Prepaid Credit Card

Before you can use your prepaid card, you will have to load money to your account, similar to how you do with a gift card. Also, you can only spend as much as you have loaded onto your card. As you start spending using your prepaid card, the amount of purchases is deducted from the balance.

For example, you deposit Rs.20,000 onto your card and you decide to spend Rs.12,000 on online shopping. Now your remaining balance is Rs.8000. Once you have used the entire balance that you have loaded (ie. Rs,20,000), you have to reload more money onto the card before you can use it again.

Below mentioned are some of the differences between a prepaid card and debit card-

Prepaid Card	Debit Card
A prepaid card is linked to a bank account	A debit card is linked to a bank account
Limits you to the amount you have previously loaded	Allows you to spend the sum you have on the associated bank account
Prepaid card can be linked to a specific business brand	Debit Card can be used in any store or place of business that accepts Visa or Mastercard
Upon spending the amount on your card, you can simply reload it with cash / cheque	Can be used for as long as you maintain the bank account your card is associated with

Below listed are the different varieties of prepaid credit cards available-

1. Open looped cards- These are generally branded with the network (American Express, Visa or MasterCard) they are affiliated with and are also known as open system cards. They are accepted at locations and merchant outlets approved banks.
2. Closed looped cards- Mostly gift cards are issued as closed-loop cards. Their acceptance is limited to the affiliated merchant outlet for buying goods and services at those outlets only.
3. Semi-open looped cards- These are accepted by many merchant outlets or chains, who are affiliated with the card. These are majorly issued by retail chains or shopping centres.
4. Reloadable card- Majority of prepaid cards come as reloadable cards, where you have the option to add funds once the preloaded amount has been used.
5. Non-reloadable card- There are such cards where once you spend the available money in the card, reloading cannot be done. You can only make purchases up to the available money in the card.

Bank	Prepaid Card Variants	Key Features
SBI	● State Bank Gift Card ● State Bank EZ Pay Card ● State Bank Foreign Travel Card ● State Bank Achiever Card ● SBI NMRC City1 Card ● Nagpur Metro Maha Card	★ Gifting convenience ★ Safe and hassle-free foreign travel ★ Easy periodic payments
HDFC	● Millennia Prepaid Card ● GiftPlus Card ● EGiftPlus Card ● FoodPlus Prepaid Card ● MoneyPlus Card ● Apollo Medical Benefit Card ● FASTag – Hassle-Free Toll Payment ● HDFC Bank DigiThane Card ● FleetXpress ● Corporate Expense Management Solution ● GPR Card ● Reward Card ● MoneyPlus Retail GPR Card ● MoneyPlus Dependant GPR Card ● MoneyPlus Benefit Card ● MoneyPlus Petro Card ● MoneyPlus PettyCash Card	★ Cashback and rewards ★ Wider acceptance for online usage ★ Discounts on preferred categories ★ Access to funds anytime and from anywhere
ICICI Bank	● Expressions Gift Card ● PayDirect Card ● Pockets, the Digital bank ● Multi Wallet Card ● Gift Card ● Meal Card ● Reimbursement Card	★ Gifting convenience ★ Offers a payroll solution ★ Instant and convenient to use
Axis Bank	● Meal Card ● Gift Card ● Smart Pay Card	★ Gifting convenience ★ Global acceptance ★ Available for instant purchase
Yes Bank	● Yes Bank Corporate Gift Card ● Yes Bank Payroll Card	★ Gifting convenience ★ Secured transactions
Bank of Baroda	● Baroda Gift Card ● Baroda TravelEasy Card ● Reloadable Card	★ Gifting convenience ★ Hassle-free travel ★ Activation within 24 hours

Note: For more information about your preferred prepaid card, kindly visit the bank’s official website. It is advisable to opt for the one that best suits your requirements.

Following are some of the advantages of having a prepaid credit card-

• The prepaid card helps you to adhere to the spending limit as per your budget
• No employment verification is asked for card issuance
• The card is easy to procure if you are not looking for any other credit card
• You cannot get into debt as it offers no credit facility
• Some banks also allow you to withdraw cash using the card
• Can be used to pay utility bills
• Can also be used to distribute salaries to the employees
• Can also function as a gift card or travel card

With the majority of prepaid cards, you will have to pay some fees for holding the card. The fee type and amount may vary depending upon the type of card chosen. Following is the list of types of fees that prepaid cards may charge.

It is to be noted that not all prepaid cards charge the same fee or offer the same services.

Common Fees for Prepaid Cards
Fee Type	Description
Issuance Fee	It is the fees that is charged at the time of card issuance
Annual Fee	Fixed fee you pay every year even if you don’t use the card
Loading Fee	Fee levied on adding money to your card
Transaction Fee	Fee levied every time you use the card for a transaction
Card-to-card transfer Fee	Fee levied when you transfer money between 2 prepaid cards
Card Replacement Fee	Fee levied on card replacement if it is lost, stolen or damaged

Some of the limitations of prepaid credit cards are listed below-

1. You cannot use this card unless you load money onto it.
2. The card does not fulfil all safety obligations and hence can be misused in case of loss or theft.
3. Since there’s no revolving credit limit involved, the banks do not report your payment history to the three major credit bureaus.
4. They do not contribute to affecting your credit score.
5. Consumer protection terms for these cards are not very clear.

How do I get a prepaid card?

You can buy prepaid cards at retail locations (such as grocery stores and drug stores), online, over the phone, or from some banks.

Do prepaid cards have fees?

A prepaid card may have several fees, including a fee to purchase the card and activate the account. Other fees can include monthly fees, reload fees, ATM withdrawal fees, and foreign transaction fees.

Can you take cash out of a prepaid card?

Yes, some banks allow you to take cash out of the prepaid card. However, you may be levied a cash withdrawal fee for the same.

Do hotels accept prepaid credit cards?

Yes, you can use a prepaid credit card to make a hotel reservation. However, you will need an available balance above and beyond the room & tax charges.

Does a prepaid credit card build credit?

With a prepaid card, you aren’t borrowing any money. Prepaid credit cards don’t have a credit line attached to them, and they aren’t reported to the credit reporting agencies, so they won’t help in improving your credit scores.