Frequently Asked Questions About Canadian Prepaid
Credit Cards
Canadian Prepaid Credit Cards looks like a normal
credit credit card, but works differently. You can use it
everywhere Visa/MasterCard are accepted, but you can only
spend up to the available balance on your card. A prepaid
credit card means you must load funds onto your Card
and use that money to make purchases and get cash. You are
not borrowing money from a bank or another financial institution.
A prepaid credit card can be used anywhere MasterCard/Visa
is accepted, including ATM's. The cardholder signs for purchases
and gets a receipt. Unlike a credit card, though, each purchase
is deducted from the pre-paid balance on the card.
You may use your prepaid credit card to
make purchases at over 21 million locations worldwide, get
cash back at ATMs nationwide, make online purchases, buy airline
tickets, make hotel or rental car reservations, pay for gasoline
at the pump and more!
The prepaid credit card looks like a credit
card - it has the Visa or MasterCard logo and hologram. It
allows the convenience of cashless purchases like a signature-based
credit card, with no PIN input required at the point-of-sale.
However, your card accesses pre-loaded money from an account
you fund with your funding source(s).
As a prepaid credit card, there is no "line
of credit" extended. This means that your spending limit
is determined by the amount of money that you have loaded
to the card. Best of all, because it's not a credit card,
there are no finance charges, no late fees, and no accumulation
of debt.
Safety! Carrying a piece of plastic with access to your
cash, versus carrying a fold of bills in your pocket, is pretty
straightforward. Losing the cash or leave it somewhere where
it is stolen, it is gone forever. If you lose your card or
leave it somewhere, unless you put your PIN code on your Card
(which you should NEVER do), your money is still safe.
You should call the customer service to report it missing
immediately and you won't be responsible for any unauthorized
transactions. Remember to keep your card in a safe place and
never lend it to anyone.
It is actually a pre-paid, reloadable card and completely
separate from the checking or savings account, or credit or
debit funding source account(s) that you use to load money
to the card. Spending ability is limited to the amount of
money that you separately load onto the card and store in
the card account. When you purchase an item with your card,
the purchase amount is withdrawn from your card spending balance,
and never directly drawn from a funding source account that
you use to load money onto the card.
With a debit card, overdraft protection may mask the actual
account balance, resulting in over-spending. You won't be
able to use a debit card for making a reservation on hotels
and rental cars.
Yes, your card will work at ATMs. You can receive cash with
your card and a PIN (Personal Identification Number). There
is usually some withdrawal fee at most ATMs.
Depending on which prepaid credit card you have, there are
several ways to add value to your card using the followings:
- Check, Cashier's Check or Money Order
- Wire Transfer
- Regular Credit Card
- Online Card Load
- Western Union and other fund transfer services
The beauty of the pre-paid credit card is that you
set your own limits. Your spending power is limited only by
how much money is loaded onto your card, up to the card issuer
assigned value. When the money is gone, you just need to load
more money onto it.
No.
Because you are not borrowing money, you will not be required
to pay interest or finance charges on your Card.
Yes.
What happens if I return something I purchased with a prepaid
card for a store refund?
Just like a regular credit card, the amount refunded will
appear as a credit on your card account.
The transaction will be declined if you do not have enough
money loaded on your card.
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