A:

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.

RELATED FAQS
  1. What transactions cannot be made using prepaid credit cards?

    Find out about the transactions that are restricted when you use a prepaid credit card, and find out about other ways to ... Read Answer >>
  2. What are the pros and cons of gift cards?

    Examine the pros and cons of physical and digital gift cards. Learn about protection in case of loss, monitoring spending ... Read Answer >>
  3. What are some examples of common credit card reward program benefits?

    Learn about different benefits available to credit card holders including cash back, air travel miles, introductory rates, ... Read Answer >>
Related Articles
  1. Personal Finance

    8 Ways to Avoid Getting Burned by Prepaid Debit Cards

    These cards have many differences from traditional debit and credit cards that can cost you money if you don’t know what to watch out for.
  2. Personal Finance

    3 New Types Of Credit Cards To Look For

    These three types of credit cards are becoming popular with customers looking to pay less fees and build up their credit scores.
  3. Personal Finance

    Univision MasterCard Prepaid Card: What You Need to Know (MGI, WU)

    The Univision MasterCard prepaid card markets itself as a safe alternative to cash, but competing cards may offer better value for consumers.
  4. Personal Finance

    10 Considerations For Using Your Credit Card Abroad

    Credit cards can be the best item you pack when traveling, just make sure that you are taking the right card that suits your needs.
  5. Personal Finance

    Purchases You Should Always Make With A Credit Card

    Credit cards aren't always bad possessions to have. There are certain perks associated with using credit cards as we make routine or irregular purchases.
  6. Personal Finance

    5 New Ways Credit Card Companies Are Wooing New Card Holders

    With new laws, credit card companies are forced to get creative to attract new customers.
  7. Small Business

    How to Use Small Business Credit Cards

    A small business credit card can be a convenient way to increase your company's purchasing power, but must be carefully managed.
  8. Personal Finance

    Best Credit Cards For 2015

    The best credit card for you depends on your financial goals. Our choices for the best cards in 4 different categories.
RELATED TERMS
  1. Cash Card

    A cash card is any electronic payment card that stores cash for ...
  2. Credit Card Balance

    Credit card balance is the amount of charges, or lack thereof, ...
  3. Debit Card

    A debit is a payment card that deducts money directly from a ...
  4. Card Recovery Bulletin

    A card recovery bulletin is published by credit card issuers ...
  5. Card Reader

    A credit card reader reads the the information on a credit or ...
  6. Purchase Rate

    The purchase rate is the interest rate applied to purchases made ...
Trading Center