May 18, 2025 · 10 mins read
Santosh Kumar
A Prepaid Credit Card is a secured credit card issued by a bank that has been secured with a prepayment. Unlike normal credit cards that function on borrowed credit from the bank, prepaid credit cards come with loaded money. Generally, when you use a prepaid credit card, you are spending money that you already have loaded onto the card. Since prepaid cards don't allow you to carry a credit balance and pay later, it is not true credit cards. Here's everything you need to know about prepaid credit card benefits.
Before you can use your prepaid card, you will have to load money into your account, similar to how you do with a gift card. Also, you can only spend as much as you have loaded onto your card. As you start spending using your prepaid card, the number of purchases is deducted from the balance.
For example, you deposit Rs.20,000 onto your card and you decide to spend Rs.12,000 on online shopping. Now your remaining balance is Rs.8000. Once you have used the entire balance that you have loaded (ie. Rs,20,000), you have to reload more money onto the card before you can use it again.
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Below are the different varieties of prepaid credit cards available-
Open looped cards are generally branded with the network (American Express, Visa or MasterCard) they are affiliated with and are also known as open system cards. They are accepted at locations and merchant outlets approved by banks.
Closed looped cards- Mostly gift cards are issued as closed-loop cards. Their acceptance is limited to the affiliated merchant outlet for buying goods and services at those outlets only.
Semi-open looped cards- These are accepted by many merchant outlets or chains, who are affiliated with the card. These are majorly issued by retail chains or shopping centres.
Reloadable card- Majority of prepaid cards come as reloadable cards, where you have the option to add funds once the preloaded amount has been used.
Non-reloadable card- There are such cards where once you spend the available money in the card, reloading cannot be done. You can only make purchases up to the available money in the card.
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No credit check: You do not need to go through a credit check to purchase a prepaid credit card because you are not borrowing money. This makes them an excellent option for customers with no credit history or poor credit scores.
No interest charges: Since you are not borrowing money, you won't be charged interest on your purchases, making prepaid credit cards a good option for those who want to avoid debt.
Easy to obtain: Prepaid cards are easy to obtain since they do not require a credit check. You can apply for one online or through the bank, and it usually takes a few days to get the card.
Reloadable: Prepaid credit cards are reloadable, which means you can add money to them as needed. This feature is especially useful for those who want to manage their spending or for parents who want to give their children an allowance.
Accepted globally: A prepaid credit card is accepted like regular credit cards. This makes it an excellent option for those who travel frequently.
No overdraft fees: Because you can spend only money that has been loaded onto the prepaid card, you won't be charged any overdraft fees.
Can help build credit: Some prepaid credit cards in India offer a feature that reports to credit bureaus your payment history. This means that by responsible use of this card, you can also build a credit history.
Offers and rewards: Some prepaid cards in India come with offers and rewards, such as cashback on purchases or discounts at select merchants.
Because you may only spend the money you have placed on the card, prepaid credit card benefits are a fantastic method to manage your finances. This tool might help you prevent overpaying and budget your money. Consider acquiring a prepaid credit card from India if you want a quick and secure way to handle your funds.
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1: As a rupee denominated prepaid card, the Axis Bank Smart Pay Card can be used by employers to disburse employee salaries, reimbursements and cash to their employees. This card ensures that payouts happen immediately and on secure platforms.
2: The Axis Bank Smart Pay Card is a reloadable card, and funds can be added by the employer. Customers can pick up an Axis Bank Smart Pay Card at any Axis Bank branch.
3: Issued in collaboration with Visa, this prepaid card can be used at any merchant outlet to ATM to withdraw cash. The Axis Bank Smart Pay Card can also be used for online shopping and other transactions using the Verified by Visa (VBV) platform.
4: Applicants need not hold a bank account or maintain any balance to procure an Axis Bank Smart Pay Card.
5: Customers can loan any amount between Rs. 500 to Rs. 50,000 for one day, with the daily cash withdrawal limit at Axis Bank ATMs being Rs. 20,000 and the daily limit for PoS transactions being Rs. 50,000.
6: The Axis Bank Smart Pay Card comes with zero lost card liability insurance against fraudulent transactions.
1: HDFC Bank offers multiple types of prepaid credit cards depending on the requirements of the applicant.
2: The various cards offered by HDFC Bank are: Multicurrency Platinum ForexPlus Chip Card, ISIC Student ID ForexPlus Chip Card, ForexPlus Card, ForexPlus Chip Card, ForexPlus Platinum Card, GiftPlus Card, FoodPlus Card, MoneyPlus Card, Hajj Umrah Card and Apollo Medical Benefit Card.
As one of the best prepaid card available, the features of the HDFC Bank ForexPlus card have been explained below.
