Daily Limits on Prepaid Credit Cards

by Marie Huntington
A prepaid credit card can be used to make retail purchases.

A prepaid credit card can be used in the same manner as a credit card or debit card, but you must deposit money on the prepaid credit card at participating retailers or allow funds to be directly deposited onto the card. It is a reloadable card, and the available balance on the prepaid card is limited by the amount of your deposit minus any transaction fees debited to the balance by the prepaid credit card company.

Reloadable Card

Unlike a credit card that provides a line of credit, you are only allowed to use whatever amount that you load onto the card. It can be used to pay bills and purchase items from any merchant that accepts the card logo of the financial services corporation, such as a Visa or MasterCard logo. Any amount charged to the card will be immediately debited from the balance. You can always add more money to the card once the balance is depleted.

Card Limits

The usage limits for prepaid credit cards vary, depending on the prepaid credit card company. For instance, some card companies may allow an unlimited maximum value but place limits on the daily spending limits, while other companies place usage limits on deposits and ATM withdrawals. The usage limits are included in the cardholder agreement, which should be provided to you before you activate the card.

Reload Limit

There may be a daily reload limit on the amount of money you can deposit onto the card. The daily reload limit is usually equal to the maximum value for the card. For most prepaid credit cards, the maximum value for a card is more than $1,000 and may be as high as $10,000. However, some prepaid credit card issuers may allow higher deposit limits or unlimited amounts for direct deposits only.

ATM Withdrawal Limit

Most prepaid cards are also valid for ATM use, if you create an ATM withdrawal PIN, which is usually a four-digit personal identification number. Prepaid card companies may also set a daily withdrawal limit for ATM withdrawals. The ATM withdrawal limit is typically less than $1,000 per day.

Spending Limit

The daily spending limit is also based upon the terms and conditions for using a prepaid card issued from a specific company. The spending limit includes all purchases made for each day, and ATM withdrawals may also be included within the maximum allowable amount that you can spend for each day.

About the Author

Marie Huntington has been a legal and business writer since 2002 with articles appearing on various websites. She also provides travel-related content online and holds a Juris Doctor from Thomas Cooley Law School.

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