Question:
I tried to use a $25 Visa gift card at Amazon for a $12 purchase and the charge was denied even though the total with taxes and shipping was well under the gift card amount. Can prepaid cards not be used online?
Answer:
Branded prepaid cards are excellent tools for payment online, particularly when you find a great deal! Online merchants use a series of steps to reduce fraud. One of those steps is an address verification service. If you did not register your gift card with the issuer (bank), then the merchant is unable to match the address associated with the card to your shipping address and the transaction may automatically be denied. Check the back of your card and follow the steps to register your prepaid card and then try your purchase again. Or, you might be able to call customer service for the online merchant and they can override the verification process.
Question:
I get my benefits on a prepaid card instead of a check and I just got charged for an ATM withdrawal. How do I get my money off the card without paying fees?
Answer:
Prepaid cards are a great new way to receive government benefits versus the cost, hassles and potential fraud involved with checks. Each State government benefits program is unique, so it’s worth the time to view the literature that came with the card or on the State’s website to get further information. But, in general, the following terms apply to most government programs:
- You get free point of sale transactions anywhere your card brand is accepted
- You can get cash back at the point of sale for free
- You get free ATM withdrawals at ATMs in the network – Chase, US Bank, etc. depending on which bank issues your card
- You may be able to go to a teller and get one cash-advance per month so you can take all your money off the card, down to the penny, if you choose.
Question:
I recently redeemed a rebate and I received my payout on a prepaid card instead of a check. Why?
Answer:
Prepaid rebate cards have grown in popularity because they give consumers more choice and flexibility in how they access their rebate payout. Here’s how:
• The cards are branded by American Express, Discover, MasterCard or Visa so the funds can be used anywhere to buy groceries, gas, textbooks, doctors office co-pays, even online – anything you would normally purchase with cash or a debit card.
• The cards come activated (or can be with a simple process) so you can use them right away.
• You can avoid a trip to the bank or check casher, and save the fees associated with cashing the check at those locations.
• Many programs now offer the option to cash out with a bank teller. Some cards even include ATM access.
• Unlike rebate checks that expire in 3 or 4 months, rebate cards do not expire for at least twelve months.
Question:
Is having a prepaid card cheaper than having a bank account?
Answer:
Prepaid cards can be a good alternative to a bank account for a growing number of people.
A recent study by Bretton Woods showed that an average consumer could spend as little as $76 per year using a prepaid card (and even less with direct deposit) versus $218 to use a bank account for the same services and average balance.
Consumers can often avoid fees by using direct deposit and fee-free cash options like in-network ATMs, surcharge-free ATMs and cash back at the point-of-sale. Consumers appreciate that many cards offer free texting of your balance and transactions, online or phone balance inquiry, free cash back with purchase, free purchases and free electronic bill pay.
Question:
I heard that prepaid cards are unregulated and I would be safer carrying a debit or credit card. Is this true?
Answer:
All network branded prepaid cards are issued by highly regulated financial institutions and are subject to examination, review and oversight by federal agencies such as the Federal Reserve Board, the United States Treasury, the Office of Thrift Supervision and/or the Office of the Comptroller of the Currency. They are processed through an online system that tracks and records every use: both the cardholder purchase and the merchant where the purchase is taking place.
Network branded prepaid cards are subject to the same zero liability protection offered by the brand mark on the card (American Express, Discover, MasterCard or Visa). If a prepaid card is lost, stolen or used for purchases without authorization, report it to the customer service number immediately and the card may be reissued and the funds replaced.