Prepaid cards work like debit cards except you don’t need to have a bank account. A prepaid card can allow you to make purchases in stores and the purchase amount is deducted from your prepaid balance. Many prepaid cards allow you to take money out at an ATM. You can also have funds loaded from your paycheck through direct deposit. Most prepaid cards are not FDIC insured. Also, you may not enjoy the benefits of certain Banking Laws that apply to Debit Cards (such as “Reg E” that allows you to dispute unauthorized purchases).
Related Terms: Debit Card