A prepaid card works only up to the amount you have loaded. You top it up with cash or a transfer, then spend at merchants that accept the card brand. It is not a loan facility and usually does not check a credit file the way a credit card does.
Key takeaways
- Spending stops when the loaded balance runs out, which can help with budgeting.
- Fees may apply for issue, reload, ATM use, or inactivity, so read the schedule.
- Some prepaid cards are closed-loop (one merchant or network only); others ride major card schemes.
- Lost-card rules and refund rights depend on the issuer and product type.