How to Use a Prepaid Credit Card

By Laurie Meekis

  • Overview

    Prepaid credit cards are an option for people who do not qualify for a regular credit card or for people who need a limit set on their spending. Prepaid credit cards also are a good way to use a credit card with a spending limit for places that you do not feel completely secure about giving out a credit card number to. They can only be used for the specified amount that is preloaded on the card.
    Credit cards
    • Step 1

      Read all the terms and conditions of any card you are interested in getting before you choose a prepaid card. Some have a fee for loading the card. Others come preloaded. They may also have a fee for each usage which can add up. That is one way the people selling the cards make money since they don't charge interest on a charged balance like regular credit cards do. The amounts of the fees vary from card to card. Read the small print. You don't want to run short on a purchase or charge because of the added service fees.
    • Step 2

      Check to see if the card is valid for use in areas outside of your local region or overseas. Some prepaid credit cards are only valid in specific areas. If you are planning on using the card to pay bills or online, make sure you find out if the place you are dealing with accepts prepaid cards as payment. Some do not. Check to see if the card you are interested in is re-loadable or a one use card.

    • Step 3

      Purchase a prepaid credit card from a local store or financial institution. Depending on the place you are getting the card from, you may either be required to load it with cash only or you may have the option of purchasing one with a check. Examine the rules about purchasing or loading the cards. Financial institutions, like Money Mart for example, take an application for a prepaid credit card which will have your name on it so others can't use it. The cards purchased in the stores are generic with no identifying name on the front, although you can sign the back of the card.
    • Step 4

      Pick up the card in person or get it in the mail if it comes from an institution that prints you name directly on the card. Make sure you sign the back of the card right away the same way you do with a regular credit card. Then use it like regular credit card.
    • Skill: Moderate
    • Tip: Get a receipt to keep for proof of deposit in case of any discrepancies in your balance that may occur when you use the card.
    • Warning:
    • Write down the card number and service phone number listed on the card. Put it somewhere besides your wallet. Treat it the same way you do a regular credit card, with care. Use it securely.

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