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What are Prepaid Credit Cards?

A prepaid credit card is a type of credit card that comes with preloaded funds for making transactions. Unlike a normal credit card that functions on a credit card limit issued by the bank, a prepaid card allows customers to make purchases using the funds that are pre-loaded into the card. The card can be used to make all the transactions which you can do with your regular credit card. The biggest advantage of a prepaid card is that customers can make purchases without incurring any debtf or paying huge interest as all the spends have to be within the limit of the available funds.

Benefits of Prepaid Credit Cards

  • A prepaid card can be used just like a regular credit card for shopping, bill payment, and more, thus eliminating the need to carry excess cash

  • Some prepaid CC types can be used to make ATM cash withdrawals in case of any financial emergency

  • Cardholders need not worry about incurring debt or high interest on transactions as the purchase has to be made within the available funds

  • The approval process to get a prepaid credit card online is comparatively faster than that for a regular credit card as factors such as credit score or stable monthly income are not that important when considering the eligibility for this card type

  • A prepaid CC can also be given as a gift card to your family members or employees

  • In case employees don't own a bank account, employers can distribute their salary via a prepaid credit card online

  • The card is also ideal for travelling abroad as you can load up the currency and use it for transactions

Types of Prepaid Credit Cards

  • Open-Looped Cards

Also referred to as open-system cards, these types of prepaid virtual credit cards are branded with the network that they’re affiliated to, namely Visa, MasterCard, or Amex. The respective card will carry the logo of the affiliate brand and is usually accepted across all merchant stores.

  • Closed-Loop Cards

Unlike an open-looped prepaid card, the acceptance of a closed-loop credit card is restricted to the affiliated merchant outlets only. This means that you can buy goods and avail services only at that merchant’s outlets with this credit card type. Most gift cards are closed-loop cards.

  • Semi-Open Looped Cards

These are hybrid prepaid cards with features of both open- and close-loop card types. A semi-open looped card is accepted by a variety of chains or merchant outlets that are affiliated with the card’s brand or carry stores of the respective brands.

  • Reloadable cards

Reloadable prepaid cards are those prepaid cards in which the cardholder can reload funds once the original fund limit is exhausted.

  • Non-Reloadable cards

Non-reloadable gift cards are those prepaid cards wherein you cannot reload funds once the original fund limit is exhausted. Generally, gift cards fall under the non-reloadable prepaid card category.

List Of Top Prepaid Credit Cards From Different Banks

SBI Prepaid Card

State Bank Gift Card

State Bank EZ Pay Card

State Bank Foreign Travel Card

State Bank Achiever Card

Axis Bank

Axis Meal Card

Axis Bank Gift Card

Axis Bank Smart Pay Card

ICICI Bank

ICICI Expression Gift Card

ICICI Meal Card

ICICI PayDirect Card

ICICI Gift Card

HDFC Bank

Millennia Prepaid Card

GiftPlus Card

FoodPlus Prepaid Card

Apollo Medical Benefit Card

MoneyPlus Card

Kotak Bank

Kotak NETC FASTag Card

Kotak Konnect

Kotak Gift Card

Kotak Netc@rd

 

Prepaid Credit Card vs Debit Card

Prepaid Credit Card

Debit Card

Funds have to be preloaded in the credit card

Funds are directly debited from the bank account

You need not have a bank account to use a prepaid card

Debit card requires a bank account associated with it

Limit restricted to the remaining funds available after purchases

Limit restricted to available funds present in the bank account

You can easily reload a prepaid credit card online or with cash or cheque and use it for making transactions

A debit card can be used for as long as you have funds in your bank account

About Credit Cards

Credit Cards & Related to Credit Cards

Resource Centre

FAQs on Prepaid Credit Cards

✔️Is a prepaid card a credit card?

A prepaid card is a type of credit card in which funds are directly added to the card. The credit limit of a prepaid card is restricted to the amount of funds added to it. On the other hand, a regular credit works on credit borrowed from the bank or the financial institute issuing the card. However, a prepaid card can be used to make transactions just like a regular credit card.

✔️Is prepaid card a debit card?

No. Prepaid cards and debit cards are two different card types. While a debit card directly debits the money from your account, for using the prepaid CC, the funds need to be pre-loaded in the card.

✔️What are the benefits of a prepaid credit card?

Prepaid cards offer benefits like ease of transaction, eliminating the need to carry cash, easy payment of monthly bills, and better expense management, among other things.

✔️Is a prepaid credit card a good idea?

Applying for a prepaid credit card online is a good idea if you do not have a bank account or want to give gift cards to your employees or family members. The card does not affect your credit score and since the limit is restricted to the available funds loaded into the card, you need not worry about incurring heavy interest or debt on your transactions.