![]() Be sure to read over the terms and conditions of your prepaid credit card for more information about protections for your card. This could offer some protections in cases of lost or stolen prepaid cards. There could be associated fees with reloading and using the card with funds, so be sure to check out the terms of the card before you commit to one.įunds on a prepaid card may be covered under the Electronic Fund Transfer Act (EFTA), known commonly as the Prepaid Rule. They can be accepted at many major retailers and can eliminate the need to carry cash. Prepaid cards can be loaded with funds through direct deposits or purchased at retailers. In other words, you are not borrowing money. When you make a purchase with a prepaid card, you are using your own funds that you deposited onto the card rather than a credit limit or deduction from your bank account. Known as general purpose reloadable cards (GPRs), prepaid cards work similarly to gift cards and likewise have no bearing on your credit score.Īlthough they can be used to pay for services, online purchases, pay bills, and to withdraw cash from ATMs, prepaid cards do not come with a credit limit the way credit cards do. Unlike traditional credit cards, activity from a prepaid card is not reported to the three credit reporting agencies (Experian ®, TransUnion ®, and Equifax ®) and will not help in establishing or maintaining your credit score. Prepaid cards are not the same as credit cards.
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