How does a prepaid card work?

Creating a prepaid card user account

Prepaid card companies request key information from a user, such as the Name, the contacts, etc. Any full-aged U.S. resident can sign up for a prepaid card. Your bad credit history is not an obstacle as the card is not a credit card.
After account registration a client is to activate his card after which he is given a personal account in the card-issuing bank. Before using a prepaid card you must deposit a certain sum of money onto it. Generally the sum ranges from 100 to 1000$, but you may find other variants allowing you to have more than several thousand dollars on the balance.

A prepaid card usage.

When a client has a card he can use it as any other plastic card. All transactions are transmitted through Visa or Mastercard net into the card-issuing bank using 8-digit card number. After the payment transaction the vendor inquires about the card account and if there are available funds they are charged off from the customer's account. The payment history keeps the record containing special vendor’s code. If you don’t have enough funds on your account then the vendor is informed after which he can suggest you other ways of payment.

Fees and Schedulers

Companies that offer prepaid card services usually collect various fees. An activation fee may be as high as 10$. They also take monthly service payment in the amount of 3-5$. In addition there are other fees such as charging on each transaction (it takes generally 0.1-0.25% of the amount due), and pay for using cash-machine as well. Each company has its own table of fees for using prepaid cards.

One-time and reloadable cards

Some companies offer cards for single use that must be destroyed when zero balance is reached. The other companies provide customers with reloadable prepaid cards. They can be used multiple times by loading direct deposit or a salary onto the account again and again.