A prepaid card is like a pay-as-you-go mobile phone – you top it up with money in advance.
You use it like any other payment card, in shops or online. Most prepaid cards work at cash machines too. Most retailers accept them, but not all do so always have a backup way to pay.
The difference is that the card isn’t linked to a bank account. You can have your wages or benefits directly sent to your prepaid card, or load cash onto it at participating reload locations.
You can only spend the money you put on it, so there’s no way of going overdrawn or running up a debt. Your payments won’t be recorded on your credit report, and how you use the card will not affect your credit score.
You can choose the amount of money you want to load onto the card, though there might be daily, weekly or total limits on the amount you can add. These limits may be waived when you receive a direct deposit of funds to the card. Cards may be for one-time use, like gift cards, or reloadable.