Prepaid cards issued by banks and organizations are a new way for consumers to conduct financial transactions and make payments. There are many situations where a prepaid card might be the most convenient choice, but be sure you understand the key terms and conditions before you apply online for a prepaid card.
Find the answers to these two questions when considering a prepaid card:
1) What are the possible fees associated with using the card?
2) Can the prepaid card be used like a credit card? (online, at ATMs, outside the U.S.)?
Reputable distributors of prepaid cards will give you the terms and conditions in writing or have them available on their website. If you don’t understand how your card works, ask for help by contacting the customer service number on the card.
Prepaid Card Protections
The federal government does not guarantee the same protections for all prepaid cards, but many “branded” cards voluntarily carry the same protections as credit and debit cards. Prepaid credit cards with a major credit card brand logo like Visa or MasterCard provide consumer protections, such as replacing lost or stolen cards and refunding money after unauthorized use of the card. To get these benefits, you have to be sure to follow the directions for activating and registering your new card. Be sure to record the customer service telephone number that is on the back of the card in a safe place in case your card is lost or stolen.
If you have a problem with your prepaid card contact the customer service via the number on the back of the card. If the problem still isn’t resolved, you may want to file a complaint with the proper authorities:
For cards issued by national banks, contact the Comptroller of the Currency.
For cards issued by retailers, contact the FTC. You may also file a complaint with your local consumer protection office.
