Can I load a prepaid card with a credit card?

One of the most popular gift options these days is prepaid gift cards. They're useful for all ages, but especially for teens who are old enough to be responsible for how they spend their money. Sometimes, gift cards can be a way for people to curb unhealthy spending behaviors because of the fixed spending limit.

To get a prepaid gift card, you can simply pay cash or charge for one at the register of your local supermarket, pharmacy or department store. Some of these gift cards are reloadable, but trying to reload a prepaid gift card using a credit card may affect rewards programs.

Can I load a prepaid gift card with a credit card?

You can load a prepaid gift card with a credit card by using the credit card to pay for the transaction. However, some credit card issuers may not allow cardmembers to reload eligible prepaid gift cards with a credit card.

To reload a prepaid card with a credit card, if you have no other payment options, you can get a cash advance on your credit card. Cash advances are available at many banks' ATMs, but cash advance fees are typically high, so this tactic is not very worthwhile.

Most gas stations, drug stores and grocery stores allow you to buy a new prepaid card with a credit card no questions asked, and the activation fee should be less than a cash advance fee.

Who should get a prepaid gift card?

There's no approval process for a prepaid gift card. You're not required to have a bank account or good credit score. When offered as gifts, prepaid gift cards give recipients the choice of what they'd like to buy for themselves. Although they can make good gifts, prepaid gift cards can also be used to teach someone how to budget money because of the built-in spending limit.

Prepaid gift card advantages

• The set amount of the card and freedom to choose how to spend it make prepaid gift cards sensible presents, especially when you're in a pinch.
• Prepaid gift cards are good introductions to people unfamiliar with responsible spending.
• Most retailers, even web-based ones, accept prepaid gift cards.
• If your prepaid gift card is lost or stolen, you only have to worry about the amount you loaded on the card.

Prepaid gift card disadvantages

• Prepaid gift cards don't offer buyer protection if you get scammed on a purchase.
• You may have to pay transaction or processing fees when loading or activating the card.
• A prepaid gift card won't build credit, so it's not a true substitute for a credit card.

In conclusion

A prepaid gift card can be a useful financial tool. However, you'll need to be mindful that reloading prepaid cards with a credit card may not be allowed by most credit card issuers. Paying cash to load or reload a prepaid card is almost always an option, as is using a debit card.