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Simple English definitions for legal terms
prepaid card
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A quick definition of prepaid card:
A prepaid card is a type of card that allows you to spend a certain amount of money that you have already paid for. It's like having a gift card or a voucher that you can use to buy things. You can use it instead of cash to pay for goods and services. You buy the card from a bank or a store, and then you can use it until the money runs out. It's a convenient way to make purchases without carrying cash around.
A more thorough explanation:
A prepaid card, also known as a stored-value card, is a device that allows access to a specific amount of funds for making payments to others. It is the only way to access the funds and does not have an associated account in the holder's name.
For example, a consumer can pay a bank or merchant money in exchange for a stored-value card. The consumer can then use the card instead of cash to purchase goods and services. This type of card is often used for gift cards, travel cards, and phone cards.
Prepaid cards are convenient because they eliminate the need to carry cash and can be used anywhere that accepts debit or credit cards. They also provide a way to control spending since the cardholder can only spend the amount loaded onto the card.