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Reloadable Debit Cards: How They Work

Reloadable debit cards allow you to periodically add money to your card balance, which you can then spend as needed. If you’re considering getting a reloadable debit card, here are some important things to know, including how they differ from regular bank debit cards.

Key points to remember

  • A reloadable or prepaid debit card is not the same as a debit card linked to your bank account.
  • Reloadable debit cards allow you to add money to them as needed.
  • Some reloadable debit cards charge a fee to add more money to your balance. They may also have other fees.
  • Many reloadable debit cards offer consumer protections in the event your card is lost or stolen and used to make unauthorized charges.

What is a reloadable debit card?

A reloadable debit card, also called a prepaid debit card, is a card you can use to make purchases. They are sold in grocery stores, pharmacies, convenience stores and other retailers. The main difference between this type of debit card and those issued with bank accounts is where the money comes from.

When you open a current account, your bank may provide a debit card that you can use to make purchases or withdraw cash from ATMs. When you use your debit card, the money comes directly from your checking account.

A reloadable debit card, on the other hand, is not linked to a bank account. So unlike a bank debit card, which normally lets you spend as much money as you have on the account, a reloadable card limits you to the money you load onto it.

If you received an economic impact payment under the CARES Act, it may have been issued in the form of a prepaid debit card. An estimated 4 million stimulus payments were issued to eligible taxpayers in this manner in 2020.

How reloadable debit cards work

Using a reloadable debit card is quite simple. You purchase the card, then follow the activation instructions that come with it. Once the card is activated, you can load money onto it. Depending on the card, you may be able to load money online, over the phone, using direct depositor in person where you purchased it.

Once you’ve added money to the card, you can use it the same way you would with a regular debit card. For example, you can use a prepaid reloadable debit card to:

  • Pay the bills
  • Buy online
  • Fill up on gas or go shopping
  • pay for dinner
  • Cover carpooling or taxi costs

To note

Some reloadable debit cards also give you access to an ATM, allowing you to withdraw money from your card when needed.

How to choose a reloadable debit card

Not all reloadable debit cards have exactly the same conditions. Here are some of the differences to consider when choosing one:


While it is possible to find free reloadable debit cards, others charge various fees for using them. For example, you might pay activation fees, reload fees and/or monthly service fees just to have the card. And if you use your card to withdraw cash from an ATM, there may also be a separate charge for that.

Reload Options

Cards also vary in how you can top them up. Again, your options may include adding money over the phone, online, by direct deposit, or in person. If you add money in person, you may be able to do so in cash. But if you add money online, you will need a bank account to transfer the money unless you have the option to use mobile check deposit.

Loading, purchase and withdrawal limits

Reloadable debit cards may impose different limits on how much you can add to your balance at one time, daily or weekly. There may also be limits on the amount you can spend or withdraw in a single transaction or per day.


When considering a reloadable debit card, it’s important to check where the card is accepted. You want to choose a card that can be used where you spend most frequently. Many reloadable cards are issued in conjunction with major credit and debit card networks, such as American Express, Mastercard and Visa, so they are widely accepted.

deposit insurance

Like money in a bank or credit union account, some reloadable debit cards are covered by insurance from the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Administration (NCUA). The money you put on your card may be held in a joint account at a financial institution, along with money from many other cardholders. If that financial institution fails, deposit insurance can kick in so you don’t lose money. Reloadable debit card issuers are required to let you know if your money is safe before you buy their card. 

Other card features and benefits

Some prepaid debit cards offer additional benefits. The Bluebird card from American Express, for example, comes with features like emergency assistance and fraud protection. But that’s not the case with all cards, so it’s worth looking at what else you get before signing up.

If you’re shopping for a reloadable debit card, you can also check out the list of The 5 Best Prepaid Debit Cards of 2022.


When selecting a reloadable debit card, check to see if the card has an expiration date. If so, find out what you’ll need to do to get a new card so you don’t lose access to your balance.

Benefits of using a reloadable debit card

There are several reasons a person may choose to use a reloadable debit card. The first is convenience. For example, reloadable debit cards make it easier for someone who is currently unbanked Where underbanked to carry out daily transactions without carrying a lot of cash.

A prepaid card might also work for someone who needs help with overspending or learning to track spending. For example, if you’re a parent, a teen debit card could be a useful educational tool to get kids used to tracking their spending.

There are also no negative credit side effects with a prepaid debit card, since you do not incur any debt. The flip side, however, is that unlike a credit card, you can’t use a reloadable debit card (or debit cards in general) to build a positive credit history.

Are reloadable debit cards safe to use?

Regular debit cards linked to checking accounts come with certain protections in case your card is lost or stolen. Previously, prepaid debit cards did not have these same protections, but new federal rules introduced in 2019 changed that somewhat.

According Consumer Financial Protection Bureau guidelines, reloadable debit cards are now treated more like checking account debit cards. The main changes included:

  • More transparent fee information.
  • Extensive access to account information, including transaction summaries provided by the issuer.
  • The right to dispute fraudulent charges on registered and chargeable debit card accounts.
  • Fraud protection for unauthorized charges.

The latter is especially important if you are concerned about losing your card balance if the card is stolen or used to make fraudulent purchases. In the event of loss or theft of your card, the CFPB advises you to contact the issuer of your card without delay to inform them. Waiting too long to report unauthorized charges could cause you to lose the fraud protections that come with your card and cost you money.

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