There are two types of prepaid payment cards that can potentially be used to pay bills. Prepaid debit cards come in a few different forms and offer the opportunity for a convenient money storage account that can take the place of complex checking. Prepaid secured cards are a type of hybrid credit offering that can come with some possible credit allowance extensions as well as the benefit of ease of use.

Before diving into bill payments, it can be good to understand the two types of prepaid payment card options a little better. Prepaid debit cards can encompass gift cards and any electronic payment card that is loaded with funds considered deposit assets rather than credit liabilities. As the market for prepaid debit expands, more and more consumers are gaining access to a simplified electronic money storage solutions that can take the place of traditional bank checking. In the prepaid secured credit card category, cardholders pay a prepaid amount that serves as self-funding for a quasi-credit account that requires repayment over time. Some prepaid secured credit cards will match the cardholder’s deposit which helps to increase the limit for allowable use. Prepaid secured credit cards act just like a standard credit card when it comes to credit reporting. This means the card issuer sends a monthly statement with a required payment each month and reports that activity to the credit bureaus. Credit reporting is one of the major differences between prepaid debit and prepaid secured credit.

Key Takeaways

  • There are two main types of prepaid cards: prepaid debit and prepaid secured credit.
  • Prepaid card acceptance typically depends on the card processor brand.
  • Some prepaid card accounts may have special services for making one-time or recurring bill payments through an account.

Card Processor Branding

Essentially the most important thing to take note of when seeking to make any bill payment with a prepaid card of any kind is the card’s processor. All electronic payment cards partner with one of the four major payment card processors: Visa, MasterCard, Discover, or American Express. Generally, the card processor will dictate whether or not an electronic payment card is accepted by a company for a bill payment.

Beyond that, most prepaid cards will work in the same manner that any regular payment card will. If the card’s processor is accepted, payments may be made on a website, on the telephone with representatives, or by filling out a form included with a paper bill in the mail and returning it through the postal service. Transactional fees are usually not necessary although some companies may charge for payments over the phone or express payments.

Accessing and Using a Prepaid Debit Card

Many prepaid debit cards can be bought in a retail store like Walmart, Target, or Walgreens. The process for buying them is similar to a gift card. The deposit amount may be specified or flexible based on the amount a buyer is seeking. Other prepaid debit cards may be easily obtained over the internet. All types of prepaid debit cards will come with an online account that can be easily accessed for account viewing and maintenance. When you first obtain the card, you will need to register, activate it, and peruse your online account options if you so choose. Online you will have the chance to view account balances, holds, transaction history, and registration information. Depending on the cards options you may also be able to make card-to-card transfers as well as setup some one-time and/or automated recurring payments.

One of the benefits of a prepaid credit card is that it offers some consumer protection in the event the card is lost or stolen since it isn’t tied to a personal checking account. Cardholders can simply call customer service if there is a problem. Oftentimes, prepaid debit cardholders can also add money to the card via a website or retail store chain which can be simpler than making deposits at a bank.

Accessing and Using Prepaid Secured Cards

Prepaid secured cards follow similar procedures to a standard credit card. They will usually need an online application for approval. Most prepaid secured credit cards do not require lengthy credit history or any specifications for credit scoring. These cards are usually part of a strategy for accessing funds as well as improving a cardholder’s credit score. The better a cardholder’s credit profile is, the better the terms and potential credit line offers they may get.

Special Card Features

All prepaid cards come with their own terms and special provisions as decided on by the card issuer. Some prepaid card providers may offer special opportunities to make bill payments from a cardholder’s account through the issuer’s website. Cards can also come with some special features that make it more convenient to transfer funds.

The Western Union NetSpend Prepaid MasterCard, for example, maintains a site where cardholders can easily make bill payments. Some additional fees may be required.

Many prepaid cards offered by MasterCard and Visa allow for card-to-card transfers for cards of the same network brand. For example, a MyVanilla Prepaid Visa Card allows cardholders to transfer funds to other MyVanilla Prepaid Visa Cards, and for no fee. Most prepaid cards do not allow transfers between cards of different brands, however, or between prepaid cards and regular credit cards, even if they are from the same network.

Cards such as the Western Union NetSpend Prepaid MasterCard allow users to send and receive Western Union money transfers using their cards. There is generally no fee for receiving Western Union money transfers. There are, however, varying fees for sending Western Union money transfers.