A prepaid card is a payment card that allows you to load money to use for various kinds of transactions. You can permanently close your prepaid card account if you don’t need it anymore. You need to know how to get all your money off a prepaid card before closing an account. If you do not use all the money on your card before shutting down your account, you will lose all the available balance.
Various reasons may force you to close your prepaid card account. One of them is when you are not able to withstand new terms and conditions from your card issuer. Companies usually develop new operating guidelines and require consumers to accept them to continue benefiting from their services. If you disagree with the new terms, the only option is to opt out of the company’s services.
You may also close your prepaid card if you get another company offering better services. There is no way you can have a card charging, for example, $10 monthly fees, while another company somewhere is having zero fees when other factors are constant. Furthermore, I better go for a card with benefits such as cashback rewards and points when purchasing goods from select places.
How is a prepaid card different from a credit card?
A prepaid card is a bit different from a credit card in that you must have money in your card account for you to transact with the card, while a credit card allows you to borrow from your card issuer up to a specific limit. Different credit card users have varying limits depending on the creditworthiness of an individual.
Additionally, prepaid cards do not require you to have some credit history to get the card. Credit cards need you to have a credit history. If you have never had a credit card or a loan before, you will have to get a secured credit card.
Despite being different in the above ways, both prepaid debit cards and credit cards are helpful for the payment of goods and services. The cards also allow you to purchase goods online, send money, and also pay bills. The core purpose is the same despite the difference in their operation.
How do I get a prepaid card?
If you want to get the best prepaid debit card, first of all, you have to research online on the available prepaid cards and identify the best card for you. Most prepaid card companies issue their cards online, and thus you can get all the needed information online for various cards.
Generally, all card issuers require you to be over 18 years old. You also need to have the following.
- Social Security Number
- Government ID (Passport, Driver’s Licence, or National ID)
- Physical Address
- Email address
- Phone number
Once you ensure that you have all the above, you can visit the card issuer’s website and apply online. You should enter all the details accurately. Upload the necessary documents as instructed and hit submit when done. You should then wait for the card issuer to send you your prepaid card to your provided physical address. Upon receiving the card, you should activate it immediately online or by calling customer care.
How to get all your money off a prepaid card
If you want to clear all funds from your account, then there are various ways you can do so. They include the following.
1) Withdraw money over the counter
Almost all prepaid card issuers allow you to get money out of your card account over the counter. You can visit any bank that accepts your card and withdraw money. At the bank, I can withdraw money with my account number, my ID, and my signature or Touch ID.
Some select non-bank centers allow you to recharge and withdraw money and thus you can get all your cash off your prepaid debit card from such places as well.
2) Spend on goods and services
If you are planning to clear all your money from your prepaid card account, you can decide to use all the money to buy goods and services. You can either buy online or at physical stores.
Purchasing online using your card is easy since you only need to enter a few details during checkout. You only need to enter the card number, the card expiry date, and the CVV. You must calculate the cost to make sure that you spend all money to purchase the items or services.
You can swipe your card over a card reader at physical stores or use contactless methods to pay for goods and services. Here, you can pick goods worth your card balance while taking into your account any transaction fees.
3) Withdraw from an ATM
Prepaid cards allow you to withdraw money from an ATM. Most prepaid card issuers have ATMs that do not charge withdrawal fees and you can take advantage of that to get all your money out of your card account. Even though most financial institutions have daily withdrawal limits, you can withdraw in bits every day until you clear everything in your account.
4) Send money to someone else
Another option to empty your card account is to transfer money to someone else’s bank account, mobile wallet, or payment card. The recipient may be your friend or relative. Sending money to someone else may attract some fees and thus you must put into account the transaction fees. Furthermore, you need to understand the transfer limits and plan on how to transfer your money to the last coin.
How do I know my prepaid card’s balance?
There are three main ways you can know your real-time card balance. The first option is logging online in your card account, and then checking how much you have in your account. Most prepaid card issuers allow you to open an account online where you can manage your account using your smartphone, tablet, or computer. Apart from viewing your card account balance online, you can also buy goods and services and send money to others.
Secondly, you can check your card balance at an ATM point. After inserting your card and entering your PIN, you can navigate to the ‘Check Balance’ option and see the available amount of money in your card account. It is always good to know the available balance before making any kind of transaction. Even though some service providers offer overdrafts, never get used to overdrafts since they put you on recurrent debts.
Another way to know your balance is by calling your customer care. You need to give them your account number and maybe your ID number. However, you should never share your card’s PIN or your online login credentials with anyone, including the customer care representative. Apart from calling customer care, you can also chat with them over their official social media pages such as Facebook, Twitter, and their website chat feature.
When should I get all my money off a prepaid card?
There are various reasons why you should clear your balance from a given prepaid card. Some of these reasons include the following.
1) If the card issuer introduces new charges on the card
It may reach a point where a prepaid card issuer brings in some other charges to make more money. Some service providers may lure you with features such as zero monthly fees, zero withdrawal charges, and so on only to introduce them later. At such a point, you may decide to get all your money from the card account and close it.
2) When you see signs of the company collapsing
You have always heard of companies making losses now and then. If you see a company making losses year after year, those are clear signs that the company will collapse. If your card issuer seems to make losses every now and then, then you have enough reasons to withdraw all your money from your card account before the worst happens.
Even though there is a guarantee that you will always get your money back since the card-issuing banks have FDIC insurance, no one would like to follow the lengthy procedure of recovering their money.
3) When you get a new card issuer with better terms
When it comes to financial matters, there is no friendship. I am sure you will immediately switch to a new card issuer if you notice that they have fewer charges and more benefits than the current service provider. You can even transfer money from the card account to the new card if applicable. You may even send money with a checking account number instantly if your new card links to a checking account.
Does withdrawing all money from a prepaid card affect my credit scores?
A Prepaid card does not alter your credit scores in any way. Lines of credits and loans affect your credit scores as well as your credit report. However, that doesn’t mean that you can misbehave with a prepaid card account since you may find it challenging to open an account with any financial company later in life.
Banks and other financial institutions forward your details to ChexSystems if you misuse your accounts by carrying out fraudulent transactions, closing your account with negative balances, failure to abide by the terms and conditions, among other things.
Bottom line
A prepaid card allows you to buy goods and services online or at physical stores. Prepaid cards do not alter your credit scores. However, misuse of the cards may lead you to the ChexSystems. There are various ways you can use it to get money off your prepaid card. You can withdraw all your money from your card account and permanently close the account if you no longer need it.
