A debit card is a bank-issued card that allows you to access funds held in your checking account. You can conveniently tap into your account without having to make a trip to the bank. A nonreloadable debit card is not an actual debit card. Although money is debited from the account as you make a purchase, it is not associated with a bank account. You cannot add more money to a nonreloadable card. A prepaid card is a more flexible card option that can be reloaded daily.
When a debit card is nonreloadable, the card is no longer usable when the account balance reaches zero. This contrasts with gift cards and prepaid cards, which are often reloadable.
Nonreloadable Debit Cards
Nonreloadable debit cards are sometimes sent out by merchants as part of promotional offers and rebates. The cards also can be purchased from banks and credit unions. A nonreloadable card acts like a prepaid card. The major credit card companies, Visa and Mastercard, both issue nonreloadable debit cards. The cards can be used anywhere Visa and Mastercard debit cards are accepted. You can use the card to make purchases online, over the phone and in stores. When the balance reaches zero, you can no longer use the card. If the card is not used and there is a balance, the issuer may deduct a service charge from the dormant account each month. Since nonreloadable debit cards are not insured by the Federal Deposit Insurance Corporation, the funds on the card may not be covered in the event of the issuing bank's failure.
Gift cards issued by major credit card companies can look similar to credit or debit cards. If the gift card arrives without a PIN number, you will need to enter it as a credit. If you select debit, the transaction will be declined. If your gift card is marked as reloadable, you'll be able to put more money on it and use it again. However, some gift cards are marked as nonreloadable and will need to be discarded once no balance remains.
Prepaid cards are reloadable cards that display the major credit card company logos – American Express, Discover, MasterCard or Visa. You can use the card just like you would a regular credit card. Unlike gift cards, prepaid cards are subject to identity verification. Reloadable prepaid cards are personalized with your name. You can even have funds directly deposited to your prepaid card.
Card Fees and Limits
The purchaser is responsible for paying the fee associated with the nonreloadable, gift card and prepaid card. The card purchase fee varies depending on the type of card. For example, the MyVanilla prepaid card charges a fee of up to $4.95 per transaction for reloads. The fee will need to be paid in addition to the amount you're loading onto the card; you can't simply have the fee taken out of the new balance on the card. The maximum value that can be placed on a gift card or prepaid card is established by the card issuer. For reloadable prepaid cards, there often is a daily reload limit. With a Green Dot prepaid Visa or Mastercard, for example, the direct deposit limit is $10,000, and cash reloads are limited to $2,500. Prepaid cards generally carry a monthly usage fee. Some issuers will waive the monthly fee if you make a certain number of purchases or reload a minimum amount each month.
Jeannine Mancini, a Florida native, has been writing business and personal finance articles since 2003. Her articles have been published in the Florida Today and Orlando Sentinel. She earned a Bachelor of Science in Interdisciplinary Studies from the University of Central Florida.