How do Prepaid Cards Work?

For the last few years, prepaid cards have practically raced ahead of debit cards and credit cards. Today, they are the most used form of plastic money and quite productive too. Let’s see how do these prepaid cards work and should you purchase one?

Prepaid cards widely vary in nature, but all of them tend to offer the features as mentioned below:-

Reload Capital Option – This means that most prepaid cards available in the market are not a one-time-use. They can be reloaded with funds and put to use as before. The best example is IMPS Indepay. The company allows its prepaid card users to add money to their cards using IMPS service anytime, anywhere.

ATM Withdrawals – Most prepaid cards come with free nationwide ATM network access. This means that you can withdraw money using your prepaid card at any of these authorized ATMS across the country.

Fees – A nominal fee is charged by most prepaid card issuing companies – either in the form of activation fee, for making deposits or for using out-of-network ATMs. Most issuers also charge a monthly fee, which may be waived off sometimes if one subscribes to the issuer’s some specific packages.

Amount Limit – Different prepaid card issuers have different upper limits set. Read the terms and conditions properly before using a prepaid card.

Protection – Most reloadable prepaid cards available in the market come minus liability or fraud protection function. But, there are some cards that offer purchase protection. These transactions must not be unauthorized in nature. One safeguard policy does follow here – the federal insurance. This means that your money is covered if your card issuer becomes bankrupt.

Expiration Date – Almost all prepaid cards, like debit and credit cards, come with an expiration date. This means that, post a certain time period, you are liable to apply for a fresh card or get the time period extended of an existing card from the issuing company.

Other features – Some prepaid cards allow you to write cheques, make online payments, purchase stuff in a mega store, a shopping mall and even at a restaurant. A rare few cards, even provide reward points such are liable for cash backs or purchases, quite similar to the scheme offered by credit cards.

Prepaid cards are an asset of utility for all age groups. Parents can gift prepaid cards to their kids and load their monthly pocket money in it. Adults can use it for carrying out a plethora of transactions such as paying bills, buying grocery, daily utility stuff and much more. These can also be used as gift vouchers by companies for rewarding their employees.