What Are Prepaid Cards

Network branded prepaid cards are relatively new, but incredibly useful financial tools for millions of Americans. Network branded prepaid cards provide consumers, businesses and governments with the efficiency, security and flexibility of digital payments through a non-credit payment option. Most network branded prepaid cards benefit from broad acceptance, as they can be used anywhere the card brand (Amex, Discover, MasterCard, Visa) credit/debit card is accepted and they provide the end user security against fraud and theft.

While these cards work like traditional debit/credit cards and offer many of the same fraud and loss protections, they access funds pre-paid for the cardholder that have been loaded by another consumer (as a gift), by government for benefits, and by employers for payroll, rewards/incentives, or health benefits. As a non-credit payment tool, they help the users control their budget.

Today, millions of Americans use network branded prepaid cards for the choice and protection they provide, including the estimated 40 million un-banked or underbanked who would not otherwise have a way to participate in our card-based economy, parents of college-aged students who want a safe and secure way to give money without the risk of running up debt, and recipients of government benefits who need an efficient way to receive their child support payments, food stamps or unemployment payments.

How Prepaid Cards Work

  • For the consumer, the cards work like traditional debit/credit cards.
  • A consumer can take a prepaid card to their favorite store or online retailer and use it just like they would a regular credit or debit card. They can also use the card to pay bills, book airline tickets, rent a car, buy dinner, etc.
  • Many cards allow consumers to take cash out at ATMs.
  • The cards offer the same fraud and loss protections as any credit or debit card, but with one big difference: the funds on the card are pre-paid (by the consumer, business or government on their behalf).
  • Prepaid cards help the consumer control their budget and avoid interest charges, running up debt and overdraft fees.