Prepaid Credit Card

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

Prepaid Credit Card vs Debit Card