What is the difference between a debit card and a prepaid debit card?
Answer: A debit card is linked to your checking account, while a prepaid debit card you pay in advance to load funds onto the card. A prepaid debit card can be very different from a bank account debit card, in the way you load and spend funds, the fees for using and having the card, and the consumer protections that apply to each type of card.
Even though it’s called a debit card, a prepaid debit card is very different from a bank account debit card. A bank account debit card is linked to your checking account; a prepaid debit card is not. Instead, you pay in advance to load funds onto a prepaid card, and then use the money you have loaded onto the card.
In most cases, you can’t spend more money than you have already loaded onto your prepaid debit card, but with bank account debit cards, if you opt into your bank’s overdraft service, the bank may cover the cost of a purchase that exceeds what you have in your account, and charge you a fee (as well as requiring you to repay the overdraft.)
In addition, prepaid debit cards may carry fewer consumer protections in the event of loss or a disputed charge than debit cards.