Smart Money Training Program

Topic 6.3: Prepaid Cards

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We will discuss how prepaid cards work, common features of prepaid cards, and how to use them effectively. 

How Prepaid Cards Work

A prepaid card is different from a debit card. A prepaid card is not linked to an account at a financial institution. Instead, you are using money that is loaded onto the prepaid card in advance.

Kinds of Prepaid Cards

• Reloadable prepaid cards

• Payroll cards

• Electronic benefit transfer (EBT) cards

• College or university identification cards

• Prepaid cards for specific stores or public transportation systems

Lost or Stolen Prepaid Cards

If your card is lost or stolen, or you notice a charge on your statement you did not make, report the problem right away to the card issuer. That can help you avoid further losses.

Tips for Using Prepaid Cards

Consider these tips for using prepaid cards and mobile apps:

• Review your account and dispute charges you did not authorize.

• Understand your card’s limits on reloading funds, purchases, and withdrawals.

• Know what fees will be charged and what you may be able to do to avoid them.

• Report loss or theft immediately.

• Stay safe online. Visit OnGuardOnline.gov.

Remember the Key Takeaways:

• Prepaid cards allow you to spend or access money loaded onto them. They usually aren’t linked to a bank account.  

• Before you use one, review its features and fees.