Reloadable Credit Cards

Those prepaid credit cards that look like a regular credit card are often called reloadable credit cards.  They have a Visa or Mastercard symbol, can be used as a debit or credit card for purchase transactions, but there is one distinct difference:

They are funded with your own money.

There is no actual credit involved which means these cards are very easy to get.  Online applications require only a few pieces of information.  Kids as young as 14 qualify for some of the reloadable credit cards available on the market today and can use them to manage their own money.

However, not all reloadable credit cards are the same.  Each comes with a set of fees, requirements and options.

Understanding these fees is necessary in order for you to select a prepaid or reloadable credit card that costs as little as possible in the long run.

Spending habits and card use will determine which of the fees apply to you.

These are some of the more popular reloadable credit card fees and terms:

Activation Fee – When you apply for a card, you are asking to be given a card you can  use as a reloadable credit card.  As long as your identity information can be confirmed, the issuer will send you the card.  Turning the card on so that it can be used requires an activation fee.

Maintenance Fee – This is the bank’s charge for maintaining the records, balance and transaction information for your card.  This may be charged once a month or once a week.

Bill Payment Services – If your bank allows online bill payment through the reloadable credit card, there may be a fee for use of the service.  Several companies, however, throw this in for free as it is a valuable tool in helping you manage your money.

ATM Transaction Fee – You may be charged for all or some ATM transactions.

Load or Reload Fee – Once the reloadable credit card has been activated, money will need to be periodically loaded onto the card so that it can be used.  There may be a charge to load money depending on which method is used.  Loading money through direct deposit of a paycheck us generally free whereas loading money through retail stores and grocery stores may involve a small fee.


PIN Transaction Charge – When the card is used for a purchase, the store or retailer may ask if the charge should be run as a debit card transaction or a credit card transaction.  Debit card transactions are processed by having the consumer enter their PIN into a PIN machine.  This is called a PIN transaction.  Some reloadable credit cards charge a fee for PIN transactions as compared to free signature, or credit, transactions.

Transfer Fees – Reloadable credit cards are very flexible money management tools and they may allow you to transfer money from your checking account to your reloadable credit card or from the reloadable card to another card.  These transfers may result in a fee.

The only way to determine how much reloadable credit cards truly cost is to read the fine print in the Terms of Service that apply to each card.  When you have the online application screen up, there is a link somewhere to these terms.  Bring up the terms and review all the sections that discuss terms, usage, and discounts. 

Consider how you intend to use the card:

How will money be deposited – direct deposit or cash loads?

How will the card be used – bill payment, groceries, gas?

Will you transfer money to and from the card?

Do you want online account management?

Once you’ve documented how you will use the card, figure out which of the card’s fees will apply really apply to you.  Now you have some real facts with which you can compare all reloadable credt cards and offers.