Types of prepaid cards Gift Cards
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Offered by retailers for purchases at their stores (e.g. iTunes, Starbucks or Barnes & Noble). Other examples include phone cards or health / benefit cards
Cards purchased at retailers for general use (“Instant issue, non-reloadable cards”)
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Can be bought at many types of stores (e.g. corner store, supermarket, check casher)
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You can use these cards anywhere that a bank-issued debit card is accepted by entering a Personal Identification Number (PIN) when you pay.
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You can use these cards anywhere that a bank-issued debit card is accepted by entering a Personal Identification Number (PIN) when you pay.
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If lost or stolen, the money on the card is generally lost to you. Also, some cards stop working after you have drawn down the total.
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Fees will vary and may occur each time you do a transaction and for each reload.
Reloadable, general purpose prepaid cards
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These cards are designed for longer-term use
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Generally track your transaction information and provide you with statements or access to information on your account. This is important if you want to dispute a charge or track if there has been fraud on your account or if the card is lost or stolen.
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Generally are FDIC insured. This means that if the issue of the card has financial troubles you can get your money back.
Payroll cards and electronic benefit cards
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Cards offered by an employer or the government. These cards are a substitute for a paper check and are often safer than paper checks.
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Can use the card anywhere you can cash a paper check (e.g. corner store, supermarket, check casher)
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The employer or the government can put more money on the card. The card holder can sometimes add money to the card as well.
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Despite the advantages over paper checks, there are fees associated with these cards. Make sure you understand these fees before you start using these cards.
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By July 2007 it is expected that all payroll cards allow you to get information on your account activity. This will help you to track how your money is being spent, it also helps identify fraud or misuse of your card.
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If you receive public benefits, these cards also allow you to pay for purchases the same way you would without government assistance.
Signature-based prepaid cards:
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A prepaid card you can use anywhere you might use a credit card (e.g. restaurants, movie theaters, clothing stores, drugstores, supermarkets, etc)
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Has the logo of one of the major credit card companies like MasterCard, Visa, or Discover.
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Most of these cards will allow you to reload the card.
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Like the other prepaid cards, it can be connected to a bank account, and in some cases may allow you to have your payroll check directly deposited into the account.
The following table summarizes the different types of cards:
| Type of Card | Where to get it? | What you need to know | | Gift Cards | Retail stores (e.g. Starbucks, Barnes & Noble, iTunes, etc.) | - Only works at a single retailer
- No up-front fees
- May be fees if card is not used
| | General use cards | Store, check-casher, bank. | - You purchase a card and receive a PIN.
- Use the card anywhere an ATM\debit card is accepted.
- Fees may apply at time of purchase and\or for each transaction.
| | Payroll Cards / Electronic benefit cards | Employer or government | - Your employer (or government) loads your paycheck (or benefits) onto a card.
- Use card anywhere an ATM\debit card is accepted.
- Fees may be charged when you get your card, on a monthly basis or for each transaction.
| | Signature Cards | Employer, retail stores, check-cashers. | - You receive a card with a logo (e.g. MasterCard)
- Use wherever credit cards are accepted with a signature
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Budgeting & Money
