question No. 2: Do you have to pay for an activation fee? How much is it?
Some issuers of prepaid cards can charge users with an activation fee before the card can be used. However, the fees will depend on the issuer and the prepaid card chosen. In some cases, prepaid cardholders are charged depending on the card’s value or a pre-set rate might be associated with the card.
Question No. 3: Do prepaid cards have expiry dates?
Most prepaid cards don’t have expiry dates unless they are distributed as promotional cards. Depending on the issuer, a prepaid card might have an expiry date. However, you can always check with the issuer if there is an expiry and verify with them if there are any fees should you want a renewal card.
Question No. 4: What other fees apply to my prepaid card?
In most cases, the fees are determined by the issuer. In other cases, it will depend on the features of the prepaid card. For instance, prepaid cardholders can be charged a minimal fee when checking their balance, customising the card, reloading money onto the card, purchasing goods and services online, and replacing stolen or lost cards.
Also, it would be wise to check with your prepaid card issuer if you are required to pay an amount should you decide to cancel your card. Other prepaid card issuers might also charge cardholders if their card has stayed dormant for a long period to cover overdraft or monthly maintenance. In line with this, consider it best to go over and review the fees that apply to your chosen prepaid card.
Question No. 5: What happens if my prepaid card gets lost or stolen?
In the event that your prepaid card gets lost or stolen, you are advised to report the incident immediately to your card issuers. In most cases, prepaid card issuers will transfer whatever balance is left on the stolen or lost card to the new one. While you’re at it, consider it best to also check with your issuer if there are additional fees you are required to pay to replace the lost or stolen card.