Prepaid cards are a useful financial tool. You can use them like credit and debit cards, but they don’t draw on lines of credit and aren’t tied to your bank account. Instead, you can spend money that you (or someone else) pre-loaded on the card. This makes them particularly popular as gifts.
It’s generally possible to buy a prepaid card with a credit card, but there are a few things you should know first. We’ll cover which prepaid cards you can buy on credit and where to get them.
Which prepaid cards can you buy with a credit card?
You can use a credit card to buy just about any type of prepaid card, including a prepaid Visa or prepaid Mastercard.
Prepaid cards typically don’t come with restrictions in their cardholder agreement or terms and conditions that would prevent you from using a credit card for the purchase, so it’s really up to the retailer selling the prepaid card to decide whether or not to accept credit card payments.
Most of the popular retail outlets that sell prepaid cards accept credit card payments for any purchase, so you should be able to easily find a prepaid card you can buy with a credit card.
Can you load a prepaid card using a credit card?
You may be able to use a credit card to load or reload a prepaid card with money, but it depends on the credit card you’re using.
Most prepaid card issuers will allow you to add funds to your account using a credit card. However, many credit card companies consider loading a prepaid card to be a “cash-equivalent” or “cash-like” purchase (similar to a credit card cash advance) rather than a traditional purchase. Some card issuers forbid these types of transactions. 1
Other credit cards allow cash-equivalent purchases but impose certain fees and restrictions.
Drawbacks of loading a prepaid card with a credit card
Here’s what to look out for when you transfer money from a credit card to a prepaid card:
- Cash advance fees: Many credit card issuers charge a cash advance fee equivalent to a dollar amount (e.g., $5 or $10) or a percentage of the transaction amount (e.g., 2%–5%).
- Low cash advance limit: Your regular credit limit may not apply to cash advances or cash-like purchases. You might only be able to load a smaller amount onto a prepaid card.
- Higher interest charges: Some credit cards have a separate APR that applies to cash advances, which will be higher than your normal credit card APR (the purchase APR). In addition, interest may begin accumulating on the day of the transaction rather than after your regular credit card grace period.
- Ineligibility for cashback rewards: Cash-equivalent purchases may not be eligible to earn credit card rewards, such as cash back, rewards points, or miles.
Check with your credit card issuer before loading a prepaid card (or buying a preloaded one) to ensure you’re not violating the terms and conditions of your credit card agreement or racking up excessive fees.
How to buy a prepaid card with a credit card
Once you’ve confirmed that your credit card agreement allows cash-equivalent purchases like prepaid cards and gift cards, you can begin researching your options and finally make the purchase.
1. Decide where to buy a prepaid credit card
You can buy a prepaid debit card in a regular brick-and-mortar store or make your purchase online or over the phone. You may find more options and better deals by shopping online, but the drawback is that you may have to wait longer for your physical card to arrive in the mail.
Here are places you can shop for a prepaid card in person:
- Banks
- Credit unions
- Retail stores (e.g., grocery stores, drugstores, gas stations, and convenience stores)
- Currency exchange offices
2. Shop around
Explore lists and reviews of the best prepaid credit cards on the market and compare different offers. This is an important step in finding the perfect prepaid card for your purpose, whether it be for yourself or for someone else.
Here are some of the top prepaid cards you might want to consider:
- Bluebird® by American Express
- Netspend
- Walmart MoneyCard®
- Brink’s Prepaid Mastercard®
- FamZoo Prepaid Card
- PayPal Prepaid Mastercard®
- Serve® American Express® Prepaid Debit Account
Think carefully about the type of prepaid card you want. Some prepaid cards can only be used at particular stores, whereas others can be used anywhere that accepts card payments through one of the main credit card networks. 2
If a more versatile card appeals to you, then you can narrow your search to just the prepaid cards offered by Visa, Mastercard, or American Express.
3. Set up the prepaid card account
Once you’ve chosen and purchased a prepaid card, register it so that you have protection in case it’s ever lost or stolen. Reloadable cards purchased online are usually automatically registered, but this won’t be the case if you bought your card at a retail store. 3
After setting up and activating the prepaid card, check your credit card account details to see what fees you’ve been charged and then pay off the balance as soon as possible to avoid having to pay extra interest.
If you’re giving the prepaid card as a gift, it’s also a good idea to save the receipt in case the recipient has any issues activating or loading their card.
