Prepaid cards issued by banks and other government-regulated organizations are a new way for consumers to make payments and conduct other financial transactions. There are plenty of situations where a prepaid card might be the most convenient choice, but be sure you understand the key terms and conditions before you buy.
Many cards carry protections similar to credit and debit cards. To obtain these benefits, you must follow the instructions for registering and activating your card. Be sure to record your card information, including the customer service telephone number on the back of the card, so you can get a replacement if yours is lost or stolen.
If you have a problem with a prepaid card, first contact the customer service number. If the problem still isn't resolved, you may want to file a complaint with the proper authorities:
Payroll and general purpose spending cards can be very useful for those who want to budget their money and for those who don't have a checking account or credit card.
General purpose spending cards, which may be purchased by consumers, typically charge a monthly maintenance fee and could charge additional fees for adding funds to the card and/or making purchases or getting cash.
Payroll cards are similar to general purpose spending cards except that they are provided by employers in place of paychecks. Payroll cards typically allow a certain number of ATM withdrawals without charge to the cardholder and usually do not assess fees for purchases.
Under the Credit Card Accountability Responsibility and Disclosure Act of 2009, gift cards and other similar cards cannot expire within five years from the date they were activated unless the expiration date is clearly disclosed. The law also prohibits an inactivity fee on gift cards except in certain circumstances, such as if there has been no transaction for at least 12 months.
Page Last Reviewed or Updated: October 12, 2012
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