If you are someone that is conversant with the digital world and someone that has made a lot of online payments, then you must have heard the term Visa Gift Card and Prepaid Card.
You may have had confusion with distinguishing the two; well this article is to help you identify the difference between a visa gift card and a prepaid card.
Visa Gift Card
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Visa gift card is a stored value card loaded with some money for any purpose in the near future but the catch is that it contains only a specified sum of money.
If you should finish the money stored in the card, then the card becomes useless.
In addition, Gift cards also have expiration dates which much shorter than that of their prepaid counterparts.
Gift cards come in different formats. The one we most know is called a closed loop card: It is good for a particular store or organization and is the one mostly used in Promo offers.
Nowadays many major charge or credit card issuers, like the famous American Express, Visa, and
MasterCard, are now offering gift cards, in the regular familiar plastic form.
These are known as open-loop gift cards, these ones that are most easily confused with their prepaid card counterparts, mostly because some of them are reloadable.
The cards usually come with an activation fee.
Prepaid Cards
A prepaid card is technically a type of a debit card that is issued by a registered and regulated financial institution or credit card company such as Visa, MasterCard, and Discover, they are to be deposited or “loaded” with any certain amount of money as the owner wishes.
They can be used in person or in online transactions to purchase items or pay your utility bills. In addition, they can be used to withdraw cash from ATM’s.
Like regular credit cards, prepaid credit cards have an identification number and expiration dates
printed on the back.
The amount of money on the card represents the card’s credit limit, which is how much that can be put on the card.
Once the balance on the card is exhausted, then the card is basically worthless, unless more funds are deposited.
A prepaid debit card can be used repeatedly, as long as the cardholder keeps adding money to it. It may carry a monthly fee for this though.