Financial Literacy for Everyone

Prepaid cards

A prepaid card works the same way as a prepaid cellphone card: you put money on the card and then you can use it.

You or someone else (like parents or an employer) can deposit money into the card electronically or by depositing cash or a cheque at the bank.

You do not need a minimum balance. You can use all the money in the account, and deposit again when you have money available.

You can check your balance on the card at the ATM, draw cash and send (also called transfer) money to someone else. You can also pay accounts and use it in shops.

It is therefore similar to cash, just safer and easier. Another benefit is that you cannot get yourself into debt with this card, because you can only use it if you have money on the card. In this way, it helps you to manage your budget

Once you have put money on your prepaid card, you can use it at any till that accepts electronic payments. Firstly, you give the teller your card. The teller will ask you "cheque or savings," and you say "savings." You then type in your PIN. The price of what you are buying is then subtracted from your balance. The amount is taken out of your account and paid over to the shop immediately.

Cost of a prepaid card

You normally pay a once-off fee to get the card. There are normally no monthly fees, but you pay a fee when you deposit money. The fee is a small percentage of the deposit.

Normally you do not earn interest on the money in your card.

If you lose your card, it is important to phone the toll-free number of the bank immediately and report the loss. The bank will then replace the card for a fee.

As with all your PIN numbers, you must never give it to anybody. Anybody who knows your PIN can use your card.