Prepaid Mastercard - How Does It Work?
A Prepaid MasterCard is a card that is similar to a debit card, and can be obtained for a person's own use, or given as a gift to a friend or family member. The cards are issued by a huge number of banks and travel offices around the USA, and can be bought at a variety of locations or ordered through various websites.
There are three categories of cards: General purpose cards, gift cards and travel cards. Although the names are different, the uses are almost the same. They are bought with an initial balance attached to them, and can then be used to purchase goods and services, in much the same way as a standard debit card.
The cards are safer than carrying around large amounts of money, as they are backed up by a Zero Liability policy. This means that if your card is lost or stolen and gets into the wrong hands, you will not be held responsible for unauthorized purchases made using your card. It is a good idea to write down your card number, just in case this does happen, as it will make the reporting and replacement process considerably easier.
A Prepaid MasterCard also makes the ideal gift, as it is a lot more flexible than a gift certificate - it can be used at any location that carries the Debit MasterCard logo, and not just certain shops. This covers millions of locations around the globe, as well as online merchants.
In order to use the card, the bearer must first activate it, and then sign a receipt to authorize every purchase that they make. If a cardholder wishes to pay for an item that is of higher value than their prepaid MasterCard balance, they can elect to split the tender between their card and a separate amount of cash (vendor permitting).
The prepaid MasterCard can then be used until the balance runs out or the card expires. After this it can be discarded, or reloaded by visiting the issuer's location or website, by adding money at a participating outlet - such as Western Union, or by calling a toll-free number on the back of the card.
These cards are particularly useful for individuals that are unable to get a regular credit or debit card, as they assist with everyday tasks. As you can only spend what you have on the card, they also promote good financial practices - ideal for those that struggle to manage their finances or for young adults who are new to the world of credit. The cards also make great presents.
On the downside, the cards can only be used with merchants that accept Debit MasterCard. Reload fees are sometimes charged when topping up the balance, there is also an upfront fee to purchase a prepaid MasterCard, and sometimes ATM cash withdrawal fees apply. These all vary depending on the provider, so it makes sense to read the small print before you make your application.
There are three categories of cards: General purpose cards, gift cards and travel cards. Although the names are different, the uses are almost the same. They are bought with an initial balance attached to them, and can then be used to purchase goods and services, in much the same way as a standard debit card.
The cards are safer than carrying around large amounts of money, as they are backed up by a Zero Liability policy. This means that if your card is lost or stolen and gets into the wrong hands, you will not be held responsible for unauthorized purchases made using your card. It is a good idea to write down your card number, just in case this does happen, as it will make the reporting and replacement process considerably easier.
A Prepaid MasterCard also makes the ideal gift, as it is a lot more flexible than a gift certificate - it can be used at any location that carries the Debit MasterCard logo, and not just certain shops. This covers millions of locations around the globe, as well as online merchants.
In order to use the card, the bearer must first activate it, and then sign a receipt to authorize every purchase that they make. If a cardholder wishes to pay for an item that is of higher value than their prepaid MasterCard balance, they can elect to split the tender between their card and a separate amount of cash (vendor permitting).
The prepaid MasterCard can then be used until the balance runs out or the card expires. After this it can be discarded, or reloaded by visiting the issuer's location or website, by adding money at a participating outlet - such as Western Union, or by calling a toll-free number on the back of the card.
These cards are particularly useful for individuals that are unable to get a regular credit or debit card, as they assist with everyday tasks. As you can only spend what you have on the card, they also promote good financial practices - ideal for those that struggle to manage their finances or for young adults who are new to the world of credit. The cards also make great presents.
On the downside, the cards can only be used with merchants that accept Debit MasterCard. Reload fees are sometimes charged when topping up the balance, there is also an upfront fee to purchase a prepaid MasterCard, and sometimes ATM cash withdrawal fees apply. These all vary depending on the provider, so it makes sense to read the small print before you make your application.
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