Prepaid cards key terms
Additional card fee
Some prepaid providers let you get an extra card for another person you designate as an “authorized user” of your card. That card lets someone else spend your money, so you want to think carefully about whether to add an authorized user to your prepaid account. You may have to pay a fee for the additional card.
Any new authorized users will have to register online or call customer service to verify their identity.
ATM balance inquiry fee
You may be charged a balance inquiry fee if you check your prepaid card balance at an ATM, or if you call customer service to ask about your balance. Not all prepaid cards charge the same fees to check your balance. Most cards offer at least one free way to check your balance. For example, you might be able to check your balance online for free or request the balance information by email or text. Check your cardholder agreement to learn about the fees that apply to checking your balance. You may be able to avoid fees if you know how to check your balance for free.
Bill payment fee
Some prepaid cards let you sign up to pay your bills online through the card provider’s website. Your card provider may charge a fee each time you use the program to pay a bill.
If you plan to use your prepaid account to pay bills, compare these fees before you select a card. You may also want to consider whether there are less costly ways to pay your bills, such as paying them through the vendor directly.
Card cancellation fee
You can cancel a prepaid card at any time. You usually won’t pay a fee to cancel your card, but there may be a fee to get a check for the remaining balance on the card. To avoid the fee, you can spend or withdraw the remaining funds on your card before you cancel the card.
Card replacement fee
Your prepaid card provider may charge a fee to replace your card if it is lost, stolen or damaged.
Card-to-card transfer fee
You may be charged a fee if you transfer money between two prepaid cards. This is called a card-to-card or person-to-person transfer fee. However, some card providers allow you to transfer money between cards online without a fee.
Cash reload fee
A cash reload fee is a fee for adding money to your card at a retail location. Generally, the retail location will charge a fee for reloading cash. Most prepaid cards provide other options for loading money to your card, such as direct deposit, without a fee. Direct deposit may save you money.
Closed-loop prepaid card
A closed-loop prepaid card is a card you can only use at certain locations. For example, a closed loop card might be good only at a specific store or group of stores, or on your public transportation system. Most closed-loop cards do not have a network logo on them. Many gift cards are closed-loop cards.
A decline fee is a fee charged if you attempt to use your card for something that costs more than the amount of money you have left on your card. Many prepaid cards do not charge decline fees.
Flexible spending account (FSA) or health savings account (HAS) card
Flexible spending accounts (FSAs) and health savings accounts (HSAs) let you set aside pre-tax money, sometimes directly from your paycheck, to pay for eligible medical expenses. Guard this card carefully as you may not have the same rights to get your money back if it is stolen as you do with your bank or credit union debit card.
Foreign transaction fee
A foreign transaction fee is a fee your card provider charges when you use your prepaid card in a foreign country or to pay in a foreign currency. This fee is usually a percentage of your purchase, withdrawal, or other transaction, rather than a flat fee. This fee is also called a currency conversion fee. Not all cards can be used outside the United States, so check your cardholder agreement before you travel.
Government benefit card
A government benefit card is a prepaid card used by a government agency to pay certain government benefits, such as unemployment insurance.
An inactivity fee is a fee charged if you don’t use your card for a certain period of time. The length of time that triggers an inactivity fee varies. Not all prepaid cards charge inactivity fees.
In-network/out of network fees
Individual banks and ATMs belong to different networks. The bank that issues your prepaid card may belong to one or more of these networks. An ATM may be in-network or out-of-network depending on your particular card and which network the ATM belongs to. Depending on the terms of your cardholder agreement, you may pay less or even be able to avoid ATM fees by using your prepaid card at in-network ATMs.
A monthly fee is a fixed fee you pay each month. You pay this fee even if you don’t use your card. The fee is automatically deducted from your account balance. Some cards that charge a monthly fee may waive the fee under certain circumstances. For example, some prepaid cards waive the monthly fee if you have your pay or benefits directly deposited into your prepaid account.
Open-loop prepaid card
An open-loop prepaid card is a card with a network logo on it. Examples of networks are Visa, MasterCard, American Express, and Discover. These cards can be used at any location that accepts that card type. Most prepaid cards are open-loop cards. GPR prepaid cards, payroll cards, and some types of government benefit cards are open-loop, as are many other kinds of prepaid cards. Even some gift cards are open-loop.
Paper statement fee
Some prepaid cards charge a fee if you request paper statements for your prepaid card. You may be able to go online to get a statement, or at least a list of your recent card purchases and other transactions, without a fee. Under the CFPB’s prepaid rule, you have the right to get information about your account without a fee. The prepaid card provider has to give you, without a fee, balance information by phone, transaction history online, and if you request it, transaction history by mail. You may be charged a fee for a mailed transaction history in some cases, such as making requests per month or if you sign up to receive paper statements every month by mail.
A payroll card is a prepaid card you get from your employer that you receive your paycheck on.
Per purchase fee
A per purchase fee (or transaction fee) is a fee charged every time you use the card for certain types of transactions, such as purchases made in stores or online using the card. Your card provider might charge transaction fees under a “pay-as-you-go” plan. Some cards let you choose between a plan that charges transaction fees and one that charges a single monthly fee.
A prepaid card is a card that you use to access money that you load onto it in advance.
Reloadable prepaid card
A reloadable prepaid card allows you to add more money. This type of card is sometimes called a General Purpose Reloadable Card, or GPR Card. Some cards start out as non-reloadable, but can be reloaded once you complete a registration process. Some prepaid cards are “non-reloadable,” meaning you can’t add more money to them.
A reload pack is a product you can buy to add money to your prepaid card.
Text alert service
Some prepaid cards offer a text alert service to update you about account activity or changes to your account via text message.
A transaction fee (or per purchase fee) is a fee charged every time you use the card for certain types of transactions, such as purchases made in stores or online using the card. Your card provider might charge transaction fees under a “pay-as-you-go” plan. Some cards let you choose between a plan that charges transaction fees and one that charges a single monthly fee.