How to Identify Prepaid and Gift Credit Cards

by Michelle Hogan ; Updated July 27, 2017

The prepaid credit card and gift card market has exploded into a multi-billion dollar industry. Up until the late 1990s, if you wanted to give a gift certificate to someone, you had to go to that store or restaurant and purchase a piece of paper that had the requested amount on it. No longer. Now, gift cards, that are swipe-able like a credit card but work the same as cash, are available in any amount from almost any store.

Step 1

Look for the logo of a major credit card brand, including Visa or MasterCard. This will indicate that you can use the card like a credit card anywhere credit cards are accepted.

Step 2

Look for a name. If it's a gift prepaid Visa or MasterCard, there will not be a customer name on the card. This is strictly a "cash" card that can be used to purchase things online. Usually, these cards cannot be used at an ATM or pay at the pump for gas. Instead, gas could be purchased inside at the register with this card).

Step 3

Look for the word "Debit" on the hologram above the logo. If this card is a prepaid credit card associated with a deposit account, then the word Debit will appear over the hologram. This is usually indicative of a card associated with a checking account (or a prepaid checking-style account) and can be used as debit or credit in all cases where a credit card could also be used. In some cases, these types of debit cards are used as payroll accounts for employees or government services. They work the same way.

Step 4

Identifying a gift card from a particular store or restaurant should be easy. Usually the store logo is on the front somewhere. However, if it's a generic looking card that says "Happy Birthday" or another such occasion, you might have more difficulty. Purchasing a gift card at a store other than the one you are buying the card at --an Applebees card at Walgreen's, for example--could subject you to an additional charge for the purchase.

Step 5

Call the number. Most gift cards have a customer service number or website on the back in very small print. If you need to know the balance of the card or need to know where it is from, call this number.

Tips

  • Almost anyone can get a prepaid debit card with a Visa or MasterCard logo. They do not require a bank account and if you have had trouble with bank accounts, they are a good alternative for shopping and bill paying.

Warnings

  • Most debit and all gift cards are not FDIC-insured, meaning that if you lose the card or it is stolen and money is taken from you, you have little recourse in getting it back. This is changing at some companies.

    Use your card soon. Some gift cards are subject to inactivity fees and balance inquiry fees. Using your card within the first 13 months after receiving should avoid an inactivity fee.

About the Author

Michelle Hogan is a writer and the author of 13 books including the 2005 bestselling memoir, "Without a Net: Middle Class and Homeless (With Kids) in America." Hogan studied English at American University and has been writing professionally since 1998. Her work has appeared in "The New York Times," "Redbook," "Family Circle" and many other publications.

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