Prepaid credit cards may be used to both pay bills – either as a one-time transaction or recurring transaction – and transfer money to other cards of the same brand.
Some prepaid credit card bill payments are made in the same manner as regular credit cards. Payments may be made on a utility's website, on the telephone with representatives of the utility, or by filling out a form included with a paper bill in the mail and returning it to the utility. There is usually no fee for transactions such as this.
Other prepaid credit card bill payments may be made through the prepaid credit card issuer's website. The Western Union NetSpend Prepaid MasterCard, for example, maintains a site where cardholders may make bill payments. There may be a fee for bill payments made through a prepaid credit card issuer's website.
Many prepaid credit cards offered by MasterCard and Visa allow for card-to-card transfers for cards of the same brand. For example, a MyVanilla Prepaid Visa Card allows cardholders to transfer funds to other MyVanilla Prepaid Visa Cards. Most prepaid cards do not allow transfers between cards of different brands or between prepaid cards and regular credit cards. Many prepaid credit cards, such as the MyVanilla Prepaid Visa Card, allow for free transfers.
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, fees for sending Western Union money transfers; these fees vary and are determined at the time the transfer is sent.
Using a Prepaid Credit Card
When a prepaid credit card is first obtained it is necessary to register the card, activate it and load funds onto it. Some cards come with preloaded amounts, so all that is required is to register and activate the card. Cards also need to be registered with a username and password to allow access to online account services that enable cardholders to make card-to-card transfers and online payments with retailers or utilities, as well as to view account balances, holds, transaction history and registration information. One of the benefits of a prepaid credit card is that it offers the consumer protection in the event the card is lost or stolen (cards that are not registered in the cardholder's name are difficult if not impossible to replace).
Often, cardholders can add money to the card via the website as well.
Online payment processors perform security checks to match customer information with the information registered on the card. By disallowing transactions in which customers can't correctly input matching information, facilitators have been able to dramatically reduce instances of stolen credit cards used for fraudulent purposes.