4 Guidelines for Choosing an Online Prepaid Card Company

An online prepaid card company will issue you a card, similar to a credit card, to make day-to-day purchases. Unlike a credit card, this prepaid card does not provide for any use of debt or credit. Instead, you will have to load your personal funds onto the card before spending. Some consumers use online prepaid cards in order to make purchases through the Internet when they cannot use cash or checks. 

#1 Look for Major Credit Card Label

You should know prepaid cards are not always accepted by every retailer. Some prepaid card companies, however, offer wider acceptance than others. If you can locate a card with a major label, like Visa or MasterCard, you will have a better chance at gaining universal acceptance. Credit card companies typically offer prepaid cards as an alternative to their credit card offers. The cards will have the company's label, and they can be used just like credit cards at most locations. 

#2 Consider Reloading Fees

You will have an initial activation fee when you open a card, and there will also be a fee to add more funds to the card in the future. Make sure you are aware of this fee before choosing which company you will use. Some companies will have reloading fees much higher than their activation fees, and they can trap you with this technicality. 

#3 Ask about Theft Protection

Most prepaid cards are like cash. This means you cannot recover the funds if you lose or misplace the card in anyway. Credit card companies offer theft protection for this reason, but few prepaid card companies offer the service. Ask the companies you are considering if you have the option to cancel your card if it is lost or stolen. Make sure to ask about the fees for doing this, because those fees can also add to the expense of having the prepaid card.

#4 Compare to Credit and Charge Cards

In the end, most consumers will find there are more benefits to having an actual credit or charge card instead of a prepaid card. Only get a prepaid card if you cannot secure a reasonable rate on a comparable credit card. If you pay down your balance each month on a credit card, the financing is incredibly cheap, and you will see more benefits to your credit score than you will if you use a prepaid card each time.

#5 Read Reviews 

Prepaid card companies should provide good customer service in return for the funds you pay them. You can find reviews on your company by checking your Better Business Bureau website or any popular review site. You should also be vigilant of the possibility for fraud against you by checking to ensure the prepaid company is legally registered in the state it claims to be based in. Simply navigating around the company's website to look for phone numbers, an address and other information can help you learn more about how helpful the company is likely to be if you have an issue or a question. 

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