How Prepaid Cards Work
You may have received a prepaid card before as a gift, a government disbursement, refund, or other payment. Unlike debit cards, prepaid cards are not tied to a bank account. When you make a purchase with a prepaid card, the amount is subtracted from the balance of the card. Here’s what you can do with it:
Prepaid cards as an alternative check cashing tool – Many consumers still operate outside the traditional financial system and take their checks to check-cashing stores. This practice can get quite expensive due to the fees, so choosing a prepaid card that offers the ability to have funds directly deposited on account, which you can spend or withdraw at ATMs may save you money in the long run.