Can I load a prepaid card with a credit card?

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

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

Can I load a prepaid card with a credit card?

Some credit card issuers may not allow cardmembers to reload a prepaid card with a credit card. You can load a prepaid card with a credit card by using to pay for the transaction.

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.

Why get a prepaid card?

The most common reason people get prepaid cards, even when buying them as gifts, is to control spending. They are useful if your credit history doesn't allow you to get a regular credit card. With the popularity of online shopping platforms increasing, they are also a good way to shop with limited risk.

Who should get a prepaid card?

There's no approval process for a prepaid card. You're not required to have a bank account or good credit score. Prepaid cards are also great gifts for older teenagers and college students. They can be used to teach how to budget money because of the built-in spending limit. You'll commonly see prepaid cards given at weddings and birthday parties, a way to give the recipient the choice of what they'd like to buy for themselves.

Prepaid card advantages

• The set amount of the card and freedom to choose how to spend it make prepaid cards sensible gift options, especially when you're in a pinch.
• Prepaid cards are good introductions to people unfamiliar with responsible spending and those who may not be in situations to open credit cards.
• Most retailers, even web-based ones, accept prepaid cards.

Prepaid card disadvantages

• If your prepaid card is lost or stolen, you only have to worry about the amount you loaded on the card.
• Prepaid cards don't offer buyer protection if you get scammed on a purchase. You may also have to pay transaction or processing fees.
• A prepaid card won't build credit, so it's not a true substitute for credit cards.

In conclusion

A prepaid card makes a great gift and can be a useful financial tool. However, you'll need to be mindful that reloading prepaid cards with a credit card is not allowed by most credit card issuers; doing so tends to be interpreted as a misuse of the rewards program. Paying cash to load or reload a prepaid card is almost always an option, as is using a debit card.