Most people use debit cards instead of writing checks for purchases. Consumers can also purchase pre-paid debit cards or gift cards, which are not an extension of your bank account. Instead, you purchase them using cash. Some pre-paid cards are non-reloadable, which means that you cannot put more money on them once you deplete the balance on the card.
Typically, you cannot reload gift cards. The person who purchases the gift card puts applies a specific amount of money, and after you use the entirety of the balance, you can no longer use it. In some cases, however, certain gift cards are reloadable; you can increase the card's balance by paying with cash, debit or credit card at the issuing store or you can call the number on the back of the card and use a credit or debit card to fund the amount. Of course, funding the gift card is subject to terms and conditions of the specific card.
Not Connected to Checking Account
Most non-reloadable debit cards are not connected to a bank account the way regular debit cards are. For example, a debit card connected to your checking account will automatically debit funds to complete your purchase transaction. In this instance, you "reload" your card by depositing more money into your account. Non-reloadable cards, however, do not have a connecting account that you can either access or control, which makes depositing more funds an impossibility.
Purchase and Maintenance Fees
If you use a non-reloadable debit card, you may have to pay a purchase fee when you buy the card. The purchase fee allows the bank that issued the card to make money even though you do not have any money on deposit with the bank. Also, the issuer may charge a monthly maintenance fee until you use the entirety of the card's balance.
Some banks or gift card companies charge inactivity fees on non-reloadable cards. If you do not use the card for 30 days, the issuer deducts a small fee from your current balance. Inactivity fees allow card issuing companies to make money if a cardholder fails to use the card often enough to require purchasing a new card and paying a new purchase fee.
- Visa: Visa Gift Card FAQ
- Visa: Visa Prepaid Card FAQ
- "USA Today"; Fees on Reloadable Prepaid Debit Cards Cost Consumers; Sandra Block; January 18, 2011
- American Bar Association. "Automatic Teller Machines (ATMs) and the Law." Accessed March 24, 2020.
- CVV Number. "What Is My CVV Number and How Do I Find It?" Accessed March 24, 2020.
- Huntington National Bank. "How to Use a Debit Card: Online, ATM & Chip." Accessed March 24, 2020.
- Consumer Financial Protection Bureau. "What Is the Difference Between a Prepaid Card, a Credit Card, and a Debit Card?" Accessed March 24, 2020.
- Visa. "Visa Prepaid Reloadable Personal Cards." Accessed March 24, 2020.
- Consumer Financial Protection Bureau. "Understand the Fees You Will Pay." Accessed March 24, 2020.
- Federal Trade Commission. "Lost or Stolen Credit, ATM, and Debit Cards." Accessed March 24, 2020.
- Consumer Financial Protection Bureau. "What Is a Grace Period for a Credit Card?" Accessed March 24, 2020.
Jack Ori has been a writer since 2009. He has worked with clients in the legal, financial and nonprofit industries, as well as contributed self-help articles to various publications.