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Guide to selecting and using prepaid cards

By | John Preston

The first step to learn to better manage your personal finances is through the use of prepaid cards, since they allow us to use them almost like a debit card, but without worrying about spending more than we can pay because the limit will always be the amount available on our account.

Prepaid cards have become an important option for many of us in recent years since they are relatively easy to obtain and at the same time very versatile in their use.

In this guide you will find information about the convenience, security and savings that these cards can provide. In addition, this guide will help you select the prepaid card that best suits your needs, and will demonstrate the simplicity of the requirements to obtain one.

Whether you’re just looking for convenience and comfort, or planning for long-term financial security, a prepaid card is definitely a first step in the right direction.

What is a prepaid card?

A prepaid card is a financial product similar to a debit card, but without the need to have a bank account. Every time you use it, you’ll be spending the money you put on your card.

In a nutshell, prepaid cards allow you to have better control of your budget:

  • Convenience: They can be used to pay for your purchases and bills in person, over the phone, and even online.
  • Versatility: They are accepted in miles of commercial establishments, and some can even use ATM cards to withdraw cash through ATMs.
  • Security: There is no possibility of spending more than what is available on your card, and many also insure your money in case your card is lost, stolen or misused without authorization.
  • What to know: Ask if your card is FDIC insured. The Federal Government, through its Federal Deposit Insurance Corporation (FDIC), guarantees the money in certain personal accounts in the event of bankruptcy or financial collapse of the bank that issues these cards and accounts.

Types of prepaid cards

Non-reloadable prepaid cards

They are the popular prepaid cards usually known as “Gift Cards”.

They are the easiest cards to acquire. Some are associated with a chain of stores and are valid only in certain establishments, or they are cards that can be used in places that accept debit and credit cards, even by telephone and Internet.

  • You simply buy a card with an amount of money assigned to it, and you can use it as long as you have funds. However, they have limitations, for example:
  • They are not rechargeable;
  • They could have an expiration date;
  • They are not protected in case of theft;
  • You could lose your money if you lose them.

Reloadable prepaid cards

Reloadable cards are bank cards, in which you can continue depositing money to use them for a longer time. They are the most convenient because you can even use them to have your salary directly deposited to the card; You can make deposits at stores where you make your purchases, and you can make automatic payments for recurring bills such as telephone, electricity, and other services, among many other benefits.

These cards have a cost that can be monthly or per transaction. However, you’ll soon notice that reloadable prepaid cards save you time and money on many of your transactions by no longer having to pay for services like check cashing and bill payments.

How to choose a reloadable prepaid card

To decide, you must first think about how you are going to use your card. Please read the limitations carefully before choosing your card!

A reloadable prepaid card must meet at least two fundamental requirements: convenience and security.

Demand comfort

  • Check if the card you evaluate meets the following points:
  • Ability to easily add money in stores
  • Direct deposit of your salary
  • Possibility of managing your account online (over the Internet)
  • Possibility of making your payments online or by phone
  • Receive text messages to your cell phone about your balance and transactions
  • Possibility of obtaining additional cards
  • Transfer money to other cardholders
  • Dedicated customer service

Demand security

Check if the card you evaluate meets the following points:

  • Protection in case of theft or loss of card
  • Card backed by a US bank
  • Personalized with your name and a PIN (Personal Identification Number)
  • FDIC Insured

What you need to know: Do you sometimes wonder where your money was spent? Reloadable prepaid cards are ideal for taking control of your finances. Some of these cards offer you the ability to check your spending and balance online or via text message, without the need for a bank statement. Remember that you can only spend the amount of money you have available on the card. You are in control!

How to get a reloadable prepaid card

Obtaining a reloadable prepaid card is relatively easy and can be done in minutes.

The information you will need to provide is:

  • Social Security number.
  • In case you don’t have one, foreign photo IDs such as the matricula consular or passport are also regularly accepted.
  • Postal address (home address).

What You Should Know: The US PATRIOT Act is a Federal Law that requires all financial institutions to obtain, verify, and record information that identifies each person who opens an account with a financial institution. This law is for the protection of all of us in an effort to improve public safety against terrorism and money laundering.

Get the most out of your card!

Activate it as soon as you receive it and you’ll find that your prepaid card is just like cash but better! Start enjoying some of the benefits below.


  • It is a practical and safer option than carrying cash.
  • Gain greater control of your spending—now you can know where your money is spending.
  • Take advantage of discounts when shopping online.


  • Pay your telephone bills, electricity and other services by Internet and telephone.
  • Forget the problem of late fees or cancellations and credit your payments instantly.
  • Enroll your card to automatically make fixed monthly payments.

Withdrawals and deposits of money

  • Your card becomes your bank account.
  • Request automatic deposit of your salary so you don’t have to go to the bank to cash your check.
  • Use ATMs to withdraw cash when you need it.
  • Withdraw cash at the stores where you shop.
  • Reload checks or cash at participating stores.

What you should know: Don’t forget to activate your cards, whether they are temporary or permanent. As soon as your permanent card arrives, it will have your name engraved on it; it is important to also activate it immediately to enjoy all its benefits. Follow the instructions that come with your card.

Protect your identity and beware of fraud

As in any financial transaction, you must take care of your money and its security. These practical tips can prevent you from falling prey to crime and/or fraud.

  • Sign your prepaid card just like any bank card, as soon as you receive it.
  • When discarding your expired prepaid cards, cut them up first.
  • Keep your personal code (PIN) a secret.
  • Avoid easy passwords like obvious names and numbers, like your birthday or phone number.
  • Keep your personal and financial information in safe, locked places.
  • Do not give out your card numbers to strangers or give out personal information over the phone if you did not initiate the call.
  • When signing vouchers or receipts do not leave blank spaces in front of the amount in numbers, just draw a line to prevent someone from adding a number. Never sign a blank receipt.
  • Review your list of transactions frequently. Call customer service if you see a transaction you did not authorize.
  • Write down the customer service number and keep it in a safe place. If you lose your card, call immediately to block the card and any fraudulent purchases. You will receive a new card and you will not waste your money or time. 
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