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1: The HDFC Bank ForexPlus card can availed as a Visa card or as a MasterCard variant and is best suited for international travellers.
2: This card can be topped up while the card holder travels. Working as a credit card, the money is taken from the balance available in the HDFC Bank ForexPlus card and is accepted at all MasterCard and Visa merchant outlets.
3: The HDFC Bank ForexPlus card can be loaded in various currencies, namely Australian Dollar, Japanese Yen, AED (Dirhams), Canadian Dollar, Singapore Dollar, Swiss Franc, Euro, Sterling Pound, US Dollar and Swedish Krona.
4: Customers can use the HDFC Bank ForexPlus card to withdraw cash, make PoS and online transactions on completely secure platforms.
5: Card holders can reload this card at HDFC Bank branches, through NetBanking or Phone Banking, even when they are traveling.
6: Card replacement will be done by HDFC Bank at the request of the customer.
7: Card holders can also get insurance covers for death or Personal Accident, loss of checked-in baggage, Passport reconstruction and protection against fraudulent transactions done when the card is lost or stolen.
8: NetBanking can be used by cardholders to track their card balance, spend and other details.
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State Bank of India offers multiple types of prepaid credit cards depending on the requirements of the applicant. Customers taking the SBI prepaid card need not have a bank account and can be used for e-commerce transactions and cash withdrawals. The various cards offered by State Bank of India are:
1: State Bank Smart Payout Card
2: State Bank Xpress Money Card
3: State Bank Achiever Card
4: The State Bank Smart Payout Card, offered in collaboration with Visa, can be used to make salary or commission payments.
5: Cardholders can use the card to make cash withdrawals, purchase transactions and for online payments.
6: The State Bank Smart Payout Card is issued in Indian Rupees and is valid for a period of 10 years.
7: The minimum amount that can be loaded is Rs. 100 to up to Rs. 10,000.
8: The State Bank Xpress Money Card can be used to make inward remittances from countries worldwide. This service is provided through the Reserve Bank of India's Money Transfer Service
9: Scheme (MTSS) via UAE Exchange and Financial Services Ltd.
10: State Bank Xpress Money Card is a prepaid card used by which customers can make cash withdrawals, PoS and e-commerce payments.
11: Corporates can use the State Bank Achiever Card to make incentive payments to their employees. The card can be loaded multiple times up to a limit of Rs. 1 lakh, and customers can make PoS and online transactions using it.
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YES Bank offers various prepaid cards for various purposes, including travel, gifting and corporate employers. The various cards offered by YES Bank are:
1: Multicurrency Travel Card
2: Gift Card, Jewellery Gift Card
3: Corporate Gift Card
4: Payroll Card
5: Incredible India Domestic Travel Card
6: The Yes Bank Multi Currency Travel Card can be used in US dollars, Euros, Pound Sterling, SG dollars, Australian dollars, AED, Japanese Yen, Canadian dollars, Hong Kong dollars or CHF and can be reloaded at Yes Bank branches.
7: The Incredible India Prepaid Travel Card can be used to make travel and flight bookings, fuel transactions, utility bill payments, shopping, mobile recharges, and more.
8: Customers can also purchase different gift cards from Yes Bank for corporate gifts, jewellery purchases, and other purposes.
9: Yes, Bank gift cards can be loaded for up to Rs. 50,000 and used at any MasterCard merchant outlet.
10: Yes Bank also offers Payroll cards for corporate employers, which are valid for five years.
11: Companies can disburse cash to their employees instead of cheques or cash through the card.
12: Cardholders can make cash withdrawals up to Rs. 10,000 and PoS transactions up to Rs. 20,000
1: Bank of Baroda offers two prepaid cards: the Baroda and the Baroda TravelEasy Card.
2: The Baroda Gift Card can be used at various merchant outlets and comes with a validity of one year.
3: Purchases can be made across India in Rupees and can also be used for online transactions.
4: The Baroda Gift Card uses the Verified by Visa platform for e-commerce transactions.
5: The card cannot be used for making ATM withdrawals.
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Prepaid cards can be bought at retail locations (such as grocery stores and drug stores), online, over the phone, or from some banks.
A prepaid card may have several fees, including a fee to purchase the card and activate the account. Other fees can include monthly, reload, ATM withdrawal, and foreign transaction fees.
Yes, some banks allow you to take cash out of the prepaid card. However, you may be levied a cash withdrawal fee for the same.
Yes, you can use a prepaid credit card to make a hotel reservation. However, you will need an available balance above and beyond the room & tax charges.
With a prepaid card, you aren’t borrowing any money. Prepaid credit cards don’t have a credit line attached to them, and they aren’t reported to the credit reporting agencies, so they won’t help in improving your credit scores.
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