For any prepaid credit card, the most certain spending limit is the amount of money loaded on the card. Unlike a traditional credit card, once you spend your prepaid card balance, you're not able to borrow from the card company and can't spend any more until you reload the card. Most prepaid cards also have additional limits on how much you can spend per day and, often, per month.
Daily limits on a prepaid credit card are that you can only spend as much money as you've added to the card and that your card company might set limits on how much you can withdraw or spend each day.
How Prepaid Cards Work
Prepaid cards have become a popular choice for storing and spending money, and they're widely available at grocery stores, convenience stores and online. Some companies even pay some of their employees on a prepaid card. Most of them have either the Visa or MasterCard logo on them, so they can be used wherever that brand of credit and debit cards are accepted, including online and in brick-and-mortar stores and restaurants. Many can also be used at ATMs to withdraw cash, often for a fee.
Regardless of where you get a prepaid card, you can only spend as much money as you've loaded on the card. Many prepaid cards enable you to load more funds onto the card, either through a bank transfer, from another prepaid card, by paying cash in a store or by receiving a direct deposit from your employer. Once you have spent all the money you have on the card, you're unable to spend or withdraw more until you reload the card.
Daily Transaction Limits
Prepaid cards often come with daily spending limits and limits on how much you can withdraw from an ATM every day, even if you have a sufficient balance on the card to spend more the next day. Some also limit the amount you can spend or withdraw per month.
These limits are usually in the hundreds or thousands of dollars, but they vary from card to card. If you're not sure what the limits are on your card or a card you're considering, it's worth checking with the card issuer to make sure the card provides the level of access to your money that you want.
Account and Transaction Fees
There are a variety of fees that users of prepaid cards can be charged. These include fees for using ATMs, monthly fees, fees per transaction and fees for months in which you don't use the card.
These fees, charged against your card balance, can add up and decrease your overall spending ability on many of these cards. If you know how you're going to use a prepaid card, such as whether you'll make many ATM withdrawals or will go months without using the card, it can be worth shopping around for one with a fee system that will cost you the least.
- Green Dot: Card Fees and Limits
- Account Now: Questions About Your Prepaid Card
- MyVanilla: Fees and Limits
- CreditCards: 9 Things You Eeed to Know About Prepaid Cards
- FDIC. "2017 FDIC National Survey of Unbanked and Underbanked Households." Accessed Oct. 15, 2020.
- Experian. "Do Prepaid Credit Cards Help Credit Scores?" Accessed Oct. 15, 2020.
Steven Melendez is an independent journalist with a background in technology and business. He has written for a variety of business publications including Fast Company, the Wall Street Journal, Innovation Leader and Ad Age. He was awarded the Knight Foundation scholarship to Northwestern University's Medill School of Journalism.